New Delhi Jet Airways founder Naresh Goyal siphoned off carrier’s money to family members, including his daughter’s production company, and to tax havens “without any rationale” and for “personal enrichment and gains”, the Enforcement Directorate (ED) claimed a day after arresting him.
ED’s money laundering probe is based on a Central Bureau of Investigation (CBI) first information report filed in May pertaining to a ₹538 crore fraud with the state-run Canara Bank, which was among the lenders to the airline. The total non-performing assets, or outstanding debt, of the Jet Airways group comes to around ₹5,951 crore.
“It was revealed during the course of investigation that proceeds of crime were diverted and siphoned off in the garb of professional consultancy expenses which were paid to various persons and entities. As per the forensic audit report by Ernst & Young, Jet Airways (India) Ltd or JIL has paid an amount of ₹1,152 crore in the form of professional and consultancy expenses from FY 2011-12 to FY-2017-18,” the federal agency said while producing Goyal before a court in Mumbai on Saturday.
The special PMLA court remanded Goyal in the ED custody till September 11
“ED investigation revealed that in the garb of professional services and consultancy, dubious expenses to the tune of ₹1,000 crore were booked, personal expenses of Naresh Goyal and his family members were booked in the company, and unaccounted transactions have been credited to the foreign accounts of the promoters,” the agency that investigates financial crimes said in a statement.
“Jet Airways (India) Limited has also diverted funds to overseas entities based in Dubai, Ireland and other tax haven countries including British Virgin Islands in the garb of General Selling Agents commission, which was paid to related parties and the entities connected to Naresh Goyal and his associates,” the directorate said.
Citing an EY audit, ED has said ₹9.46 crore were paid to family members of Goyal, which included wife Anita, daughter Namrata, and son Nivaan from the accounts of Jet Airways for the period 2011-12 to 2018-19 for various purposes. The transactions had “no rationale and these transactions have been done with ulterior motive of diverting the amount from the company for personal gains and enrichment”, the agency claimed.
Citing a statement by Vinay Garodia, audit partner at EY, the directorate said in court that “certain emails were identified based on which it appears that salary and operational expenses of M/s Filmstoc Pvt Ltd, a production house incorporated by Namrata Goyal, were potentially borne by JIL”.
“Certain additional emails were also identified which indicated that salary expenses of residential staff of Naresh Goyal at Mumbai and Delhi were potentially borne by JIL,” ED added. Besides, payments were made by HD Gardi, a businessmen allegedly associated with Goyal, for certain movable assets purchased for Naresh Goyal and his wife in the form of furniture accessories, apparel and jewellery, the agency said.
ED also claimed that Goyal diverted the funds by making advances to the Jet Lite Limited, a unit of Jet airways, worth ₹2,547 crore, and subsequently writing off the amount by making an accounting provision.
Jet Airways has made payments worth ₹403 crore, which is not in tune with the GSA (general selling agents) agreement, as the expenses of GSAs were to be borne by GSAs and not by Jet airways, the ED said. “Further, agreements were made with several GSAs where relatives of Naresh Goyal and Anita Goyal were directors. Out of over ₹3,000 crore paid as GSA expenses, the substantial portion was made to related party – Jet Air LLC, Jet Air UK Limited, Jetair Pvt Ltd, and Jetair Inc,” it said.
On diversion of funds abroad, ED has alleged that “Goyal had also siphoned off proceeds of crime to the various companies and trusts created by him which are in tax haven countries including Jersey and BVI (British Virgin Islands). He has also acquired various properties in overseas countries including Dubai and the UK”.
Goyal kept misleading investigators, ED said, adding that his interrogation was necessary to unearth the larger conspiracy behind the fraud and siphoning of proceeds of crime, and to identify and quantify the money trail.
Calling him a “very influential, intelligent and resourceful person”, ED said the crime was committed by Goyal with full pre-meditation to ensure that the offence will be undetected, and even if it was detected, the investigative agency cannot trace the evidence. His custody is required for the purpose of identifying the proceeds of crime, the agency said.
