According to the FIR, Jet Airways' parent company, JIL, allegedly paid for personal expenses, including salaries of staff, phone bills, and vehicle expenses, of the Goyal family.
On Friday night, Naresh Goyal, the founder of Jet Airways, was arrested by the Enforcement Directorate (ED) in connection with a money laundering case worth Rs 538 crore. The case is linked to loans and credit lines provided to the airline by Canara Bank.
Why was he arrested?
Due to a significant shortage of funds and an increasing amount of debt, Jet Airways, which was previously India's biggest private airline, suspended operations in April 2019.
The alleged Rs 538 crore fraud case at Canara Bank has led to a money laundering investigation involving Jet Airways, its founder Naresh Goyal, his wife Anita, and several former company executives.
The CBI conducted a raid on May 5 at the locations where the Jet Airways founder used to work and at the old airline offices in connection with the Canara Bank Fraud.
Additionally, in July, the ED searched eight places that were linked to Goyal and his associates.
The bank filed an FIR stating that Canara Bank provided credit limits and loans worth Rs 848.86 crore to Jet Airways (India) Ltd (JIL), out of which Rs 538.62 crore is still unpaid.
The investigation was initiated by the Central Bureau of Investigation (CBI) based on an FIR.
"CGM of Canara Bank, Recovery & Legal Section in Mumbai, has submitted regarding alleged offences of cheating, criminal conspiracy, criminal breach of trust and criminal misconduct committed by M/s Jet Airways (India) Ltd., Naresh Jagdishrai Goyal, Anita Naresh Goyal, Gaurang Ananda Shetty and unknown public servants and others causing wrongful loss of Rs 538.62 crore to Canara Bank", the FIR read.
According to reports, the account in question was declared as 'fraud' by the CBI on July 29.
"As per sample Agreement of Jet Airways (India) Ltd (JIL), it was noted that the expenses of General Selling Agents (GSA) was to be borne by GSA itself and not by JIL. However, it was observed that JIL has paid various expenses amounting to Rs 403.27 crore which is not in tune with the GSA," the complaint now part of the CBI FIR alleged.
The inquiry discovered that Jet Airways disbursed Rs 420.43 crore out of the total Rs 1,152.62 crore for professional and consultancy expenses to entities whose business nature did not correspond to the service descriptions mentioned on their invoices.
According to the FIR, Jet Airways parent company, JIL, allegedly paid for personal expenses, including salaries of staff, phone bills, and vehicle expenses, of the Goyal family.
What's next in the case?
In June 2021, a prolonged insolvency process resulted in the acquisition of the airline by a partnership between Murari Lal Jalan, a businessman based in the UAE, and Kalrock Capital, based in London.
According to the reports, Jalan Kalrock Consortium (JCK) made an announcement that they have put Rs 100 crore into Jet Airways to help revive the airline, as per the National Company Law Appellate Tribunal's (NCLAT) plan.
The company stated that they have invested Rs 250 crore into Jet Airways and are only required to provide the remaining Rs 100 crore by September 30, 2023, to take control of the airline.
A three-member NCLAT bench approved the JCK's request to extend the timeline and adjust Rs 150 crore from the performance bank guarantee to clear payment of Rs 350 crore.
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