Bank fraud case: CBI searches at Jet office, Naresh Goyal's residence

Searches conducted with an alleged Rs 538-cr 'fraud' case in Canara Bank

The Central Bureau Of Investigation (CBI) on Friday conducted searches at seven locations including the premises of Jet Airways and its founder Naresh Goyal in Mumbai in connection with an alleged Rs 538-crore ‘fraud’ case in Canara Bank, officials said.

The CBI searches were spread across residences and offices of Goyal, his wife Anita, and former airline director Gaurang Ananda Shetty.

The agency has registered a new case of alleged bank fraud of Rs 538 crore on a complaint from Canara Bank, they said. The allegations pertain to alleged diversion of funds among other irregularities, they said.

“Searches have been conducted in seven locations in Mumbai. This is in connection to the investigation into the bank fraud case,” a source in the CBI said.

 

According to the FIR registered Wednesday, the complaint was filed by P. Santosh, Chief General Manager, Canara Bank, accusing Goyal and the others of alleged cheating, criminal conspiracy, criminal breach of trust and criminal misconduct leading to an alleged loss of Rs 538.62 crore to Canara bank.

The CBI, in its FIR, accused the airline and the others of siphoning funds and diversion which were allegedly revealed during a forensic audit.

According to the investigating agency, between 1 April, 2011, and 30 June, 2019, the airline was found to have spent Rs 11,152.62 crore on professional and consultancy expenses. “Out of these expenses, suspicious transactions to the tune of Rs 197.57 crore were identified,” the FIR reads.

SKIDDING OFF THE RUNWAY

• Goyal, his wife, former Jet director Gaurang Ananda Shetty and others are among those named as accused in the case
• Searches were conducted at seven locations in Mumbai
• The agency has registered a new case of alleged bank fraud on a complaint from Canara Bank
• Canara Bank alleged that funds were diverted for purposes unrelated to the airline's operations
• The CBI accused the airline and the others of siphoning funds and diversion which were allegedly revealed during a forensic audit
• The company was in the process of revival after Jalan-Kalrock consortium won the bid for Jet Airways

The transactions were allegedly linked to entities that had associations with managerial personnel of Jet Airways.

The agency has accused the airline and the others of “misappropriation and siphoning of funds” taken from banks to utilise for purposes unrelated to the operations of the borrower, and to the “detriment of the financial health of the entity and the lender”. 

The company was in the process of revival after Jalan Kalrock Consortium won the bid for Jet Airways under the insolvency resolution process at National Company Law Tribunal (NCLT).

In fact, JKC had planned to have six planes by December 2022 and double the number over the next six months.

Revival, however, will not be easy even if the consortium quickly secures control of the grounded airline, feel industry experts. This is due to changed market conditions and consolidation in the domestic market.

Getting desired airport slots and the right manpower will be a challenge for Jet now, he added. 

The consortium had signed letters of intent with lessors for a few such Airbus planes built for Russian airlines, but with its own launch delayed the planes have been snapped up by others.
 

Jet Airways, once India's largest private carrier, suspended operations in April 2019 because of a severe cash crunch and mounting debt. Last November, the consortium was forced to put employees on leave without pay. Many of them have now quit due to question marks over revival.