The Enforcement Directorate (ED), which is investigating money laundering charges against Jet Airways founder Naresh Goyal, filed a chargesheet against him on Tuesday in the Rs 538 crore Canara Bank fraud case.
India Today exclusively accessed the chargesheet filed against Goyal and found that he allegedly misappropriated public funds obtained as business loans for various purposes, including commission to sales agents, personal and family expenses, loans to subsidiary companies with no business or income, and professional and consultancy charges paid to his wife, daughter, and son.
According to the chargesheet, the ED’s investigation, based on company documents and statements from witnesses and accused individuals, revealed that Goyal and others involved used four major pretexts to siphon off funds from Jet Airways (India) Limited (JIL):
- Commission expenses
- Diversion of funds from JIL for personal expenses
- Granting loans to Jet Lite Limited and subsequently misappropriating the funds
- Professional and consultancy Charges
Jet Airways director’s ‘wasteful expenditure’
Despite JIL facing severe financial difficulties, the ED chargesheet said that the director and chairman of JIL continued to engage in wasteful expenditures by paying substantial amounts to professionals and consultants, ignoring advice from professionals within the company.
Further, the company incurred expenses for various General Sales Agents (GSAs) in India and abroad, some of which provided no contribution to JIL’s revenue. The funds siphoned off using these methods were used by Naresh Goyal and his family for their personal expenses, according to the chargesheet.
Money laundering through GSA
The chargesheet revealed that the ED’s investigation under PMLA established that Jetair Private Limited (JAPL), one of JIL’s General Sales Agents (GSA), had no work after JIL joined the Billing and Settlement Plan (BSP) under the International Air Transport Association (IATA) in 2008.
With the introduction of the BSP system, the concept of a domestic airline having a GSA in its home country became irrelevant. Except for JIL, no other airline deployed a GSA in India, except for IndiGo, which also discontinued the concept as the airline matured.
Despite the GSA’s lack of involvement in the passenger segment, commission payouts to JAPL were neither reduced nor discontinued.
The chargesheet also revealed that JIL siphoned off public money by giving commissions to various GSAs. This included passenger commission and cargo commission paid to numerous GSAs in India and abroad, including related entities. Notably, JIL had around 100 GSAs worldwide, and it appointed a Global GSA in Dubai named Jetair LLC.
The chargesheet highlighted that JAPL received Rs 282 crore in GSA commission from JIL between FY 2011-12 and FY 2018-19, which is considered Proceeds of Crime (PoC) and subject to recovery.
The chargesheet further pointed out that Jet Airways LLC Dubai, appointed by JIL, had no relevant role but received commission payments totaling Rs 415.92 crore from JIL between FY 11-12 and 18-19. This amount is also considered a diversion of loans and part of the Proceeds of Crime, liable for attachment from Jetair Pvt Ltd and Jetairways LLC Dubai, including its beneficial owner, Naresh Goyal.
The chargesheet described the agreements between JAPL and JIL as bogus, intended to siphon off funds financed by loans from a consortium of banks, led by SBI and PNB. These funds were used for the personal benefit of Naresh Goyal’s family members.
Bogus GSA commission to launder money
The investigation also highlighted Hasmukh Gardi (HD Gardi), a close associate and co-founder of JIL. Gardi, an NRI and close friend of Goyal, was involved in various financial transactions related to the airline. The chargesheet provided insights into Gardi’s connections and financial dealings, including his involvement with Tail Winds Corporation, the parent company of Jet Airways (India) Ltd.
He also became director of Jet Airways later and held the position for a long time. In 2019, an investigation carried out by the ED in another fraud case led to the suspicion that some elements from the underworld were also part of the initial funding for the airline.
Gardi reportedly owned thirty shell companies and his house was raided by the probe agency in 2019.
Funds to Goyal’s family members
The chargesheet detailed how funds were transferred to the Goyal family through JAPL’s agency commission and Over Riding Commission (ORC). It further exposed substantial consultancy payments made to Goyal’s wife, son, and daughter without clear evidence of services provided. These payments amounted to INR 9.46 crore over several years.
Naresh Goyal’s wife, Anita Goyal, was appointed as a consultant to the CEO of Jetair Pvt Ltd in 2015 for a yearly contract of Rs 1.15 crores. In March 2016, her contract was renewed with a sharp increment in her consultancy fee with an increase of Rs 20 lakh per month.
Similarly, Naresh Goyal’s son Nivaan Goyal was appointed as a consultant to Jetair in June 2017, with a monthly remuneration of Rs 7.5 lakh. The contract was subsequently renewed for an additional year, with a monthly remuneration of Rs 20 lakh. Jetair did not provide any documentary evidence to support what consultancy services were offered by Nivaan Goyal.
The chargesheet concluded that the accused individuals have committed money laundering offenses and should be prosecuted and punished accordingly. The attached, seized, or frozen properties involved in money laundering are liable to be confiscated as per the provisions of the Prevention of Money Laundering Act, 2002.
