The Enforcement Directorate (ED) in Mumbai is questioning Naresh Goyal, founder of Jet Airways (India) Ltd in connection with a case of alleged contravention of the foreign exchange law, according to officials familiar with the development. This is the first time the agency has called Goyal for questioning.
According to ED sources, Goyal has 19 privately held companies out of which 14 are in India and 5 abroad. ED has alleged that Jet Airways has executed aircraft lease agreements with offshore entities that have made payments to firms which have allegedly “diverted” the money to Goyal. Sources said the ED is examining transactions of the airlines pertaining to sales and distribution.
Earlier in May, began probing Etihad Airways investment in Jet Airways’ frequent flyer programme –Jet Privilege Pvt Ltd (JPPL). The agency is ascertaining whether foreign direct investment (FDI) norms were violated by Etihad that took a stake in JPPL in 2014.JPPL was incorporated as a wholly-owned unit of the airline in 2012 and was split as an independent entity in 2014 after Etihad’s purchase of 50.1% stake for $150 million. Jet Airways holds 49.9% stake.
The agency has also questioned a few top officials of Jet Airways in connection with its FEMA case.
Last month, the ED searched Goyal’s residence and 11 other locations in Mumbai and Delhi. The agency also searched Hasmukh Deepchand Gardi, a partner of Goyal’s Isle of Man-firm Tail Winds Corporation. Tail Winds, the ED said controls all the financial activities of Jet Airways.
Gardi, who lives in Dubai has also been named in The Panama Papers, according to the probe agency.
In March, Goyal stepped down as chairman of the airline. In April, Jet Airways, shuttered operations due to cash crunch. Since then the airline has come under the scanner of multiple investigative agencies including the Serious Fraud Investigation Office (SFIO), Income Tax department. The SFIO has also questioned Goyal a couple of times in connection with its case.
A Ministry of Corporate Affairs (MCA) inspection report had allegedly found large-scale irregularities, including diversion of funds, at the airline. The Income Tax department also searched the carrier’s offices and found discrepancies in their books.
Currently, Jet Airways is undergoing resolution process under the Insolvency and Bankruptcy Code.