Daijiworld Media Network – New Delhi

New Delhi, Sep 5: Jet Airways founder Naresh Goyal has told a court that the airline’s financial crisis in 2019 was caused by adverse macroeconomic and industry conditions and not by any fraudulent conduct on his part.

Goyal made the submission in his discharge plea in a money laundering case being investigated by the Enforcement Directorate (ED). The agency has opposed the plea, alleging that Goyal orchestrated a systemic fraud involving Jet Airways and public sector banks.

Goyal, 77, was arrested by the ED in September 2023 over allegations that loans extended to Jet Airways by Canara Bank were siphoned off, involving an amount of Rs 538.62 crore. He is currently out on medical bail.

In his plea, Goyal attributed Jet Airways’ financial difficulties to factors including rising aviation fuel prices, foreign exchange volatility and intense competition. The airline eventually suspended operations in April 2019 after it was unable to meet its mounting financial obligations.

He maintained that the airline’s collapse was the result of difficult commercial and industry conditions and not money laundering or fraudulent activity.

Goyal also denied allegations that funds were diverted through General Sales Agents (GSAs), stating that such arrangements were a standard industry practice for ticket sales and expanding market operations. He said payments involving GSAs were approved by the airline’s board and disclosed in its financial statements.

On the alleged diversion of the Rs 538.62 crore Canara Bank loan, Goyal argued that the amount represented the bank’s total outstanding claim and not money directly disbursed to him. He said Rs 365.57 crore comprised letters of credit and bank guarantees issued directly to vendors for aircraft leasing and fuel expenses.

The ED, however, told the court that it had established a prima facie case through documentary and testimonial evidence and alleged that Goyal siphoned off funds from the airline and enriched himself and his family through a global money-laundering network.

The agency has urged the court to reject Goyal’s discharge plea and proceed with framing of charges, which would pave the way for the trial.

The case stems from an FIR registered by the Central Bureau of Investigation against Jet Airways, Goyal, his wife Anita Goyal and several former executives over alleged bank fraud.

The matter will next be heard on September 9.