New Delhi | The 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 across Mumbai also covered the residences and offices of Goyal's wife Anita, and former airline director Gaurang Ananda Shetty.
The agency has registered a new case against Goyal, Anita, Shetty and Jet Airways (India) Ltd (JIL) on a complaint by Canara Bank which alleged a fraud of Rs 538 crore , the officials said, adding the allegations pertain to alleged diversion of funds among other irregularities.
The agency initiated the action on the bank's complaint which alleged that it sanctioned credit limits and loans to Jet Airways (India) Ltd (JIL) to the tune of Rs 848.86 crore of which Rs 538.62 crore is outstanding.
It said the account was declared "fraud" on July 29, 2021.
The bank alleged that the forensic audit of JIL showed that it paid "related companies" Rs 1,410.41 crore out of a total commission expenses, thus siphoning off funds from JIL.
"As per sample Agreement of Jet Airways (India) Ltd (JlL), it was noted that the expenses of General Selling Agents (GSA) was to be borne by GSA itself and nor 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 FIR alleged.
It said personal expenses such as salaries of staff, phone bills and vehicle expenses among others of Goyal family were paid paid by JIL.
Among other allegations, it surfaced during the forensic audit that funds were also siphoned off through Jet Lite (India) Ltd ( JLL) by way of making advance and investing and subsequently writing off of the same by making provision.
The JIL diverted the funds for the subsidiary JLL in the form of loans and advances and investments extended.
"It is observed that during 2011-18, Rs. 14,552.44 crores was given as loan to JLL and in return Rs 13529.62 crores was received from JLL. Provision was created for the loans given to JLL for year on year basis where the closing balance of loan amount was Rs 1282.39 crore in FY 2011-12 and by FY 2019-20 it was Rs. 2547.83 crores which includes the principal amount along with interest charged by JIL to JLL," the complaint alleged.
It said no funds have been received by JIL from JLL post provision being made in their financials for the FY 2017-18 for loans and advances amounting to Rs. 2547.83 crores granted to JLL.
"The provisions were made by JIL mainly due to continued losses by JLL and JLL's inability to turnaround with its business operation," it alleged.
The stated reason in the agreement with JLL for extending the loan was to run day to day operations of JLL smoothly without mentioning any specific purpose, it alleged.
"This transaction delineates that the JIL was transferring borrowed funds to subsidiary/Group companies by whatever modalities and not utilizing funds for the intended purpose," the bank has alleged.
It alleged that the company also siphoned off funds through payments made to professional and consultancy expenses.
The bank cited these transactions to allege that they were made "towards cheating and misappropriation ol funds" by the borrower by "misappropriation and siphoning off funds" borrowed from banks "being utilized for purposes unrelated to the operations of borrower, to the detriment of the financial health of the entity and/or the lender".
The airline 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).