The Enforcement Directorate (ED), which on Friday conducted extensive search operations at Naresh Goyal’s business and residential premises in 12 locations, has alleged that Tail Winds, incorporated by him in Isle of Man, was controlling the financial activities of Jet Airways.
Goyal will be called for questioning next week, an ED official said. According to the probe findings, Hasmukh Deepchand Gardi, who was named in the Panama Paper global leaks for allegedly holding fraudulent companies and was also Goyal’s partner, made investments in Tail Winds. Gardi’s premises were also searched on Friday. His investments in Goyal’s firm have come from illegal activities, according to the official.
The probe agency has also alleged that Goyal’s companies executed several “colourable transactions” under the guise of selling and distribution expenses.
“Commission and other fictitious expenses were booked at unrealistically high prices and therefore they were projecting huge losses,” the ED official pointed out. Jet Airways had executed shady aircraft lease transaction with ghost entities located abroad, made payment towards lease rental and in exchange, diverted the monies to the personal fiefdom of Goyal, the ED alleged.
A view of Jupiter building, residence of Jet founder Naresh Goyal, during searches by the ED, in Mumbai on Friday Photo: PTIThe action is part of the probe against Jet under the Foreign Exchange Management Act (Fema).
Jet and its promoter Goyal have been under the enforcement agency lens for alleged violation of foreign exchange regulations during the signing of a $150-million deal with strategic partner Etihad Airways in 2014 for a loyalty programme business.
In 2014, Etihad had picked up a 50.1 per cent stake in Jet’s frequent flyer programme, Jet Privilege, with the balance going to Jet.
Meanwhile, Goyal’s plea seeking withdrawal of his challenge to a Look-out Circular (LOC) has been allowed by the Delhi High Court.
The government counsel on Friday told the Delhi HC that Goyal was not cooperating in the ongoing Serious Fraud Investigation Office (SFIO) investigation in the case of alleged fraud of Rs 18,000 crore. This submission by the central government’s lawyer came on Goyal’s plea seeking to withdraw his challenge to the LOC issued against him.
In the fresh plea moved before the high court, Goyal has said that since the probe by SFIO in the alleged fraud had begun, he had extended all possible cooperation to the agency, and thus was not pressing for permission to travel abroad. Goyal also said he should be given liberty to avail of the appropriate remedies in future.
A single-judge Bench of Justice Navin Chawla, without expressing any comments on the merits of the case, allowed Goyal to withdraw his plea.
Goyal had in July challenged the LOC.
The Registrar of Companies, under the Ministry of Corporate Affairs (MCA), has flagged certain discrepancies in the books and instances of violation of the Companies Act. Based on the findings, Serious Fraud Investigation Office (SFIO) had initiated a probe in the matter and questioned Goyal several times.