Jet Airways founder Naresh Goyal to stay in ED custody till September 11

Naresh Goyal, the founder of Jet Airways, will remain in custody of the Enforcement Directorate (ED) till September 11 in connection with an alleged loan fraud involving about Rs 538.62 crore of the Canara Bank. Goyal's lawyer reportedly requested the court to allow him to take medicines, home food and a mattress in custody, stating that he suffers from back pain and other issues. The court allowed the request.

Goyal had been requested to appear at the Enforcement Directorate's office in Mumbai to provide his statement. Subsequently, he was taken into custody after questioning.The investigation by the Enforcement Directorate stems from a case initiated by the Central Bureau of Investigation (CBI) in May. The accused individuals in this case include the company itself, Goyal, his wife Anita Naresh Goyal, and Gaurang Ananda Shetty.The allegations suggest that the company was initially granted a working capital limit of Rs 126 crore and an inland letter of credit/financial bank guarantee limit of Rs 100 crore for various purposes. Additionally, the company received Rs 400 crore as a term loan for operational expenses, along with Rs 200 crore for aircraft reconfiguration, the introduction of new routes, business promotion, and related activities. Furthermore, the company received a short-term loan of Rs 17.52 crore.

The First Information Report alleges that starting in August 2018, the company began to claim it was facing liquidity and operational challenges and was unable to meet payment obligations. In October 2018, the lenders invoked the inter-creditor agreement provisions, designating the State Bank of India as the lead lender.Jet Airways was instructed to submit a resolution plan and infuse Rs 3,500-Rs 4000 crore. However, the company failed to meet these conditions and also defaulted on installment payments as of December 31, 2018. Consequently, the banks took the matter to the National Company Law Tribunal, and in April 2019, Jet Airways suspended its operations.Canara Bank reported that its loan account became a non-performing asset on June 5, 2019. A forensic audit of the company's financial records for the period from April 1, 2011, to June 30, 2019, revealed alleged diversion and embezzlement of funds.