'Jet Airways collapse was caused by market conditions, not fraud', Naresh Goyal tells court

Jet Airways founder Naresh Goyal on Friday told a court that the airline’s financial collapse in 2019 resulted from adverse macroeconomic and industry conditions and not from any fraudulent conduct on his part, as he sought discharge from a money laundering case being investigated by the Enforcement Directorate (ED).

The 77-year-old businessman, currently on medical bail, said Jet Airways (India) Limited faced severe financial pressure because of factors beyond its control, including rising aviation fuel prices, foreign exchange volatility and intense competition. The airline eventually suspended operations in April 2019 after it became unable to meet its mounting financial obligations.

Goyal denies fund diversion

Goyal argued that Jet Airways’ financial distress was the result of commercial and industry conditions and could not be treated as evidence of money laundering. He also denied the ED’s allegation that funds had been siphoned through General Sales Agents, maintaining that the use of such agents for ticket sales and market expansion was standard industry practice and that payments were approved by the company’s board and disclosed in its financial statements.

The businessman also disputed allegations concerning the diversion of a Rs 538.62 crore loan from Canara Bank. His plea said the figure represented the bank’s total outstanding claim and was not an amount disbursed directly to him. Of this, Rs 365.57 crore comprised letters of credit and bank guarantees issued directly to vendors for aircraft leasing and fuel, it said.

Goyal was arrested by the ED in September 2023. The agency’s money laundering case stems from a CBI FIR against Jet Airways, Goyal, his wife Anita and some former executives over an alleged bank fraud.

ED alleges systemic fraud

Opposing the discharge application, the ED alleged that Goyal had “orchestrated a systemic fraud” that ultimately contributed to the collapse of the airline, defrauded public sector banks and enriched himself and his family through what the agency described as a sophisticated global money laundering network.

The agency told the court that documentary and testimonial evidence had established a prima facie case and sought dismissal of Goyal’s discharge plea. It urged the court to proceed with the framing of charges, which would pave the way for the trial.

The court is scheduled to hear the matter next on September 9.