ED conducts raids at Jet founder Naresh Goyal’s premises

They said the searches are being carried out under the provisions of the Foreign Exchange Management Act (FEMA) and are aimed at gathering additional evidence.

The Enforcement Directorate (ED) on Friday conducted searches at about a dozen premises of Jet Airways founder Naresh Goyal and his associates in New Delhi and Mumbai in connection with alleged violations of foreign direct investment (FDI) norms, officials said.

ED’s searches followed Goyal’s questioning on Thursday by the Serious Fraud Investigation Office in Mumbai in connection with allegations of financial irregularities, they said.

Goyal had stepped down as chairman of Jet Airways in March. The full-service carrier was forced to stop operations on April 17 due to acute liquidity crunch. Currently, the airline is undergoing the resolution process under the Insolvency and Bankruptcy Code (IBC).

ED is searching Goyal’s premises to gather additional evidence under the provisions of the Foreign Exchange Management Act (FEMA). Proceedings under FEMA are civil in nature, officials said.

In a significant move, ED also searched the premises of Dubai-based non-resident Indian Hasmukh Deepchand Gardi’s son-in-law in Usha Kiran building on Carmichael Road in Mumbai. Gardi, who had invested in the now-defunct Tail Winds Limited parent company of Jet Airways that Goyal started at Isle of Man, an island tax haven in situated in the Irish sea between Ireland and England, had featured in the Panama papers with companies in India, UAE and British Virgin Islands.

Jet Airways has liabilities close to ~15,000 crore. In July, a ministry of corporate affairs (MCA) inspection report had found large-scale irregularities, including diversion of funds, at the airline.

The ED probe now focuses on alleged irregularities and inflated payments made to the Ireland-based firm which leased out aircraft to Jet Airways. The ambit of probe has increased from contraventions under FEMA to alleged violations under the Prevention of Money Laundering Act .

ED officials said of about ~9,000 crore allotted to Jet Airways by various financial institutions, nearly 25%-30% of funds are suspected to have been diverted. Searches by the agency were also aimed at gathering additional evidence in Etihad Airways’ investment in Jet Privilege Private Limited (JPPL). The ED believes the company might have violated FDI norms when the UAE-based airline took a stake in JPPL in 2014.

On Friday, Delhi high court allowed Goyal to withdraw his plea challenging his lookout circular. On May 25, Goyal and his wife Anita were detained at Mumbai airport while he was travelling abroad, his plea had contended. Goyal informed Justice Navin Chawla that he was cooperating with investigations in an alleged fraud case.

Advocate Ajay Digpaul, counsel for the Centre, opposed Goyal’s claim of co-operating with investigations. However, the court did not comment on the merits of the case and allowed the application seeking withdrawal of the earlier petition. After noting submissions from both the sides, the court accepted the plea. In his plea, Goyal had said that despite repeated requests he was not given a copy of the lookout circular. The plea alleged his name was not mentioned in any FIR, hence he was not an “accused”.