The Enforcement Directorate (ED) on Saturday, 24 August, alleged that Jet Airways founder Naresh Goyal "structured" a number of tax evading schemes and siphoned off huge funds in foreign jurisdictions.
The ED conducted searches at the premises of Naresh Goyal on Friday, in connection with a case of alleged contravention of the foreign exchange law, officials said.
“The search resulted in the seizure of various incriminating documents and digital evidences. Further investigation and analysis of the seized documents is going on,” the agency said in a statement.
It said that the preliminary probe “indicates that Goyal structured various tax evading schemes involving its domestic and foreign companies, thereby siphoning off huge amount in foreign jurisdictions through dubious or fictitious transactions.”
ED: Goyal ‘Indirectly’ Controls Entities Abroad
The ED said Goyal “indirectly” controls various entities abroad, some of which are in tax haven nations. “Fictitious and inflated payments appear to have been made to some of these foreign entities under various airline lease agreements, aircraft maintenance agreements, among others.”
“Huge amounts appear to have been sent abroad by way of inflated commission to its own group entity in Dubai which acted as airline's exclusive overseas general sales agent (GSA),” the ED alleged. The agency said probe indicates that Goyal is “likely to be” the beneficial owner of some bank accounts abroad having huge deposits.
“Prima facie these transactions involve various violations under the Foreign Exchange Management Act,” it said. Official sources added that the charge of undisclosed assets held abroad could lead the agency to book Goyal under the stringent and criminal anti-money laundering law in the coming day.
A dozen premises, including Goyal's Mumbai residence, his group companies, their directors and offices of Jet Airways, were searched on Friday.
ED Probes ‘Doubtful’ Transactions by 19 of Goyal’s Firms
The businessman's empire, ED said, had 19 privately-held companies, five of which were registered abroad.
The agency is probing charges that these firms allegedly carried out “doubtful” transactions under the guise of selling, distribution and operating expenses.
It suspects that expenses at these companies were allegedly booked at fake and high costs and as a result, they “projected” huge losses.
A particular company under the ED scanner is the Isle of Man-based Tail Winds Corporation and it is suspected that it controlled all activities of Jet Airways.
The company (Tail Winds) was formed by Goyal in 1992 and the federal agency, as part of its latest action, also searched the premises of one Hasmukh Deepchand Gardi, who was a partner and a big investor in it, the officials said.
They said that Gardi, who is based in Dubai, also had a mention in the global offshore holdings list, known as the “Panama Papers”, and the agency suspected that the money invested in Tail Winds was sourced through illegal means.
It is understood that the ED is also looking at the airline's stake in Jet Privilege Pvt Ltd (JPPL), that was set up in 2012.
Jet Airways has a 49.9-percent stake in JPPL, which is part of the Etihad Group.
A few executives of the now closed down airline were questioned by the ED in connection with the case in a bid to ascertain whether FEMA and RBI guidelines were followed while inking the deal and carrying out other business operations.
On Thursday, Goyal was questioned by the Serious Fraud Investigation Office (SFIO) in Mumbai in connection with allegations of financial irregularities.
A full-service carrier, Jet Airways shuttered operations on 17 April after running out of cash.
A Ministry of Corporate Affairs (MCA) inspection report had found large-scale irregularities, including diversion of funds, at the airline, sources had said in July.
In March, Goyal stepped down as chairman of the airline.
Currently, Jet Airways is undergoing resolution process under the Insolvency and Bankruptcy Code.
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