Jet Airways founder Naresh Goyal, arrested in an alleged Rs 538 crore bank fraud case, siphoned off funds from India to overseas by creating various trusts and used them to buy properties, a special court here noted on Monday, citing investigation carried out so far by the ED.
The Enforcement Directorate (ED) told the special court set up under the Prevention of Money Laundering Act (PMLA) that maximum money that was siphoned off has been stacked in foreign accounts.
Goyal (74), whose ED custody was extended till September 14 by the court in a money laundering case linked to the alleged bank fraud of Rs 538 crore at state-run Canara Bank, told the judge he was ailing and needs to be hospitalised.
The veteran businessman, who once operated India's top private airline, claimed the aviation sector runs on the basis of bank loans and all the funds cannot be termed as laundering.
The promoter of the now grounded airline told the court, in person, that his health condition was poor and his body was aching.
"Can't move my shoulder, knee…I cried the whole night, could die because of this situation, would like to be admitted to a hospital," an emotional Goyal told the judge.
Goyal was arrested by the ED on September 1 under the PMLA following a long session of questioning at the central agency's office here.
He was produced before special judge for cases under PMLA, MG Deshpande, at the end of his initial remand on Monday.
The central probe agency sought his custody for another four days.
The ED told the court that maximum money that was siphoned off has been stacked in foreign accounts and there is a person in the United Arab Emirates (UAE) to look after it and further investigation was needed into the matter.
Goyal, represented by advocates Abbad Ponda, Amit Desai and Amit Naik, argued that he didn't take any loans on his or family's name or stood as a guarantor for them.
Desai argued that a significant amount of bank loan taken (by Jet Airways) prior to 2011 was used for acquiring Sahara Airlines and added "This is a historical event in business."
"Not just Jet Airways, other airlines, too, are in a crisis. The aviation sector runs on the basis of funding from banks; all these cannot be termed as laundering," Desai submitted.
There is a crisis in the economy and that is why he defaulted in making some repayments, he added.
The court, in its order, said statements of the accused prima facie indicate that he has avoided giving details of all his bank accounts as well as movable and immovable properties in India and abroad.
When he was interrogated about these details, Goyal referred to one Hasmukh Gardi, a UAE resident whom he had given power of attorney. Therefore, his (Gardi's) confrontation with the accused is necessary and the ED has taken active steps for the same, the court noted.
The court further stated that various statements and materials collected during the previous ED remand have revealed the accused has created various trusts abroad and through them he purchased multiple immovable properties.
The money for those trusts is nothing but the proceeds of crime (POC) siphoned off from India to abroad, the judge said.
Investigation has further revealed Goyal had purchased high-value properties in Mumbai and subsequently sold the same. He also formed a web of companies in India through which he has acquired a lot of immovable assets, the court stated, citing the probe so far.
All this prima facie indicates that there was remarkable progress in the investigation undertaken by the ED in previous remand and hence it is seeking extension of the accused's custody to ascertain the end use of the POC, it said.
“If the prayer is rejected the same work will get paralyzed…. Hence, I am satisfied that the prayer made by the ED is genuine,” the court said while extending Goyal's custody till September 14.
The court directed the central agency to permit the businessman to carry all his prescribed medicines.
It asked the probe agency to immediately respond if the accused complains of any health issue and attend the same without any delay.
The ED shall arrange phone calls of the accused with his cancer patient wife once in the morning and evening for 15 minutes each in the presence of an officer, the court directed.
The probe agency was also directed to provide proper bedding, suitable to the health and orthopaedic issues of the accused, and a cervical pillow to him.
The court allowed Goyal to have home-cooked food on a daily basis, considering his health and medical conditions.
The money laundering case stems from an FIR of the Central Bureau of Investigation against Jet Airways, Goyal, his wife Anita and some former company executives in connection with an alleged Rs 538-crore fraud case at Canara Bank.
The FIR was registered on the government lender's complaint which alleged it sanctioned credit limits and loans to Jet Airways (India) Ltd to the tune of Rs 848.86 crore of which Rs 538.62 crore was outstanding.
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