JET AIRWAYS founder Naresh Goyal approached for bail three months after he was arrested, claiming that he had not siphoned off loan money for personal benefits, and instead blamed various challenges faced by the airline industry and losses to the tune of Rs 15,000 crore incurred by the airline for its closure.
Goyal was arrested on September 1 by the Enforcement Directorate (ED) on allegations ofsiphoning off funds from the Rs 538.62 crore loan given by Canara Bank to the company.
Countering allegations that his family members were appointed and funds were diverted towards their salaries, Goyal said that these were approved by independent board and audit committee of the company and he had no role in it.
“The problems faced by Indian airlines in general and full-service carriers in particular have been totally ignored by the ED when a comparison of the financial performance of other full-service carriers would have been a clear indicator of the reasons for losses incurred by JIL,” the plea said.
The 74-year-old in his bail application said that Jet Airways (India) Limited (JIL) commenced in 1993 and he had been the non-executive director/chairman. For 25 years, the company never defaulted on payments of his financial commitments, including to banks and Airport Authority of India, the plea said. It added that the airline industry faced various challenges in India due to various factors including global economic slowdown, rising fuel prices, adverse foreign exchange rates, high infrastructure and ground handling costs. It added that the airline operated a full-service premium carrier but due to increased competition in the domestic market with the advent of low cost carriers, it began mounting losses as it had to discount fares.
“JIL tried to stem these losses by acquiring a low cost carrier but various policies did not permit to integrate the operations of JIL and through the acquired low cost carrier the losses were in fact increased by the acquisition. As a result, the losses of JIL mounted, and the cumulative consolidated loss as on 31 March 2019 was approximately INR 15,000 crore,” Goyal’s bail plea said. The plea also referred to a statement by the Minister of Civil Aviation Jyotiraditya Scindia in 2022 in the House about the accumulated losses incurred by Air India on consolidated basis from 2007-08 till 2020-21 were in the range of INR 85,000 crore.
It said that in the absence of emergency funding, the airline was not in a position to pay for fuel or other critical services to keep the operations going. Consequently JIL suspended its operations on 18 April 2019 even as it had an annual turnover of Rs 25,000 crore in FY 2017-18.
The plea said that in 2018 the airlines began defaulting on the financial commitments and a plan was worked out between State Bank of India and Etihad to revive the airline by payment of Rs 750 crore each but it was not implemented. The plea said that Goyal had made a personal contribution of Rs 250 crore as collateral security in 2019 but that too was not returned.
“This demonstrates the applicant’s bonafide intentions to wholly support JIL and its operations,” the plea filed through his lawyer Ameet Naik states. The plea says that the allegations by ED were vague and turned a blind eye on the airline’s operation for 25 years. It also said that the decisions were taken by a board and he was not a personal guarantor for any credit facilities or loans taken by the company.
The plea said that payments claimed to made to his family members including wife Anita and children, Nivaan and Namrata were on account of various consultancy agreements which were cleared by the board.
Goyal also referred to his various ailments and referred to the “grave medical condition” of him and his wife while seeking bail. Special Judge M G Deshpande has directed the ED to file a reply on it.