Alleging FDI violations during transaction with Etihad in 2014, the Enforcement Directorate is conducting searches at multiple Jet premises.
In the newest development, India’s financial crime investigation body, the Enforcement Directorate (ED) conducted raid at the residences of Jet Airways founder Naresh Goyal. The raids are in connection to allegations of violating Foreign Direct Investment (FDI) norms. Apart from Goyal’s residence, raids are being conducted in at least a dozen more locations in Delhi and Mumbai.
The Deal under Scanner
As per reports, the raids were carried out under the Foreign Exchange Management Act (FEMA). The ED is looking for additional evidence in Etihad Airways’ investment in Jet Privilege Private Limited (JPPL). The probe agency believes Jet may have flouted FDI norms when the UAE-based Etihad acquired a minority stake in JPPL in 2014.
Enforcement Directorate conducts searches at the premises of #JetAirways founder Naresh Goyal in connection with a case of alleged contravention of the foreign exchange law.— All India Radio News (@airnewsalerts) August 23, 2019
An Etihad spokesperson commented on the new development, “Etihad is co-operating fully with relevant authorities and we abide by the laws of various countries we operate in.”
The ED is looking for additional evidence in Etihad Airways’ investment in Jet Privilege Private Limited (JPPL) in 2014.
This is the first major development in a month around the now stagnated airline which ceased operations in April due to unavailability of operational funds. As the airline’s slots were divided between the other players in the Indian aviation market, over ten thousand employees lost their jobs.
Still no relief for the beleaguered Airline
Jet Airways is currently facing insolvency proceedings under the Insolvency and Bankruptcy Code. The once India’s biggest private sector airline has liabilities exceeding Rs 26,000 crore, which includes over Rs 10,000 crore in vendor dues, Rs 8,500 crore plus interest owed to lenders, over Rs 3,000 crore in salaries due, and another Rs 13,500 crore in accumulated losses over three years.
Sad to see graveyard of aircrafts at Chennai.Two of my favourite airlines. Need better vlmodels for aviation else all of us suffer – prices, choice, connectivity, ease of travel & more connected country. @jetairways @kingfisherworld— K.Ganesh (@ganeshk03) August 21, 2019
Wonder if could have been handled better pic.twitter.com/VhObpWJUkk
In July, an inspection report by the Ministry of Corporate Affairs (MCA) flagged large-scale irregularities in Jet Airways’ books. These allegedly include diversion of funds. Founder Naresh Goyal stepped down as chairman of the airline, but the July revelations point fingers directly at him.