Jet Airways founder Naresh Goyal, his wife Anita, and four associated companies are facing charges by the Enforcement Directorate (ED) in a money laundering conspiracy tied to an alleged Rs 538 crore fraud at state-run Canara Bank. The charges, involving shell companies and fund siphoning, were recognized by the Mumbai court which has summoned the accused for a hearing on November 9.
The ED investigation has revealed money laundering activities involving Jet Airways Pvt Ltd (JAPL) and Jet Airways LLC Dubai. These entities reportedly received large commissions from the airline, including Rs 282 crore in GSA commission to JAPL and Rs 415.92 crore to Jet Airways LLC Dubai. The probe also implicated Hasmukh Gardi, co-founder and linked to Tail Winds Corporation, in several dubious financial transactions.
Goyal is accused of misappropriating public funds intended for business loans for personal and non-business uses. Despite facing financial troubles, high payments to professionals and consultants were sustained under his leadership. Funds were transferred to Goyal's family via JAPL's agency committee and the Over Riding Commission (ORC).
Anita Goyal and Nivaan Goyal, Naresh's son, also received significant consultancy payments under a Rs 1.15 crore annual contract from Jetair Pvt Ltd, funded by a consortium of banks led by State Bank of India (SBI) and Punjab National Bank (PNB).
The charges stem from a Central Bureau of Investigation (CBI) FIR against the Goyals and ex-executives of the now-grounded Jet Airways, providing sufficient prima facie proof of their involvement. If found guilty, they risk severe penalties in this serious crime.
All implicated properties could be seized under the Prevention of Money Laundering Act, 2002. Despite joining the Billing and Settlement Plan (BSP), the airline continued commission payments to JAPL. This case underscores the ED's commitment to such prosecutions.
InvestingPro Insights
In the context of the ongoing investigation into Jet Airways, let's delve into some key insights from InvestingPro. As per InvestingPro Tips, the company has demonstrated impressive gross profit margins, though it's worth noting that it has not been profitable over the last twelve months. The company's share price has also performed poorly over the last decade, with a significant fall over the last five years. Furthermore, Jet Airways does not pay a dividend to its shareholders.
In terms of real-time data, Jet Airways has a market cap of $2846.85M USD. The P/E ratio stands at -1.09, reflecting the company's lack of profitability. The company's revenue for the last twelve months as of Q2 2023 was $5857.7M USD, a decrease of 2.54%. The gross profit for the same period was $1312.75M USD, indicating a gross profit margin of 22.41%.
These insights, along with hundreds of others, are available on InvestingPro, providing valuable information for potential investors and those interested in the financial markets.
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