On Monday, May 25, former CEO-director of Jet Airways Naresh Goyal and his wife Anita were asked to deboard Emirates flight EK-507 at the Mumbai international airport.
The Goyals were allegedly in violation of a Ministry of Corporate Affairs (MCA) circular that barred them from travelling abroad while Jet Airways’ books were being investigated for suspicious financial activity.
The Emirates aircraft had already been delayed once before the Goyals were asked to get off with their checked in luggage.
A source close to the matter told Mint, “Around 3:35 pm, the duo had boarded an Emirates aircraft EK 507. The plane was at the taxiway when it was called back by air traffic control. The two were deplaned owing to some immigration clearance issues.”
Emirates said it was cooperating with Indian authorities.
The Times of India reports that they were planning to travel to London via Dubai on first class tickets. In Dubai, before taking off again, the Goyals were to be received with a limousine that would take them to their penthouse in Dubai Marina.
Along with the Goyals, another passenger was offloaded due to health issues.
In April, the MCA had issued a lookout circular against Naresh Goyal and wife Anita, barring them from travelling abroad. The Economic Times reports that the MCA had discovered “suspicious” transactions in Jet’s accounts and called for a probe into the couple.
In an effort to prevent the Goyals from absconding, the MCA issued the circular that mandates immigration officers at airports and other checkpoints to see if a traveller is wanted by any law enforcement agencies.
The Economic Times explains that MCA’s Serious Fraud Investigation Office, public banks, the Enforcement Directorate, and the CBI can issue lookout circulars if they are concerned about wilful defaulters trying to evade legal consequences.
Goyals step down from Jet Airways board
Naresh Goyal and Anita founded Jet Airways in 1992 and grew the airline to the country’s largest. Jet was also the only carrier to operate on international routes between Mumbai and Colombo, Kathmandu, and more.
However, the Goyals’ time at the airline became mired in controversy due to mismanagement. Etihad Airways, a minority investor with a 24% stake, demanded that the Goyals step down from their positions on the board once the airline began debt resolution.
During this process, stakeholders became concerned about Naresh Goyal’s control over the airline and also took issue with his power to nominate someone to the airline’s board of directors despite him agreeing to step down.
In the midst of this back and forth, Etihad grew frustrated and offered to sell off its stake to the lenders. However, the company has since been tempered and is willing to stay on as a minority investor.
Naresh Goyal and Anita finally stepped down from their positions on Jet’s board on March 26. Naresh Goyal resigned as board chairman and CEO, as well.
Jet Airways has been cash-strapped for the past several months. The lenders, led by State Bank of India, have been unable to find serious and willing investors who will revive the airline.
The lenders have also been unable to reach a consensus on whether or not to fund Jet in the interim with emergency funding of Rs 1,500 crore. This indecision led to the airline temporarily shutting down in April.
India’s longest-serving airline, it had a 22,000-strong crew that is now unemployed. They have not been paid their full salaries in months. Many of the airline’s employees protested the shutdown in Mumbai and Delhi.
Jet employee unions appealed to the Ministries of Finance and Aviation and Prime Minister Modi himself, asking them to step in and save their jobs. The staff even tried sparking grass-roots attention by speaking about their sudden stoppage of income in the face of the shutdown.
While there has been some progress in finding investors for Jet, the process does not have a clear path yet.
What happens to the Goyals next?
Indian institutions seem to be learning from their mistakes with Vijay Mallya and Nirav Modi, both of whom absconded to London after defaulting on loans worth crores.
Mallya has been in London after Kingfisher, the airline he founded, defaulted on loans worth Rs 9,000 crore. He was also being investigated for fraud and fund diversion, the latter of which the Goyals are under the microscope for, as well.
In February, Indian financial institutions got a small victory when British Home Secretary Sajid Javid ordered for Mallya to be extradited to India. Mallya has begun the appeals process.
Diamond merchant Nirav Modi also defaulted on loans and took refuge in London. He is wanted for a massive Rs 11,400-crore money laundering scam carried out through Punjab National Bank.
The Enforcement Directorate seized Nirav Modi’s assets and revoked his passport. The government also issued an extradition request to the UK. Javid approved Nirav Modi’s extradition in March after the latter was arrested at Metro Bank, London. The court refused to grant him bail; his legal team is battling the extradition order.
The move against Naresh Goyal and Anita is welcome for those who have been concerned about fraud and high-handedness by affluent people in India. The government is also seeming to hold wilful defaulters accountable and restore confidence in Indian financial and law enforcement agencies.
Rhea Arora is a Staff Writer at Qrius.