Jet Airways Founder Grounded as India Probes $2.6 Billion Fraud
(Bloomberg) -- An Indian court denied Naresh Goyal, founder of India’s once largest airline by market value, permission to fly overseas after the government told the court a $2.6 billion fraud investigation involving Jet Airways India Ltd. is underway.
The Delhi High Court’s single-judge bench of Justice S.K. Kait expressed apprehension Goyal may not return like others facing allegations of fraud. “I won’t name but some people are sitting outside the country, and India is not able to bring them back,” Kait said. The court sought government’s written response and said it will hear the case again on Aug. 23.
Jet Airways owes at least 73 billion rupees ($1.1 billion) to banks and is undergoing bankruptcy resolution after it defaulted on loans that were due by Dec. 31. The carrier is a casualty of cut-throat price war in India’s tough aviation market seven years after Vijay Mallya’s Kingfisher Airlines Ltd. shut down.
Goyal on May 25 was made to deboard a flight to Dubai and London at Mumbai airport after India’s Serious Fraud Investigation Office had issued a lookout notice for him. Goyal’s lawyer Maninder Singh said the lookout circular was illegal and curtailed his fundamental right to life and liberty. The founder of the airline needs to travel overseas to explore funding for the carrier, Singh told the court.
The government has opposed Goyal’s petition. “It is a serious investigation of 18,000 crore-rupee ($2.6 billion) fraud. He must cooperate in the investigation,” the government’s lawyer Additional Solicitor General Maninder Acharya said. Goyal has been summoned by the investigator to depose on July 10.
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