Jet Airways faced a financial crisis in April 2019 due to adverse "macroeconomic" conditions and not any fraudulent conduct on his part, founder Naresh Goyal said on Friday in his discharge plea before a court here in a money laundering case.
The Enforcement Directorate, however, opposed the application, alleging that "he orchestrated a systemic fraud, bleeding a premier national airline to death, defrauding public sector banks and enriching himself and his family through a sophisticated global laundering network".
The businessman was arrested in September 2023 by the ED, which claimed he had laundered money by siphoning off loans given to Jet Airways by Canara Bank to the tune of Rs 538.62 crore.
The 77-year-old businessman, currently on medical bail, said in the plea that Jet Airways (India) Limited (JIL) encountered significant financial challenges due to "adverse macroeconomic conditions" that were beyond its control, such as escalating aviation fuel prices, foreign exchange volatility and intense competition.
The airline was forced to temporarily suspend its operations in April 2019 due to its inability to service mounting financial obligations, he said.
"However, this situation was solely attributable to adverse market conditions, and not due to any fraudulent conduct by the applicant (Goyal) or other members of the management," the application said.
JIL's financial distress was "the product of commercial and industry conditions, not evidence of laundering", Goyal said, denying the ED's allegations that funds were siphoned off through General Sales Agents (GSAs).
Maintaining that using GSAs is a standard practice for ticket sales and market expansion, the plea said all related payments were approved by the JIL board and disclosed in financial statements.
On the alleged diversion of a Rs 538.62 crore loan taken from Canara Bank, it said the figure represented the bank's total outstanding claim rather than an amount disbursed to Goyal.
Rs 365.57 crore of this amount consisted of letters of credit and bank guarantees issued directly to vendors for aircraft leasing and fuel, it said.
The ED claimed in its reply that it had established, "through incontrovertible documentary and testimonial evidence, a prima facie case of extraordinary magnitude".
The central agency asked the court to dismiss the plea and continue the proceedings for framing of charges, which will pave the way for a trial.
The matter will next be heard on September 9.
The ED's money laundering case stems from an FIR registered by the Central Bureau of Investigation (CBI) against Jet Airways, Goyal, his wife Anita and some former executives for an alleged bank fraud.
(With inputs from PTI)