Jet Airways Money Trail: Senior Staff’s Salaries Paid By Mosquito Coil Maker: ED

ED says that the salaries of some senior employees of Jet Airways (India) Ltd (JIL) were paid by a firm dealing in botanical products, mosquito coils, chemicals, and pharmaceuticals – reports The Times Of India.

In its chargesheet on the alleged irregularities committed by the airline founder Naresh Goyal and his wife, and some former company executives of the now-grounded private airline – ED has identified S A Sangani & Associates as the firm that paid Rs 40.9 crore as salary to JIL’s senior management, according to the TOI report.

The firm began payroll processing in April 2018 though it was not incorporated until June 13, 2018. No expenses were recorded in the profit and loss account of the firm, according to the chargesheet.

The chargesheet claims that Goyal hired a consultancy firm, HD Pathak and Associates, to process emoluments – in strict confidentiality – on salaries, JIL paid to the general manager and employees above that level.

How were Goyal’s wife and children paid salaries?
Goyal’s wife Anita was vice-president, daughter Namrata was in customer service, and son Nivaan worked as a manager for cost reduction-efficiency improvement in JIL. The Enforcement Directorate has attached assets worth ₹538 crore as part of its ongoing money laundering probe linked to Jet Airways, including residential flats and commercial premises in London, Dubai, and various Indian cities.

Goyal was arrested by the ED on September 1 and remains in judicial custody. A chargesheet was filed against the 74-year-old businessman and five others on Tuesday in connection with the alleged fraud of ₹538 crore at Canara Bank.

Goyal has denied any knowledge of the salary payments through the consultancy firm, said the chargesheet. It said payments of Rs 279.5 crore were recorded against the name of the consultancy firm as “other allowances”. These were suspicious and were being probed, it said.

The ED recorded statements of senior executives of the consultancy firm who said they processed salaries of the JIL management from their account on instructions from Goyal received through associate firms. The consultancy firm used to charge Rs 1,000 as a monthly payment per employee from JIL as its fee.

The ED chargesheet said JIL would transfer the salary amounts to the current account of Pathak HD & Associates and then through email would provide employee names, details of amounts to be paid, and account details in which the salary was supposed to be credited.

“Then, salaries were accordingly prepared by Shailesh Sangani & Company and thereafter they used to transfer the salaries to concerned employees from their current account,” the chargesheet said.

Rajesh Chaturvedi, the managing partner of Chaturvedi & Shah LLP, was the joint statutory auditor of JIL and had a business association with HD Pathak and Associates. Shah told the probe agency that two of his other companies (Alpine Cooperate Advisory Services Pvt Ltd and Novo Cooperative Advisors Pvt Ltd) provided tax-related services to JIL.

“JIL siphoned off the loans from a consortium of banks led by SBI and PNB, and Naresh Goyal implemented a massive financial fraud in which the funds of JIL were systematically diverted in the garb of irrational and inflated General Sales Agent (GSA) commissions, large unexplained payouts to various professionals and consultants, by granting of loans to JetLite Limited (100 per cent subsidiary to acquire Air Sahara), and subsequently writing off the loans by making provisions in the balance sheets,” the finance related frauds investigating agency had earlier alleged.