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India’s Fraud Billionaires

The Delhi High Court, in a recent case, rejected the plea of Naresh Goyal and his wife Anita, the dubious promoters of Jet Airways, to be permitted to travel abroad. They contended that they were not trying to evade any investigation and even though there is no case registered against them and nor are they named as an accused in any FIR, they were yet prevented from taking a flight to Dubai on 25th May, 2019. They said that they need to travel abroad to be able to raise funds for the airline, now under liquidation and that they needed to travel overseas to maintain their NRI status and residency visa in the UK and the UAE. Their primary plea was that they are not an accused in any criminal case and so they cannot be deprived of their right to travel. The High Court was not impressed by this specious and bogus plea and said that if Naresh Goyal wishes to travel abroad, he must deposit Rs. 18,000 crores which his grounded airline owes to the lenders or give a similar bank guarantee and said that the case is under investigation by the Central Government, which must be heard in the matter. The judge said that Goyal can contact his overseas friends from India and ask them to remit the funds by RTGS.

It is worth recalling that it was on 25th May that Naresh Goyal and his wife boarded a flight at Mumbai for Dubai, with baggage checked in his wife’s name. The plane was on the tarmac ready to take off, but was called back to the terminal by the authorities. Naresh Goyal and his wife who were travelling first class were deplaned by the immigration authorities, saying that there was a look out circular for them at the SFIO’s request and that they cannot be allowed to leave India. Much as Naresh Goyal and his wife, both of whom jointly and actively managed the operations of the airline they founded, may plead innocence, the fact is that the affairs of Jet Airways are under investigation by criminal agencies like the SFIO, ED, ITD etc., after the preliminary inspection of its records by the MCA reported several irregularities in its operations, including malpractices, mismanagement, siphoning, diversion of funds and scammy related party transactions. Naresh Goyal is known to be a master at gaming/manipulating the system, but with his patron in chief, the former civil aviation minister Praful Patel too under ED investigation, he failed in his last flight and has been grounded in India to face the law here.

This case of Jet Airways owing Rs. 18,000 crores to lenders, though we think it is much more than that, and the MCA alleging rampant diversion/siphoning of funds by its promoter Naresh Goyal, raises a much more larger and serious issue of what we would call India’s fraud billionaires and millionaires. This shameful and dubious list is long and keeps growing longer, because with each mega fraud being unearthed, one more fraudster gets added to the list. It is a list of persons who merrily duped the system i.e. banks, impoverished their own companies thereafter and enriched themselves, such that if banks have lost about Rs. 2.50 lakh crores to wilful/deliberate defaulters so far, that is the amount that got deposited into the personal wealth of these big ticket and influential fraudsters. This long list of persons who cheated the system and became billionaires is headed by the likes of Jatin Mehta of Winsome Diamonds, Nirav Modi, Mehul Chokshi, Sandesaras of Sterling Biotech and maybe will soon include Naresh Goyal, whose defunct airline is now under investigation for its criminal state of affairs.

These fraudster billionaires and millionaires were minted by the system, headed by the neta, babu and the bankers who were negligent, incompetent or corrupt and were willing colluders for a price. The irony is that while they cheated the system and made the mega bucks, they gave crumbs to all those who colluded with them, their partners in the crime. Take the case of the giant ILFS fraud of over Rs. 1 lac crores, where for managing its bogus group financial statements, its auditor Deloitte was paid Rs. 20 crores or take the case where the CMD of a bank was arrested a few years ago, taking a bribe of Rs. 50 lacs, for sanctioning a loan of Rs. 50 crores to the Singhals of Bhushan Steel, which must have been siphoned away. A mere 1% of what was looted.

And the frauds that created these illegal billionaires were not sophisticated or difficult to detect. They were blatant and stared in the face of the colluding bankers, which they obviously ignored. The ground reality now is that because of such looting of the system, banks have been unable to lend and are being recapitalised by the government. For want of bank loans, the growth of the Indian economy is suffering, which is an even bigger national loss, than what the corrupt bankers gave away to these fraud billionaires/millionaires, for a pittance.

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