[GTO]

What a fall of an icon!

My heart melted on reading this news article. Can aviation experts advise if he actually committed fraud? Or is it a case of a large business being unable to repay its loans to a public sector bank?

If he has indeed committed fraud, he sure is paying the price for the same. He cut the branch he was sitting on. But I do feel that, in a few public cases, businessmen are put behind bars for being unable to repay their loans. When did bad loans & NPAs become fraud? Whenever a bank gives a loan to a business, there is always a risk factor attached to it (hopefully properly calculated & assessed).

Our overcrowded jails are in deplorable condition and I feel basic dignity should be offered to anyone, especially the elderly & ailing.

If he actually stole money, too bad for him, but there is no denying his achievements & impact on the aviation sector. Again, what a fall of an icon:

During the court session on Saturday, Goyal, with folded hands and "continuous tremors in his whole body," requested a few minutes for a personal hearing, which the judge granted. According to the court's 'roznama' (record of daily hearings), Goyal conveyed that "his health is very poor and precarious."

The businessman said that his wife is bedridden and their only daughter too is unwell. The jail staff has their limitations in helping him, said Goyal.

“I heard him patiently and also observed him when he made the submissions as such. I found that his whole body was trembling. He needs assistance even to stand,” the judge noted. Goyal pointed to his knees and said they were swollen and painful and he was unable to fold his legs. The Jet Airways founder brought to the court’s notice that he has severe pain while urinating and sometimes blood is passed through urine, coupled with unsustainable pain. Most of the time, he hasn’t been able to get assistance, he said.

The businessman told the judge that he had become very weak and there was no use in referring him to J J Hospital. The journey with other inmates as per the convenience of prison staff and escort party from Arthur Road jail to the hospital is “very troublesome, hectic and tedious which he cannot bear and sustain”. Also, there is always a long queue of patients and he cannot reach the doctor in time and whenever he is examined by the doctor further follow-up is not possible, Goyal said, adding that Goyal said that these are "very badly affecting his health".

He said his wife Anita is in the advanced stage of cancer and undergoing treatment. There is no one to look after her as his only daughter is also suffering from health issues, submitted Goyal, with tears in his eyes. He requested the court not to send him to J J Hospital and instead “allow him to die in the jail itself”. Goyal said “he has lost every hope of life and (it’s) better he should die rather than be alive in such a situation”.

Source

[condor]

I will stick my neck out and say it is possibly fraud. Over the past few years, NPA's have been dealt with on separate path (which is why we see the banks doing well - as also seen in the prices of their stocks in the market. Esp the public sector banks. If it was just NPA, the airline would have gone for restructuring or bidding for acquisition.

To add: from what little I have understood, a high-profile person being in jail today would be because of clear technical evidence. And the agencies take a lot of time to collect proper and provable evidence before a case is filed. Arrests and sentencing are only after this. And in this case, the case is under PMLA.

[Roy.S]

In India we seem to go through 3 stages with every business tycoon. Deification, suspicion and condemnation.
Apart from the obvious flaws in our banking and legal systems, there also seems to be an overly emotional way of looking at things which is part of our DNA.
I am not well informed enough to comment on the financial aspects of this but Naresh Goyal deserves better.

[YD14]

Originally Posted by condor

To add: from what little I have understood, a high-profile person being in jail today would be because of clear technical evidence. And the agencies take a lot of time to collect proper and provable evidence before a case is filed. Arrests and sentencing are only after this.

Isn't that more of a reason to grant him bail? Judicial custody is not the actual punishment but to prevent the tampering of evidence or witnesses. If agencies already have hard proof, why keep a man in Judicial Custody? He will eventually go to prison after the court sentences him. There have been cases in the past where fraudsters have left the country, but that can easily be dealt with by putting him on no international flying list or if going to the extreme, putting an ankle monitor on him.

[condor]

Originally Posted by YD14

Isn't that more of a reason to grant him bail? Judicial custody is not the actual punishment but to prevent the tampering of evidence or witnesses. If agencies already have hard proof, why keep a man in Judicial Custody? .

We will now easily digress at this point. Wouldnt he have applied for bail ? If he was eligible for bail, wouldnt the judge have given it ? I am not a lawyer, and my response to you is purely on logic. If anyone here is fully aware of the case then I would like to hear his response to your point.
Pls note - I am not trying to put down your point here.

[V.Narayan]

I won't put down in the public domain what I know about the matter and the man.

First, I'll give credit where it is due in that he built the second world class airline out of India after JRD's Air India. Most of us would agree with the top class service we enjoyed with Jet Airways. I'll also add he had an impishness and naughty sense of humour when interacting with him in sharp contrast to Vijay Mallya who was forever immersed in his bathtub of arrogance. Both have a penchant for theatrics. In Naresh Goyal's case it made you laugh in Mallya's case it made you grit your teeth. To his credit NG was a self made man. So far so good.

Second, I believe in current times the ED is being misused often {not always} to settle scores or to intimidate business houses to fall in line.

Having said the above two points it is my educated belief that the Govt is absolutely in the right on this one and Naresh Goyal deserves to be in the dock - age and health notwithstanding. I am very strongly inclined to believe the Govt's charge that funds were siphoned from the company by the quintal not just once but as a routine over 20 years. These charges are IMHO the tip of the iceberg. Within the industry talk on this has been ripe for 20 years and there is rarely smoke without a fire. It is my hope that on this case and the other one against Vijay Mallya the Govt must move full throttle with their prosecution.

I cannot dwell on his health and what is legally right for the Judge to do. It is easy to gain sympathy when you are old and unwell as evident on this thread. It is easy for readers to get all sympathetic to his plight after reading one side of the story. It is less easy to understand the pain inflicted on thousands upon thousands of unpaid employees, vendors and their families etc who starved and faced bankruptcy due to his money laundering activities - let's spare a thought for those faceless souls too. At least in my mind there is no sympathy for Naresh Goyal or Vijay Mallya for that matter.

IMHO Jet Airways did not fold up due to business reasons but due to the activities of the shareholders.

[Roy.S]

Originally Posted by V.Narayan

......It is easy to gain sympathy when you are old and unwell as evident on this thread. It is less easy to understand the pain inflicted on thousands upon thousands of unpaid employees, vendors and their families etc who starved and faced bankruptcy due to his money laundering activities - let's spare a thought for those faceless souls too. At least in my mind there is no sympathy for Naresh Goyal or Vijay Mallya for that matter.

That is a pertinent point and since its coming from you I think it should overrule any feelings of sympathy the rest of us might have.

At the end of the day I suppose one should not do the crime if one is not prepared do the time.

A question for you, Mr. Narayan: Do you feel that our banking and legal systems are better equipped now or are there more Goyals and Mallyas who continue to operate with impunity?

[anupam00]

Originally Posted by GTO

What a fall of an icon!

My heart melted on reading this news article. Can aviation experts advise if he actually committed fraud? Or is it a case of a large business being unable to repay its loans to a public sector bank?

Agreed Sir,

Well, here is my take on the same,

In India, what is really required is a special task force which helps businesses and helps them in case any support is required from the Government sector,

As a business owner loan was taken and now, when repayment is not done, he is behind bars, not sure if the default was wishful or not at the same time, what is required is to give at least those facilities which are reasonable,

Moreover, if there is a wish of the government things can surely turn like what is done in many cases,

A businessman starts the business not only to run the high house but support employees and taxes to the government and if the business ends in losses, he is the only one accounted

[V.Narayan]

Originally Posted by Roy.S

That is a pertinent point and since its coming from you I think it should overrule any feelings of sympathy the rest of us might have.

At the end of the day I suppose one should not do the crime if one is not prepared do the time.

A question for you, Mr. Narayan: Do you feel that our banking and legal systems are better equipped now or are there more Goyals and Mallyas who continue operate with impunity?

Thank you for your question. My experience with banks is not a good indicator of what happens if you default as I was one of this goody two shoes who repaid all loans on time. Phew! But from what I see around me over the last 5 to 6 years the system has tightened up a lot where chasing down defaulters goes. And it certainly is not easy on willful defaulters now as it used to be but never underestimate the cunning and ingenuity of a red-blooded Indian. While banks have improved on getting tighter the biggest defaulter of dues to vendors/suppliers are the Govt agencies themselves! And very little has been done to redress that.

Originally Posted by anupam00

As a business owner loan was taken and now, when repayment is not done, he is behind bars, not sure if the default was wishful or not at the same time, what is required is to give at least those facilities which are reasonable,

The case is really about illegal money laundering cross border. Willful default is only one component. This is not about loan default this is about hera-pheri of public money. Big difference between the two.

Originally Posted by anupam00

In India, what is really required is a special task force which helps businesses and helps them in case any support is required from the Government sector,

As Ronald Regan said, " the most frightening words are, 'I'm from the Govt and I am here to help you'. "

[Satkaj]

Scandal’s are not overnight, most of the cases they are part of system. Unfortunately in India( and many parts of the world) that’s the way things have been working. Though the accountability has certainly increased in recent times. You have a Successful airline running for years( Jet), one has super successful business empire spread across various industries ( Sahara), Successful Banker( Chanda Kochar) and many such examples of people who are caught and am sure these are not even 0.00001% of many around.

Most of the time when people are blessed by few good hands in power things look fully in control. The moment blessings are withdrawn things start turning around.

Mr. Goyal played his part, could not come out of the web created by him and no one else and now paying a price for it. Do I have a sympathy for such people? No. It’s was a path choosen by him.

[ishekk]

In any non banana republic, there are courts and there is trial. Only after the court convicts the accused, he serves the jail sentence. That is why we have something called bail because there are always chances that he is not guilty(the reason for having trial in court).

But the problem with new Indian laws like PMLA, UAPA is that person is assumed guilty till found innocent i.e till the trial concludes. And we all know that in a country like India, trial can take years to start & years to conclude.

What is the point of having courts & trial if accused is going to serve jail sentence even before being declared guilty. I find the Britishers were better here.

Also I believe, someone's whose iconic business has gone bankrupt, would already be suffering a lot.

[amitoj]

He is in jail probably for the crimes he committed. But no one should be deprived of proper medical care. I am not advocating for giving him special treatment but for better health conditions and care for all inmates.

[Samurai]

This topic reminds me of a book I read many years ago.

A Feast of Vultures: The Hidden Business of Democracy in India

The first private airline after the liberalization was East-West Airlines. Jet Airways came later. After an initial success, The MD Thakiyudeen Abdul Wahid was killed in 1995, forcing the airlines to shutdown by next year. His bitter business rival was Naresh Goyal.

In the book, Naresh Goyal has been painted as the guy who paid the D gang to take down Wahid. (Page 152)

[thanixravindran]

My 2 cents -

Stories about NG way of working in power corridors during his peak and his 'influence' in running aground the erstwhile national Carrier and hampering the low cost Carrier that was taking off is folklore now.

Coming to the loans non repayment, there are various degrees of classification by banks

1. NPA - Most common and first step of not honouring the repayment I think for two consecutive installments. Banks have to declare them NPA and start making provisions. Also, action to recover including recasting loans.

2. Wilful default - Next step is auditing to ascertain default nature and declare as wilful default if the loan is defaulted on purpose.

3. Loan account declared as fraud - Banks have to conduct forensic audit and establish whether by fraud, money is diverted not in line with loan conditions and with intent to defraud.

Canara bank in this case have done all of this for years and registered police complaint few years ago alleging crores of rupees were diverted from Jet India to offshore related entities which in turn by way of investment and spending on Goyals that lead to write off by Indian parent company.

On the bail, CBI and ED took up the case to find money trial and invoked PMLA which is quite stringent for bail as well tightened a lot in recent years. In fact, PMLA stipulates that magistrate has to strongly believe that the person may not be guilty to release a bail (Unfortunately this is not a trial and is ground for perjury in some countries as this reverses the presumption of innocence till proven guilty).

No lower court officer will dare to do it in current climate. In fact, SC held this provision in violation of fundamental right (Bail is norm, Jail is exception) in a high profile case involving a previous central government minister but government just added more conditions instead of removing it stating economic offences are like terrorism impacting the sovereignty of country.

So despite his appeal, I don't believe he will get bail till it goes upto SC. And don't forget Indian jails are filled with undertrials some way beyond actual punishment if found guilty. Personally, I don't have any sympathy for him but equally despise our judicial system which begs reforms and modernization (not by renaming laws or fighting for NJAC).

[The Rationalist]

Originally Posted by Samurai

A Feast of Vultures: The Hidden Business of Democracy in India

The first private airline after the liberalization was East-West Airlines. Jet Airways came later. After an initial success, The MD Thakiyudeen Abdul Wahid was killed in 1995, forcing the airlines to shutdown by next year. His bitter business rival was Naresh Goyal.

Exactly! Wahid was from Kerala. The source of his money to start an airline is not known. He was not the kind who would give any clear answers. There definitely was some hawala connection and to D company. Bombay police has maintained it was a local gang war and no serious investigation was ever done. It was too obvious that it ain't any local gang war, 30 bullets was pumped into him. It was to make sure he didn't make it. Wahid was a shady guy, who was taken out and replaced by another shady guy. Goyal most probably had to pay the royalties for his Godfather, the entire political system of that time was in cahoots with the underworld. Goyal would have spoken if the authorities wanted him to! He is shedding crocodile tears. Committing crimes and crying you are old is no excuse for one's past actions, he is lucky to have lived a good life at the expense of the tax payers. No criminal needs any sympathy.