The Enforcement Directorate late Friday night arrested Jet Airways founder Naresh Goyal in a money laundering case linked to an alleged bank fraud of Rs 538 crore at the Canara Bank, official sources said. He was taken into custody under the Prevention of Money Laundering Act (PMLA) following a long session of questioning at the central agency's office here.

Goyal, 74, is expected to be produced before a special PMLA court in Mumbai on Saturday where the ED will seek for his custodial remand.

The money laundering case stems from an FIR of the Central Bureau of Investigation (CBI) against Jet Airways, Goyal, his wife Anita and some former company executives in connection with an alleged Rs 538-crore fraud case at the Canara Bank.

The FIR was registered on the bank's complaint which alleged that it sanctioned credit limits and loans to Jet Airways (India) Ltd (JIL) to the tune of Rs 848.86 crore of which Rs 538.62 crore is outstanding.

The CBI had said the account was declared "fraud" on July 29, 2021.

The bank alleged that the forensic audit of JIL showed that it paid "related companies" Rs 1,410.41 crore out of a total commission expenses, thus siphoning off funds from JIL.

"As per sample Agreement of Jet Airways (India) Ltd (JIL), it was noted that the expenses of General Selling Agents (GSA) was to be borne by GSA itself and nor by JIL. However, it was observed that JIL has paid various expenses amounting to Rs 403.27 crore which is not in tune with the GSA," the complaint now part of the CBI FIR alleged.

It said personal expenses such as salaries of staff, phone bills and vehicle expenses among others of the Goyal family were paid paid by JIL.

Among other allegations, it surfaced during the forensic audit that funds were also siphoned off through Jet Lite (India) Ltd ( JLL) by way of making advance and investing and subsequently writing off of the same by making provision. JIL diverted the funds for the subsidiary JLL in the form of loans and advances and investments extended.