India’s East-West Airlines Director imprisoned for the ’90s fraud

East West Airlines

Faisal A Wahid, the Director of the now-defunct East-West Airlines (India), was given a 12-month prison term this week for a shady fuel trade in the 1990s.

East-West Airlines started its operations in the early 1990s when the Indian government introduced its “Open Skies Policy” and a number of commercial air charter companies emerged.

The Airline began with three Boeing 737-200s. Madhavrao Scindia, then-minister of Civil Aviation, ordered Indian Airlines to bring in more aircraft in 1992 to offset the effects of a debilitating pilot strike. East West later bought another four, bringing its total to 7 Boeing 737s.

East-West Airlines started its operations in the early 1990s with 3 Boeing 737-200s

On 13 November 1995, Thakiyudeen Wahid, the company’s Managing Director was shot and killed by thugs. The airline owed three Boeings to PLM Equipment, an American business, for $3.3 million. PLM Equipment went to court after first appealing to the DGCA to deregister the aircraft. East West was given a deadline by the Delhi High Court to pay up or return the plane. After that, the three aircraft were grounded. East West Airlines finally ended all operations on August 8, 1996.  

According to the then Special Public Prosecutor, Indian Oil Corporation Limited (IOCL) was providing Aviation Turbine Fuel (ATF) for East West Airlines-owned and -operated aircraft. Officials from East West Airlines were instructed to submit Demand Drafts (DDs) to IOCL for the fuel in accordance with the payment method they had mutually agreed upon.

According to the allegations, East West sent IOCL 29 copies of DDs between March 21, 1996, and May 21, 1996. The fuel was provided to them on the basis of those DDs. Original DDs were allegedly not sent to IOCL. The investigation revealed that DDs were created from several banks and that faxes were despatched but then cancelled. An FIR was filed in 1999.

East West sent IOCL 29 copies of DDs between March 21, 1996, and May 21, 1996 that was created from several banks and that faxes were despatched but then cancelled

In a case that originally came before the courts in 2001, investigators charged 8 East-West Airlines employees and Jayanand Shetty, the then Assistant Branch Manager of Vijaya Bank, with fraud and conspiracy in response to a complaint from the IOCL to the CBI’s economic crimes division. Four defendants, including the airline’s Deputy Managing Director, Shiabuddin A Wahid, have passed away since that time.

The CBI Court convicted Faisal A Wahid and Jayanand Shetty guilty of cheating the IOCL of INR 17.3 million (USD 209,432) through forged notes of demand, 26 years after the closure of the airline.

DD copies were forwarded by fax to the oil business, which then supplied the fuel, as part of the scam. Following the correct procedure, East-West cancelled the order and never gave the oil firm the initial demand draught. The court found that this took place five times with the help of Jayanand Shetty, a bank official who helped by not deducting the fuel expense from the airline’s accounts.

The CBI Court convicted Faisal A Wahid and Jayanand Shetty guilty of cheating the IOCL of INR 17.3 million (USD 209,432) through forged notes of demand, 26 years after the closure of the airline.

Faisal was only a minor player in the fraud, according to Judge SU Wadgaonkar, while the primary defendant, Shihabuddin Wahid, passed away during the twenty-one-year legal battle.

Faisal was given a prison sentence as well as a fine of INR 650,000 (USD 7,869). In addition, Wadgaonkar penalised the airline INR 50,000 (USD 605). The judge granted both men bail while the case was pending an appeal to India’s High Court. The bank official had been fined and given a year in prison.

On December 20, 2022, Faisal Wahid, the Airline’s Director of Operations and Marketing, appeared before a criminal court in Mumbai and was given 12 months imprisonment. 

Source: TOI

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