Govt inspected Jet Airways’ books after allegations of fraud

Lenders led by the State Bank of India have taken control of the airlines

Mumbai: Jet Airways (India) Ltd. on Friday said that the Ministry of Corporate Affairs (MCA) had during September last year conducted an inspection and sought documents from the airline’s management before approaching the company again last month for seeking further documents and details.

This happened after the Registrar of Companies (ROC), an office under the Indian Ministry of Corporate Affairs that deals with administration of the Companies Act, had started probe into Jet Airways books during August last year after the airline delayed the announcement of its quarterly results. Separately a whistle blower had also written to the MCA alleging siphoning of funds by the promoters of the airline.

“..the Regional Director, Western Region, Ministry of Corporate Affairs had, in September 2018, conducted an inspection and sought certain details and documents. Further details/documents were sought in April, 2019,” Jet Airways said in a statement to the stock exchanges.

“The Company had provided the required details/documents and no further communication has been received by the Company in this matter,” it added.

Earlier this week, the ROC had submitted a report to the MCA highlighting instances of violation of Companies Act and certain unexplained trail of funds in the books of the airline.

Mint had on Friday reported that the ministry of corporate affairs (MCA) may order a probe by India’s fraud investigator after discovering instances of diversion of funds by the promoters of Jet Airways (India) Ltd, a government official said, requesting anonymity.

“MCA will take a call based on the examination of the report. The observations of Companies Act violations are serious in nature and unexplained funds trail does point to fund diversion. The report could be referred to Serious Fraud Investigation Office (SFIO) for a probe of fraud allegations,” the person had told Mint.

However, the orders for an SFIO probe haven’t been sent by the MCA yet.

Meanwhile, a bidding contest to find an investor for Jet Airways is set to end on Friday evening. Jet Airways suspended operations on 17 April under more than $1 billion of debt and a cash crunch. Lenders led by the State Bank of India have taken control of the airline after the resignation of its founder and chairman Naresh Goyal. However, any charge of fraud will intensify woes for the grounded airline, which is struggling to find a bidder to infuse the much-needed equity.

[“source=livemint”]