Fresh trouble is around the corner for Naresh Goyal-owned Jet Airways, currently undergoing acute financial stress, as the Ministry of Corporate Affairs (MCA) has opened a preliminary enquiry (PE) into the carrier on suspicion it siphoned off funds.
A senior official confirmed to Moneycontrol that the Mumbai Registrar of Companies (RoC) will inspect Jet’s books of accounts.
Jet Airways has been dogged by financial stress, and recently wrote to employees seeking a cut in salaries. The company put the blame of its distress on rising costs due to high crude oil prices among others.
Barring FY16 and FY17, Jet Airways has not posted a profit for the past 11 years.
That stress also came with associated bad news on the regulatory front: the company recently held off from announcing its quarterly result after its audit committee did not sign off on the numbers. Both BSE and NSE have sought an explanation from the company on this.
A source close to the development told Moneycontrol that the RoC is also coordinating with market regulator SEBI over its inquiry of Jet's books.
An email to Jet Airways seeking comment did not elicit a response at the time of publishing. NSE later sought clarification on this article, to which the airline replied saying it had not received any communication from the MCA.
Further, the RoC may also look into the role of auditors. Arvind Gupta, who recently became famous as the whistleblower in the ICICI Bank-Videocon case, recently wrote to the Finance Ministry, SEBI, RBI and the Chief Vigilance Commission, complaining of irregularities.
Gupta questioned the audit committee's inability to "prevent the promoters of Jet Airways from siphoning off Rs 5,125 crore from the companies".
According to Gupta, the company, under its Jet Airways and Jet Lite brands, undertook transactions "under the guise of selling and distribution expenses and other means" with companies privately owned by the promoter.
However, the MCA’s probe is independent of Gupta’s complaint.
(Note: Updates with NSE seeking clarification from Jet Airways on the above article, and the airline's subsequent reply to the exchange)
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