The Indian government has ordered a probe by the Serious Fraud Investigation Office (SFIO) into the affairs of Indian carrier Jet Airways and its group companies, after finding instances
of fund diversions and large-scale irregularities, the Economic Times reported quoting unnamed sources as saying.
The report also revealed that the government would oppose airline founder Naresh Goyal's plea in the Delhi High Court seeking the lifting of a travel ban. The sources said Goyal is likely
to be summoned by the SFIO, which comes under the Ministry of Corporate Affairs (MCA).
The Business Standard, which claimed it had reviewed the July 4 government order, said in a report that MCA had ordered the SFIO probe under Section 212 (1) C of the Companies Act, based
on its inspection report. The report indicated “prima facie” that the company was involved in “malpractices, mismanagement through siphoning of funds…preferential and related party transactions,
prejudicial to public interest.”
Alleged fund diversions
Jet Airways' group of companies include Jet Lite, Airjet Ground Services Limited, Airjet Engineering Services Limited, Airjet Training Services, Airjet Security and Allied Services and Jet
Privilege Private Limited.
The Business Times report quoted sources close to the development as saying that there have been allegations of fund diversions of more than Rs 5,000 crore out of the airline by Naresh Goyal
through questionable transactions. In fact, several instances have come up in the MCA investigation where Jet Airways is suspected of having written off investments in various subsidiary
companies without any apparent reason.
In related development, the National Company Law Appellate Tribunal (NCLAT), which is hearing the bankruptcy case against Jet Airways, has agreed to also include Insolvency claims filed by two
European creditors at the insolvency court administrator in the Netherlands.
Seized Jet aircraft is chained at AMS
Jet Airways owes over Rs 8,500 crore (US$1.3 billion) to a consortium of 26 banks led by State Bank, and over Rs 13,000 crore to hundreds of vendors and around 23,000-odd employees.
The carrier was also facing insolvency proceedings in the Netherlands and was declared bankrupt in response to a complaint filed by H Esser Finance Company and Wallenborn Transport, which claimed
unpaid bills worth around Rs 280 crore. One of Jet Airways' planes has been seized and is parked at Amsterdam Schiphol Airport.
The three-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya, last week accepted the demand by the Dutch bankruptcy administrator to hear the case in New Delhi on the condition that
the Dutch insolvency administrator would not sell the confiscated Jet Airways plane.
The Jet project is over
NCLAT has directed to list the matter on August 21, for the next hearing and issued a notice to the consortium of Jet Airways lenders directing them to file their reply within two weeks. An
earlier appeal by the Dutch insolvency administrator with the NCLT in Mumbai to recognise their proceedings, had been rejected.
Jet Airways became the first domestic carrier to go into bankruptcy after the NCLT Mumbai bench admitted an insolvency petition, which was filed on June 20 by the State Bank of India (SBI) on
behalf of 26 lenders in a bid to recover the dues.
Jet Airways flew for the last time on April 17 after it ran out of cash.
Nol van Fenema