India markets closed

Jet Airways crisis: MCA orders SFIO probe into airlines’ books over siphoning of funds

FE Bureau

The ministry of corporate affairs (MCA) is understood to have asked the Serious Fraud Investigation Office (SFIO) to begin a probe into Jet Airways on suspicion that the promoters siphoned off money.

Sources said the move follows after the MCA started a preliminary enquiry into the company by inspecting its books and found evidence of siphoning off of money from the company.

The registrar of companies, Mumbai, in fact, recently submitted a report to the MCA which found some discrepancies in the books of Jet Airways, an official said.

A report has been submitted which found some irregularities in their books. There will be further investigations, a decision on the report is expected latest by Friday, the official said.

According to sources, some instances have come up in MCA s investigation where Jet is suspected to have written off investments in various subsidiary companies without any apparent reason.

The MCA also wants a probe as to how Jet suddenly turned in a loss in FY18 after posting a profit for a couple of years. This was despite the company receiving fund infusions in the form of Etihad s investments twice during the period.

Investigations into the books of Jet Airways were initiated in 2018 as a result of a complaint filed by Arvind Mehta, trustee, Indian Investor Protection Council.

Jet Airways did not respond to FE s email queries till the time of going to the press.

Meanwhile, the Enforcement Directorate is also understood to be probing investments made by the Abu-Dhabi based Etihad Airways into JetPrivilege Private Limited (JPPL) in 2014.

Etihad has not been contacted by the Enforcement Directorate. Etihad acquired its share in JPPL nearly six years ago in compliance with all regulatory requirements, the company said in an email response.