Free Press Journal

Jet Airways comes under Registrar of Companies lens


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Mumbai : The Mumbai Registrar of Companies (RoC) on Thursday ordered a formal inspection of cash-strapped Jet Airways for the alleged siphoning of funds, according to officials familiar with the matter.

The RoC in its preliminary scrutiny has found substantial grounds for further investigations against the airline, officials said, adding that it will conduct the inspection under section 206 (5) of the Companies Act.

Jet Airways, which is grappling with financial woes, on Thursday confirmed that it has received a communication from the RoC. The loss-making airline said it was taking necessary steps to provide the responses to the RoC, which comes under the corporate affairs ministry.

Jet Airways reported a whopping Rs 1,323 crore of net losses for the June quarter due to higher fuel cost, falling rupee and low fares.

Earlier this week, a senior official said the ministry has sought details about certain issues from the airline, which is also under the regulatory scanner for postponement of its June quarter results. To a query on whether the airline has received a communication from the RoC regarding certain financial matters, an airline spokesperson replied in the affirmative.

“The company has received communication from the office of Registrar of Companies (RoC) seeking response to a compliant received by their office. The company is taking necessary steps to submit its responses in this regard,” the spokesperson said.

Jet Airways board, on August 9, deferred announcement of unaudited financial results for the June quarter and the same was announced on August 27.

Battling financial woes, the airline is working on ways to reduce costs.

On August 27, Jet Airways said it would monetise loyalty programme JetPrivilege and wet-lease some of its small aircraft to mobilise urgent working capital.

Against the backdrop of second back-to-back quarterly loss, the airline has announced a turnaround plan, which includes a capital infusion by selling a stake in JetPrivilege, and a massive cost cutting to save around Rs 2,000 crore over the next two years.

Cost cutting covers various areas of operations such as maintenance, sales and distribution costs, fuel bill, reducing debt to save on interest and enhancing manpower productivity with special focus on the crew, the airline said on August 27.