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Government orders inspection of books of Jet Airways: P P Chaudhary

Friday, August 31, 2018, 14:59
This news item was posted in Business category and has 0 Comments so far.

The Corporate Affairs Ministry has ordered an inspection of “books and papers” of Jet Airways, Union Minister P P Chaudhary said today. The Registrar of Companies (RoC), which comes under the ministry, had sought an explanation from the crisis-hit full-service carrier following receipt of a complaint. To a query about alleged corporate governance lapses at Jet Airways and the issues being looked at by the RoC, the Minister of State for Corporate Affairs said the ministry has ordered an inspection of the airline’s books of accounts. “The ministry has ordered an inspection of books and papers under Section 206(5) of Jet Airways on August 30, 2018,” Chaudhary told in an interview. However, he did not elaborate on the specific issues. Section 206 of the Companies Act, 2013, provides power to call for information, inspect books and conduct inquiries. Depending on the circumstances, the central government can carry out “direct inspection of books and papers of a company by an inspector appointed by it for the purpose” under Section 206(5). There was no immediate response from a Jet Airways spokesperson to a query about the government ordering an inspection of the airline’s books. Jet Airways, which has been flying for over 25 years, posted a net loss of Rs 1,323 crore for the latest June quarter on August 27. The carrier is also under the regulatory lens for deferring the results, which were initially scheduled to be announced on August 9. On August 30, the airline said it has received communication from the office of RoC seeking comments/ clarifications and explanations in response to a complaint received by their office. “The company is taking necessary steps to submit its response in this regard,” it had said. The reply was to a query on whether it has received a communication from the RoC regarding certain financial matters. Grappling with financial troubles, the carrier 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.

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