Bengaluru: Jet Airways Ltd said on Wednesday it would consider cost-reduction measures and a turnaround plan at its 27 August board meeting, which would also take up June quarter results. The beleaguered airline had deferred its Q1 results by a few weeks after its audit committee declined to sign off on them “pending closure of certain matters”.
Jet Airways later told the exchanges that the term of its audit committee chairman Srinivasan Vishvanathan, an independent director on the board, expired at the conclusion of the board meeting.
On Tuesday, Jet Airways share prices fell after a Moneycontrol report said the company is under scrutiny for alleged embezzlement of funds. Jet Airways, however, said in a stock exchange filing that it “has not received any communication from the Ministry of Corporate Affairs in this regard.”
The Registrar of Companies, which is under the ministry of corporate affairs, has started an initial inquiry into potential wrongdoings such as diversion of cash, and will also look at the role of auditors, people familiar with the matter said, asking not to be identified citing government rules. The examination is only preliminary, and it may turn into a formal probe upon any evidence, one of them said.
The examination of its accounts by authorities is the latest trouble to hit the Mumbai-based airline, which is seeking funds to meet liquidity requirements after cash on hand dwindled to $46 million, the lowest since at least 2008. The company has reported losses in all of the last 11 financial years but two, and needs to repay about $447 million in debt coming due through 31 March.
The carrier, part-owned by Etihad Airways PJSC, deferred its earnings originally scheduled for 9 August by more than two weeks, saying the company’s management and auditors needed more time to finalize its accounts. It will now announce its results on 27 August.
Lenders want Jet Airways to raise money by selling shares before they could commit to any additional loans, people familiar with the matter said last week. Blackstone Group LP is in talks to buy a stake in Jet Air’s loyalty program Jet Privilege, Bloomberg News reported last week, while Mint reported Monday that TPG Capital LP is considering an investment in the airline.