SBI Orders Forensic Audit Of Jet Airways’ Books
Country's largest lender State Bank of India has ordered a forensic audit of Jet Airways (India) Ltd.’s books for the period between April 2014 and March 2018, according to sources in the bank. The cash-strapped carrier has been grappling with financial woes for many months.
SBI, which is the lead banker to Jet Airways’ over Rs 8,000-crore loans, has mandated Ernst & Young to conduct a forensic audit of the airline’s books, sources said, adding that the process has already begun.
The airline has been struggling to keep afloat following three consecutive quarterly losses of over Rs 1,000 crore each.
The bank's action comes at a time when the Naresh Goyal-promoted airline is in talks with potential investors to raise funds to tide over its liquidity crisis.
"...it was decided to conduct a forensic audit of the accounts of Jet Airways for the period Apr. 1, 2014 to Mar. 31, 2018," SBI sources said.
When contacted, an SBI spokesperson declined to comment saying, "it's the policy of the bank not to comment on individual accounts."
Emails sent for confirmation from the airline and EY also did not elicit immediate responses.
The audit was ordered following a complaint of alleged financial irregularities in Jet Airways’ accounts by a whistleblower, the sources said.
"The forensic audit has been mandated to E&Y LLP and the firm has already started the process," the sources said.
In August, the government had ordered an inspection of books and papers of the airline. The outcome of the probe, however, is awaited.
Besides, there were also reports about alleged siphoning of funds to the tune of Rs 5,000 crore by the promoter.
With three back-to-back quarterly losses and a net debt of Rs 8,052 crore as of September 2018, the airline is working on ways to raise funds and reduce costs. The cash crunch has been so bad that it is paying salaries in tranches for months now.
Last month, Jet Airways Chief Executive Officer Vinay Dube had said the airline was in active discussions with various investors to secure sustainable financing.
The Mumbai-based airline in which Etihad Airways also owns 24 percent, is negotiating a deal with the Gulf carrier to offload another 25 percent holding, to mop up funds.
Last month, there were talks that the Tatas were interested in buying out Goyal’s stake from the airline and merge it with Vistara.