NEW DELHI :
The registrar of companies (RoC) in Mumbai will report to the government in a month whether the promoters of Jet Airways (India) Ltd need to be investigated for any fund diversion, a person familiar with the development said.
The RoC has decided to speed up its ongoing inspection of Jet Airways’ books, which was initiated last August after the company deferred its first quarter FY19 results the same month.
This is an added cause of concern for the shareholders of the grounded airline. Shareholders of a company are not liable for a business failure, but any fund diversion by promoters can deprive them of their limited liability.
The RoC’s inspection of a company’s books is similar to a preliminary fact-finding exercise and will lay the ground for further action. “It (the subsequent action) could be a detailed investigation by the RoC itself or by any other agency," the person mentioned above said on condition of anonymity.
The move comes at a time when a process of share sale in Jet Airways, led by its lenders, is underway. The insolvent carrier last flew on 17 April with neither promoters nor lenders willing to provide the emergency funding needed for it to remain afloat till a turnaround plan is agreed upon between shareholders and lenders.
The airline’s shareholders or lenders did not take it to a bankruptcy court in time as a going concern either, which would have resulted in a court-appointed resolution professional executing a turnaround plan.
This has led to a situation where the company’s lenders, led by the State Bank of India (SBI), took charge of the resolution efforts that have largely been defined by caution, amid criticism about the government bailout of a private company. “A corporate rescue plan outside the Insolvency and Bankruptcy Code (IBC) will work if there is a credible revival plan backed by investors. Without that, such efforts will go haywire. With operations halted, there is hardly any point in referring the company to a bankruptcy tribunal now," said a person privy to how the bankruptcy courts work on condition of anonymity.
Information available with the BSE shows that 51% of Jet Airways is with major shareholders Naresh Kumar Goyal and Anita Naresh Goyal in the quarter ending March 2019.
An email seeking comments sent to Jet Airways on Wednesday morning remained unanswered at the time of publishing.