SBI orders forensic audit of Jet Airways’ books

NEW DELHI: India’s largest lender, State Bank of India (SBI), has ordered a forensic audit of Jet Airways’ books for the period between April 2014 and March 2018, according to sources.

SBI, the lead banker to the airline’s over Rs 8,000 crore loans, has mandated EY to conduct the forensic audit of its books, which has already begun the process, sources added.

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-led airline is in talks with potential investors to raise funds to tide over the liquidity crisis.

“…it was decided to conduct a forensic audit of the accounts of Jet Airways for the period April 1, 2014 to March 31, 2018,” SBI sources said.

When contacted, an SBI spokesperson declined comments saying, “it’s the policy of the bank not to comment on individual accounts.”

Emails sent for confirmation to 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 whistle blower, said the sources quoted above. “E&Y LLP has already started the process.”

In August, the government had ordered an inspection of the airline’s books and papers. The outcome of the probe, however, is awaited.

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 airline is paying salaries in tranches for months now.

Last month, chief executive officer Vinay Dube had said the airline was in active discussions with various investors to secure sustainable financing.

Jet Airways is negotiating a deal with Etihad Airways to offload another 25% stake to the latter (Etihad Airways already owns 24% in Jet Airways), to mop-up funds.

Last month, there were talks that the Tatas were interested in buying out the Goyals from the airline and merge it with Vistara. But tata Sons said after a board meeting in mid-November that the talks were only preliminary.

Source: Press Trust of India