Jet Airways raised fraud bills, faked invoices and siphoned off funds, says report

• A recent forensic audit on Jet Airways by the SBI reveals funds misappropriation and fraudulent bills.
  
• The report revealed that over a period of four years, a provision of ₹ 3,353 crore was made for a loan Jet Lite.
  
• The Ministry of Corporate Affairs (MCA) had ordered an investigation into Jet Airways for financial irregularities under the Companies Act.
  

A fresh set of troubles have hit the bankrupt Jet Airways. Recent audits by the State Bank of India (SBI) show that it has misappropriated funds relating to provision of loans, and raised fraudulent bills, as per an ET report.

The audit reveals that it did not verify invoices, which led to inflation of bills and fuel expenses for Jet Airways, though they remained static for other airlines.

“Provisions have been made for a ₹3,353 crore loan given to JetLite over four years. Board resolution, shareholder approval for making this provision was not made available to the auditors,” the forensic audit says.

A provision is when a company or a bank makes up for a loan which has gone bad or become unrecoverable, by putting extra funds into the kitty. These loans were also given out to Jet Lite in spite of the fact parent Jet Airways was making losses.

The airline was grounded in April this year, after it accumulated as much as ₹8,500 crore in loans. It later turned bankrupt as no buyer came by, leading it to bankruptcy.

The Ministry of Corporate Affairs (MCA) had ordered an investigation into the debt-laden airline for possible siphoning of funds and financial irregularities.

Related parties

As per the report, Jet has been mismanaging funds, in addition to siphoning them and conducting transactions with related parties.

Also, Jet Airways has raised monthly invoices of ₹15 crore for commercial activities. There is no documentation available for this. It had also billed as much as ₹140 crore fraudulently to company called JP Mills, an act which left it with a loss of ₹46 crore.

“There have been a systematic effort to siphon money from the company. In the limited analysis conducted it is clear that multiple methods were used to take out funds from Jet Airways,” sources told ET.

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