August 21, 2018 / 4:35 AM / in 2 months

Indian government probes Jet Airways for alleged siphoning of funds: Business Standard

(Reuters) - India’s corporate affairs ministry is probing allegations that beleaguered carrier Jet Airways Ltd (JET.NS) siphoned off funds, the Business Standard newspaper reported on Tuesday.

FILE PHOTO: Jet Airways aircraft stand on tarmac at the domestic airport terminal in Mumbai, India September 9, 2009. REUTERS/Punit Paranjpe/File Photo

The probe was at a “crucial stage” and was being carried out by a division in Mumbai city, the paper quoted a senior government official as saying.

Siphoning of funds, according to Indian regulations, relates to a company using bank loans for purposes unrelated to its operations.

Jet, India's leading full-service carrier, said here on Tuesday it had not received any communication from the ministry of corporate affairs. The ministry did not immediately respond to Reuters' request for comment.

The news comes days after the airline deferred its June-quarter financial results by a few weeks after its audit committee declined to sign off on them “pending closure of certain matters”.

Jet also told staff earlier this month it was running out of money, a source had told Reuters, but it has denied this and said it is confident of cutting costs and keeping its planes flying.

Reuters reported on Monday that private equity firm TPG Capital was considering investing in Jet, which is part owned by Etihad Airways, but is not close to finalizing a deal.

Reporting by Tanvi Mehta in Bengaluru; Editing by Sai Sachin Ravikumar

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