A SBI commissioned forensic audit of Jet Airways books has revealed embezzlement of funds relating to provision of loans and fraudulent billing for JP Miles.
According to ET, the audit report highlights that invoices raised were not verified leading to more billing and fuel expenses were raised significantly for Jet even when they remained constant for other airlines.
- “Provision has been made for Rs 3,353-crore loan given to Jet Lite over four years. Board resolution, shareholder approval for making the provision was not made available to the auditors,” the audit conducted by EY says.
- ET has seen a copy of the report. “Loans were given to Jet Lite despite Jet Airways recording losses in fiscal year 2015 and declining profit over the years,” the report added.
- The government had recently ordered a probe into Jet Airways for alleged siphoning off funds and for financial irregularities.
- The report indicated likely that the company was involved in “malpractices, mismanagement through siphoning off funds.
- The forensic audit also says that invoices raised on Jet Privilege were not verified, resulting in excess billing of nearly 1 crore during July-September 2015.
- Monthly invoice of Rs 15 crore was accounted for by Jet Airways for commercial activities without relevant documents supporting them.
- The report also says that the company was billed Rs 140 crore fraudulent JP miles leading to a loss of Rs 46 crore.
- Multiple other conflicts were noted in the miles accrued versus what the company reported.
- In the limited analysis it is clear that multiple methods were used for embezzlement of funds from Jet Airways, said a person aware of the development.
- SBI did not respond to an ET query. An official spokesperson for EY India said, “We are bound by our client confidentiality obligations and are unable to comment.”
By: Abhinav Ranjan, Business Writer, DKODING Media