India to investigate Jet Airways over alleged funds mismanagement

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India ordered an investigation on Thursday into alleged mismanagement of funds at Jet Airways, which halted operations in April after running out of cash.

The Ministry of Corporate Affairs has ordered India’s Serious Fraud Investigation Office (SFIO) to carry out the investigation, a government order seen by Reuters showed.

The order refers to alleged siphoning of funds and unspecified financial irregularities at Jet Airways, which was once India’s largest private airline, but did not include details on the allegations or name any individuals.

A Jet Airways spokeswoman did not immediately respond to a request for comment on the order, which also called for investigations into Jet’s group companies including low-cost Jet Lite and Jet Privilege, which manages its loyalty program.

In a separate development, a government source told Reuters that the former chairman and founder of Jet Airways, Naresh Goyal, had approached Delhi High Court, seeking to overturn an order that stops him from travelling abroad.

The source said the government plans to oppose the appeal by Goyal, who along with his wife Anita, was stopped from leaving India at Mumbai airport in May.

Goyal, who Jet Airways said in March would step down from the board and reduce his stake in the airline, did not immediately respond to a request for comment.

Goyal has been asked to appear before the SFIO next week, the source added.

Creditors said last month they plan to begin insolvency proceedings in a last-ditch bid to find a buyer for the carrier or its remaining assets and recover some of what they are owed.

Jet Airways and its lenders have been searching for new investors since its planes were grounded and staff left unpaid, but have so far failed to agree on a proposal.

India’s largest stock exchange said in June the carrier would soon no longer be traded in the derivatives market, while day-trading in the stock would also be barred in a bid to curb speculative trading in the troubled company.

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