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SFIO report on Kingfisher atleast six months away

It will take at least six months for SFIO to complete its investigation into alleged fund diversions by the now defunct Kingfisher Airlines to other Vijay Mallya group companies.

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SFIO is expected to take at least six months to complete its investigation into alleged fund diversions by the now defunct Kingfisher Airlines to other Vijay Mallya group companies.

As part of its investigation into the grounded carrier, the Serious Fraud Investigation Office (SFIO) has sought information from United Spirits Ltd (USL), which is now controlled by British liquor major Diageo.

Sources said that SFIO has started probing the matter of alleged fund diversions by Kingfisher Airlines to other group companies and is in the process of gathering information.

It would take at least six months for the agency to complete its investigation, they added.

SFIO comes under the Corporate Affairs Ministry.

Last year, the ministry had asked for a scrutiny of the financials of Kingfisher to ascertain whether the company had violated any provisions of the companies law, especially with regard to its accounting practices.

On September 15, United Spirits Ltd (USL) had informed stock exchanges that the SFIO has sought information from it about alleged fund diversions by Kingfisher Airlines.

"The SFIO noted that the company had conducted an inquiry wherein possible fund diversions were identified and requested some information from the company in relation to that," USL had said, adding that it was cooperating with the authorities in providing the required information.

USL had also come under the scanner of multiple regulators amid allegations of fund diversion from the company to some UB Group firms between 2010-2013.

In April this year, the board of United Spirits Ltd -- in which Diageo has bought a controlling 55% stake for about $3 billion -- asked Vijay Mallya to step down as the company's chairman after "various improprieties and legal violations" were found in a probe into loans worth Rs 1,337 crore given by USL to UB Group firms.

USL had said that an "inquiry" report submitted by its MD and CEO, which revealed that between 2010 and 2013, funds involved in many transactions were diverted from the company and/or its subsidiaries to certain UB Group companies, including in particular, Kingfisher Airlines.

Bogged down by mounting debt and operational woes, Kingfisher Airlines was grounded in late 2012. The carrier had accumulated losses of Rs 16,023 crore, while its net worth fell to a negative Rs 12,919 crore at the end of March 2013.

Aviation regulator DGCA (Directorate General of Civil Aviation) cancelled the licence of the carrier in December 2012. 

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