Inspection ordered into Kingfisher's account books

Mumbai/New Delhi: The Corporate Affairs Ministry has ordered an inspection of the account books of debt-ridden Kingfisher Airlines after receiving complaints from stakeholders alleging violation of company law like provisions on debt-equity ratio, sources said.

The Registrar of Companies, Bangalore, has been asked to carry out inspection of the books of accounts of Kingfisher Airlines under section 234 of the Companies Act, it said.

The RoC has sought information from the company about its debt-equity ratio, details of secured and unsecured loans of 2009-10 and 2010-11, daily operational expenses and administrative costs, among other things, the sources said.

Kingfisher had on Saturday reported widening of net loss for the quarter ended June 30, 2012 to Rs 650.8 crore.

The order for inspection was issued last week. The RoC has also been asked to look into possible violations of accounting norms by Kingfisher Airlines in its balance sheet, it said.

Section 234 of the Companies Act provides powers to seek more explanation or details from a company or inquire into its financial details if the Registrar is not satisfied.

When contacted, a Kingfisher spokesperson said it was a "technical issue" and he would revert only after consulting the company secretary.

Kingfisher had on Saturday reported widening of net loss for the quarter ended June 30, 2012 to Rs 650.8 crore mainly due to costs associated with non-operating aircraft. Its Chairman Vijay Mallya had acknowledged that the airline's net worth had been adversely affected, even though it was a going company.

The airline had posted a net loss of Rs 263.5 crore in same period last year. In January, the private air carrier had allotted preferential shares to a consortium of lenders, besides promoter firms United Breweries (Holdings) and Kingfisher Finvest India Ltd, under a scheme to recast its debt.

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