Crisis-hit Go First may face forensic scrutiny: Report
A forensic audit could be initiated against Go Airlines (India) Ltd by banks if a transaction audit to track undervalued or preferential transactions as part of the insolvency resolution process throws up adverse findings.
- Jun 22, 2023,
- Updated Jun 22, 2023 10:24 AM IST
A forensic audit could be initiated against Go Airlines (India) Ltd by banks if a transaction audit to track undervalued or preferential transactions as part of the insolvency resolution process throws up adverse findings, a media report said, citing a banker aware of the development.
According to the banker, lenders met Go Airlines management to find out why it unilaterally sought insolvency but are yet to get a satisfactory response, Livemint reported.
“We could look at a forensic audit depending on the report of the transaction audit. A transaction audit and a valuation report are expected to be commissioned by the resolution professional after the next meeting of the committee of creditors (CoC)," the banker said.
The CoC appointed Shailendra Ajmera as the Resolution Professional (RP) in the airline's ongoing insolvency case. Shailendra Ajmera is a Partner at Transaction Advisory Services at Ernst & Young (EY). Initially, NCLT, after admitting the cash-strapped carrier's insolvency plea, had appointed Abhilash Lal of consulting firm Alvarez and Marsal as interim resolution professional.
As per the banker cited above, lenders sought the change because they believe EY has more capabilities in turning around aviation companies than Alvarez. The resolution professional has just been appointed and directed by NCLT to reply to aircraft lessors’ petitions, the banker said.
On May 2, the cash-strapped airline filed for voluntary insolvency resolution proceedings and interim moratorium on financial obligations due to liabilities of Rs 11,463 crore.
In its bankruptcy filing to NCLT, it said it owes Rs 6,521 crore ($797.38 million) in total to Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, which are its financial creditors.
The NCLT on May 10 admitted the plea of Go First to initiate voluntary insolvency resolution proceedings.
Also Read: Pawan Hans divestment fails to take-off, Centre moves to scrap sale
A forensic audit could be initiated against Go Airlines (India) Ltd by banks if a transaction audit to track undervalued or preferential transactions as part of the insolvency resolution process throws up adverse findings, a media report said, citing a banker aware of the development.
According to the banker, lenders met Go Airlines management to find out why it unilaterally sought insolvency but are yet to get a satisfactory response, Livemint reported.
“We could look at a forensic audit depending on the report of the transaction audit. A transaction audit and a valuation report are expected to be commissioned by the resolution professional after the next meeting of the committee of creditors (CoC)," the banker said.
The CoC appointed Shailendra Ajmera as the Resolution Professional (RP) in the airline's ongoing insolvency case. Shailendra Ajmera is a Partner at Transaction Advisory Services at Ernst & Young (EY). Initially, NCLT, after admitting the cash-strapped carrier's insolvency plea, had appointed Abhilash Lal of consulting firm Alvarez and Marsal as interim resolution professional.
As per the banker cited above, lenders sought the change because they believe EY has more capabilities in turning around aviation companies than Alvarez. The resolution professional has just been appointed and directed by NCLT to reply to aircraft lessors’ petitions, the banker said.
On May 2, the cash-strapped airline filed for voluntary insolvency resolution proceedings and interim moratorium on financial obligations due to liabilities of Rs 11,463 crore.
In its bankruptcy filing to NCLT, it said it owes Rs 6,521 crore ($797.38 million) in total to Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, which are its financial creditors.
The NCLT on May 10 admitted the plea of Go First to initiate voluntary insolvency resolution proceedings.
Also Read: Pawan Hans divestment fails to take-off, Centre moves to scrap sale