Jet Airways share price fell in early trade today with lenders meeting to finalise a resolution under the June 7 Reserve Bank of India mandate on stressed assets later in the day. Jet Airways share price fell to an all-time low of 69.75, down 14.44% in early trade compared to the previous close of 82.05 on BSE. Jet Airways share price has been losing for the last 11 days and fallen 52.73% in the period.
Jet Airways share opened at a loss of 7.62% at 75.80 level on BSE. Jet Airways share price has fallen 43% during the last one week. The stock has fallen 81% during the last one year and lost 75% since the beginning of this year.
The lenders have to take a decision whether to rescue the rescue airline or let it go to insolvency court, according to a report in The Economic Times.
A flow of negative news has hit the airline stock recently.
The Income Tax (I-T) Department has summoned Jet Airways founder Naresh Goyal for questioning in relation with an alleged case of tax invasion. This is the first time when an enforcement agency has summoned Goyal on charges of any financial irregularities in Jet Airways.
The investigation wing of the I-T Department has found alleged irregularities in transactions between Jet Airways and its Dubai-based group firms to evade taxes worth Rs 650 crore, sources told the Economic Times. The grounded airline reportedly paid commissions to its general sales agent in Dubai every year. Goyal will be asked to provide an explanation for these payments, they said.
According to the investigation report, such payments were allegedly in excess of permissible business transactions under the Income Tax Act and will not considered as allowable expenses.
On June 14, Jet Airways share price slumped after NSE said shares would be pulled out of Futures and Options trading from June 28. Jet Airways share price slumped over 23% to 84.80 level compared to the previous close of 110.40 on BSE.
On June 11, Jet Airways share price crashed amid a report that Hinduja Group and Etihad Airways may not proceed with plans to resurrect Jet Airways.
London-based Hinduja Group has decided to stop talks to buy a stake in the ailing airline, while Etihad Airways of Abu Dhabi has also stalled its plan to infuse more funds into the Mumbai-based airline, according to a report by Mint.
On June 10, two operational creditors-Shaman Wheels and Gaggar Enterprises-took it to the insolvency court National Company law Tribunal (NCLT) seeking bankruptcy proceedings against the airline.
The development came at a time when banks were looking to resolve the once premier airline's debt issues outside the insolvency process.
"The results couldn't be approved in view of the ongoing bidding process undertaken by the domestic lenders for change in the management of the company, coupled with resignation by members of the board of directors, its key managerial personnel and other employees across functions," the airline said in a filing to the Bombay Stock Exchange.
Debt-laden Jet Airways, which has been grounded since 18 April due to funding woes, has seen its top executives exiting the company in the past few months, following the resignation of its founder Naresh Goyal from the board of the airline in March.
Naresh Goyal and his wife Anita Goyal had resigned from the Jet Airways board on March 25, transferring the control to the lenders led by the State Bank of India. Top five executives of the airline, including CEO Vinay Dube, already resigned from the airline citing "personal reasons". Jet Airways has an overall debt of over Rs 8,500 crore. The banks have appointed SBI Capital Markets as the investment banker to find an investor to scout an investor for the company.
Edited by Aseem Thapliyal