Grounded carrier Kingfisher Airlines is facing a close regulatory scrutiny over suspected lapses in its accounting practices and the Corporate Affairs Ministry is looking into possible violations of the Companies Act.

The airline, part of Vijay Mallya-led UB Group, has been grounded since October 2012, after being bogged down by huge losses.

The Ministry is closely looking at possible violation of companies law by Kingfisher Airlines, especially with regard to accounting practices, sources said.

Taking note of the observations made by the carrier’s statutory auditors, the Ministry has also sought an update from the Registrar of Companies (RoC) about the financial aspects of the company for the 2013-14 financial year.

The carrier, which is registered with RoC Bangalore, is yet to submit its annual financial results for the 2013-14 period to the stock exchanges.

In a filing to the BSE on August 26, the carrier had said that steps were being taken to appoint directors to comply with the provisions of the Companies Act, 2013 and listing agreement with the stock exchanges.

“Thereafter, steps will be taken towards publishing the audited results for the year ended March 31, 2014 and for the quarter ended June 30, 2014,” it had said.

Back in May, Kingfisher had informed stock exchanges that “there are hardly any employees attending office and the company is currently operating with skeletal staff making it difficult to audit and publish the results in time.”

For the year ended March 2013, the carrier saw its net loss widen to Rs 4,301.12 crore. During that period, the gross income stood at Rs 683.46 crore.

In September, state-owned United Bank of India had declared Kingfisher Airlines, its promoter Vijay Mallya and other directors as wilful defaulters but the decision is currently stayed by the Calcutta High Court.

UBI’s exposure to Kingfisher Airlines was around Rs 350 crore as part of consortium led by State Bank of India.

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