Kingfisher Airlines executives can be jailed over loss of company accounts

Executives of Kingfisher Airlines, including its chief financial officer and company secretary, could be face criminal cases if the airline's books of account are not produced before the the Serious Fraud Investigation Officer (SFIO).

Mint reported on Monday that the airline's books vanished after a technology vendor, whose dues were not paid, took away computers and servers that housed the company's accounts. Mint, quoting SFIO officials, said the airline claimed it did not a back-up of the files.

"A company has to maintain proper records of accounts, register and muster rolls under Companies Act and various labour laws, contravention of which can result in penalties or imprisonment. A company cannot say it does not have records because it has not paid its IT vendor. This cannot be a defence. A lenient view can be taken if the company premises were damaged in a fire or earthquake," says Ravi Kini, managing partner, Kini & Co. 

Kingfisher Airlines founder Vijay Mallya is on a "self-exile" in the United Kingdom after the government turned the heat on him over fraud and alleged fund diversion to offhsore accounts.

"It is a crime. The executive team is liable to be punished," says Shriram Subramaniam, founder at proxy advisory firm InGovern Research Services Pvt Ltd.

Mallya has been declared a proclaimed offender by a Prevention of Money Laundering Act (PMLA) court in Mumbai over money laundering charges. The Enforcement Directorate, the Central Bureau of Investigation are seperately investigating these charges. Mallya also faces cases in the Karnataka High Court, the Debt Recovery Tribunal in Bengaluru and the Supreme Court, over non-payment of dues of over Rs 9,000 crore he had taken to run the now-defunct airline.

Kingfisher Airlines, launched by Mallya in 2005, redefined luxury air travel in India before it was grounded in 2012 due to losses.