Skyways Air Services faces Rs 44.20 crore loss FIR, AEO suspension

Skyways Air Services Limited faces a Delhi Economic Offences Wing first information report, or FIR, alleging at least Rs 44.20 crore of direct loss to PG Paper Company Limited, United Kingdom. Skyways Air Services’ Authorized Economic Operator-LO, or AEO-LO, certificate was suspended from May 4, 2026 while the FIR remains under investigation.

What does the Rs 44.20 crore FIR allege against Skyways Air Services?

FIR No. 0172 of 2025, dated December 12, 2025, alleges inflated freight invoicing, bribery, fraud and misrepresentation involving business obtained from PG Paper. The FIR, registered at Delhi’s Economic Offences Wing police station, names Skyways Air Services as accused No. 3 and its subsidiary Brace Port Logistics Limited as accused No. 2, among nine accused persons. PG Paper identifies accused No. 1, engaged through a consultant company, as the main accused.

PG Paper alleges that RIV Worldwide Ltd. UK, Skyways SLS Logistik GMBH and Brace Port Logistics Limited conducted business exceeding Rs 80 crore with it from 2021. It estimates direct loss of not less than Rs 44.20 crore from alleged unlawful practices, excluding additional alleged losses from artificially higher freight rates, vendor restrictions, lack of fair competition and abandoned business opportunities. The prospectus presents these as allegations in the complaint and FIR, rather than findings of liability.

The FIR records offences under the Indian Penal Code, 1860 and the Bharatiya Nyaya Sanhita, 2023, including provisions relating to criminal breach of trust, cheating, forgery and criminal conspiracy. Although the complaint refers to alleged contraventions under the Prevention of Money Laundering Act, 2002 and the Foreign Exchange Management Act, 1999, the FIR was not registered for alleged offences under either law. That distinction defines the offences formally recorded in FIR No. 0172 of 2025.

Why is Skyways Air Services’ AEO-LO suspension in effect?

Skyways Air Services’ AEO-LO suspension is linked to the FIR being under investigation, rather than to a disclosed final determination. The Assistant Commissioner at the Directorate of International Customs, Central Board of Indirect Taxes and Customs, issued a notice dated May 14, 2026 under paragraph 5.7.2 of Circular No. 33/2016-Customs dated July 22, 2016. The notice concerns suspension and proposed revocation of AEO-LO Certificate No. INAABCS3895B0F255.

The suspension became effective on May 4, 2026, and Skyways Air Services cannot avail benefits under the AEO Programme during that period. The prospectus does not quantify the value of those benefits, specify which benefits Skyways Air Services had used, or identify effects on individual shipments. It establishes only that programme benefits are unavailable while the suspension continues.

Skyways Air Services submitted a response on July 28, 2026 requesting that the competent authority not revoke the certificate. The proposed revocation remained pending before the authority as of the Red Herring Prospectus date. The certificate’s status will therefore depend on the customs authority’s decision and on the investigation outcome cited in the suspension notice.

How is Skyways Air Services connected to the subsidiary allegations?

Skyways Air Services is named as an accused in the FIR and is also the parent of Brace Port Logistics Limited. PG Paper alleges that Skyways Air Services holds 80% of Brace Port Logistics Limited and that the subsidiary’s directors are closely associated with Skyways Air Services directors. PG Paper further alleges that senior management of Skyways Air Services materially influenced Brace Port Logistics Limited’s ownership structure and key operational decisions.

The alleged business relationship covers three subsidiaries, RIV Worldwide Ltd. UK, Skyways SLS Logistik GMBH and Brace Port Logistics Limited, rather than Brace Port Logistics Limited alone. Their business with PG Paper exceeded Rs 80 crore from 2021, compared with the claimed minimum direct loss of Rs 44.20 crore. The prospectus does not allocate revenue, claimed losses, invoices or alleged conduct between the three subsidiaries.

Skyways Air Services received a police notice dated February 3, 2026 seeking information for the investigation and submitted its reply on February 13, 2026. It stated that it was not involved in the day-to-day operations, execution or handling of the underlying transactions under enquiry. Skyways Air Services also said it would cooperate with the investigation, while it and its subsidiary seek legal recourse against the FIR allegations.

What is the current legal position for Skyways Air Services?

The FIR investigation and the proposed AEO-LO revocation were both pending as of the prospectus date. Skyways Air Services has not disclosed that the FIR was quashed, that a court had taken cognisance, or that customs had restored the certificate. The prospectus categorises the FIR as an outstanding criminal proceeding even at the FIR stage, whether or not a court has taken cognisance.

Skyways Air Services also disclosed an Employees’ State Insurance notice dated October 30, 2025 concerning alleged non-payment at an Ernakulam branch for July 2024 to July 2025. It said applicable contributions had been paid on a consolidated basis under its main code, supplied paid challans and workings, and requested that the authority drop the proceedings. The notice had not been withdrawn as of the prospectus date.

The company’s materiality policy, dated June 23, 2025 and read with a June 26, 2026 resolution, sets a pending-litigation threshold of Rs 1.8418 crore. The Rs 44.20 crore alleged direct loss in the FIR is about 24 times that threshold. The policy uses the lower of the board-set threshold and specified measures based on turnover, net worth, or average absolute profit or loss after tax.

Conclusion

The disclosed legal-regulatory issue combines a December 2025 FIR alleging at least Rs 44.20 crore of direct loss with the suspension of AEO Programme benefits from May 4, 2026. The allegations concern business exceeding Rs 80 crore conducted since 2021 by three subsidiaries, while Skyways Air Services is itself named as an accused and is alleged to hold 80% of Brace Port Logistics Limited.

The next disclosed developments are the outcome of FIR No. 0172 of 2025 and the customs authority’s decision on proposed revocation of the AEO-LO certificate. Skyways Air Services submitted its July 28, 2026 request for non-revocation and states that it will cooperate with the investigation while pursuing legal recourse, but neither matter had been resolved in the prospectus disclosure.