Even as the Foreign Investment Promotion Board (FIPB) has given its green signal to the $379-million deal that will see Abu Dhabi’s Etihad Airways buying a 24 per cent stake in Jet Airways, all is not over as the board has referred it back to the market regulator, while the final call has to be taken by the Union Cabinet. Besides, questions remain on the bilateral air services agreement (BASA) between India and the United Arab Emirates (UAE).
After giving an in-principle approval to the deal, economic affairs secretary Arvind Mayaram, who is heading the FIPB, said it had been passed with “some conditions”. The board had deferred the deal last month, saying it was not able to determine who would be the real owners of Jet once the deal went through. The government feared that the control of the company was going into “foreign hands”.
Even if Jet and Etihad did revise the original shareholders’ agreement to comply with the norms, in which they maintained that ownership would remain with Jet, “questions on effective control and ownership still remains, which is the main reason why the FIPB had to refer it back to Sebi (Securities and Exchange Board of India). Once the definition of ownership and control gets notified, Jet has to come back with changes”, a senior official present in the FIPB meeting on Monday told Business Standard.
The official added the definition of effective control and ownership given by the civil aviation ministry under the proposal “surpasses” all other definitions such as those stipulated under the Companies Act and the department of industrial policy and promotion (DIPP).
Read News In Full31/07/13 Nayanima Basu/Business Standard
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