The Foreign Investment Promotion Board (FIPB) Monday approved the proposed 24 percent stake-sale in Jet Airways to Abu Dhabi-based Etihad Airways, with certain conditions.
"The (deal) has been cleared by the FIPB with minor changes to the language. All issues raised by civil aviation ministry have been resolved. Now the deal is expected to go to the Cabinet Committee on Economic Affairs (CCEA), but that will happen when a cabinet note is circulated by the finance ministry," Civil Aviation Minister Ajit Singh told reporters after the FIPB meeting.
"The minor changes in the language is that English laws will be used for arbitration. Jet would still have to take approval of civil aviation ministry even after cabinet nod for any future changes to shareholders agreement under the Aircraft Act 1934," the minister added.
The conditional approval by the FIPB came after the Jet Airways submitted an amended shareholding agreement to the finance and civil aviation ministries.
According to informed sources, the revised agreement was worked out after the FIPB and stock market regulator Securities and Exchange Board of India (SEBI) and fair trade watchdog Competition Commission of India (CCI) raised concerns about the control and management of the company after the stake-sale.
"SEBI has already cleared the deal. Our (civil aviation ministry) concerns have been resolved. Even the corporate affairs ministry was looking into the deal. We have followed all proper procedures," Ajit Singh said.
"The deal is good for the passengers and the civil aviation sector. We require a lot of foreign investment in our infrastructure side. The deal will also reaffirm investor confidence in the India (growth) story," he said.
The new agreement submitted by Jet Airways is said to have addressed the control and management issues, with Etihad agreeing to have only two board of directors from an earlier proposed four in the 10-member airline board.
Besides the finance and civil aviation ministries, the FIPB, SEBI and the Department of Industrial Policy and Promotion (DIPP) were studying the new agreement.
Earlier, on June 14, the FIPB had deferred a decision on approving the proposed stake-sale till the time Jet clarified on the issues raised by it.
–Indo-Asian News Service
