FIPB defers decision on Jet-Etihad deal
14 June 2013
The Foreign Investment Promotion Board (FIPB) has deferred a decision on the Rs2,058-crore sale of a 24-per cent stake by Jet Airways to Gulf carrier Etihad Airways and sought more details on the ''effective control'' and ownership of the Indian carrier post sale.
Arvind Mayaram, secretary, department of economic affairs, said the board has sought more details on "effective control" and ownership of the Indian carrier before approving the deal.
The FIPB decision follows intervention by capital market regulator SEBI and fair trade watchdog CCI demanding more clarity on the Jet-Etihad deal.
While the CCI said it had to ensure overall competition in the aviation market is not affected and consumers are protected, SEBI sought more clarity on the ownership structure in the interests of public shareholders.
The Foreign Investment Promotion Board (FIPB) on Friday deferred its decision on the Rs2,058 crore Jet-Etihad deal, the largest foreign investment in the Indian aviation sector.
Once the FIPB clears the stake sale, the deal would need approval from the cabinet committee on economic affairs CCEA, clearance as the deal size exceeds Rs1,200 crore.
Abu Dhabi-based Etihad had in April agreed to acquire a 24 per cent stake in Jet Airways for $370 million (around Rs2,058 crore), gaining a bigger foothold in the big Indian market.
Jet-Etihad deal comes in the backdrop of the government allowing foreign carriers to invest in Indian carriers in an effort to attract foreign investment into the country.