SEBI puts onus for Jet-Etihad deal on FIPB, DEA

The Securities and Exchange Board of India (SEBI) has asked the finance ministry, the department of economic affairs (DEA) and the Foreign Investment Promotion Board (FIPB) to decide on any change in the clause on management and control in the Jet Airways-Etihad Airways deal.

The market regulator has stated that if Etihad was taken as a person acting in concert with Jet chairman Naresh Goyal then the deal was not compliant with the provisions of the takeover code and therefore, no preferential allotment would be possible, reports CNBC-TV18 citing sources.

In cognisance of SEBI's views, a revised form of the shareholding agreement between Jet Airways and Etihad is currently being drafted.

Sources indicate that the Jet and Etihad managements are prepared to finalise all the details and possibly submit the agreement to the regulatory authorities by the end of this week or early next week. The revised deal is to be submitted before the FIPB by 29 July.

Sources also add that currently Etihad is not keen on an open offer and expects the closure of the deal to be delayed. The airline's management is open to an overhaul of the structure of the agreement if the deal is delayed beyond a couple of months.

 Etihad is also open to giving up voting rights, allow Jet chairman Naresh Goyal the requisite rights, provide Jet a majority presence in the nomination committee and is prepared to follow the regulation of making the nomination committee a sub-committee of the board.

With respect to the issue of control, the Etihad chairman and other executives have stated that they are unclear on the exact definition of control and seek more clarity from the regulatory authorities.