Government defers FDI proposals of Jet Airways, MCX

The government has deferred approval to foreign direct investment proposal of Jet Airways involving preferential allotment of 24 per cent of equity shares to Gulf-based airline Etihad.

The government also deferred Mumbai-based commodity exchange MCX's FDI proposal, even as the Foreign Investment Promotion Board (FIPB), which met on 14 June, cleared FDI proposals worth about Rs1,311.54 crore. (See: FIPB defers decision on Jet-Etihad deal)

The government deferred approval to the proposal in which the foreign airline proposed to subsequently transfer the equity stake to its wholly owned subsidiary, amidst a raging controversy over the way in which the Rs2,058-crore Jet-Etihad deal was pushed through.

Meanwhile, Jet Airways chief Naresh Goyal today met finance minister P Chidambaram in connection with the stake sale deal with Abu Dhabi-based Etihad Airways.

Goyal, however, did not speak to mediapersons on the purpose of his visit.

His meeting with the finance minister comes in the backdrop of criticism by opposition parties, including the BJP, CPI and the Trinamool Congress, to the sale of 24 per cent of Jet's equity to Etihad, saying it was not in the national interests.

Goyal, who owns 51 per cent stake in Jet, is also reported to be losing control over management of the airline as Etihad seeks more boardroom space.

The FIPB is reported to have rejected the proposal of MCX as the commodity exchange was seeking post facto approval for FDI received before issuance of the government guidelines for overseas investment in commodity exchanges.

The government had, in a press note issued in 2008, detailed the guidelines for foreign investment in commodity exchanges.

Besides the MCX proposal, the government rejected five other proposals.

MCX, the country's leading commodity bourse, largely trades in non-agricultural commodities futures mainly due to government ban.

The exchange accounts for a major share of the total turnover of the commodity futures market in the country.