 "'CCI failed to see Jet-Etihad deal hits competition'")
Air India's former executive director, Jitender Bhargava, has appealed against the Competition Commission of India (CCI)’s clearance to the deal, arguing the latter failed to assess how it would curb competition.
CCI on Thursday sought explanations from the two carriers to ascertain whether they failed to provide information on certain commercial pacts that could raise anti-competition concerns, reports PTI.
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BJP’s Swamy’s demand
Separately, Bharatiya Janata Party Member of Parliament Subramanian Swamy, who has filed a suit against increased traffic rights to Abu Dhabi, has demanded capital market regulator, the Securities and Exchange Board of India (Sebi), consider the deal “null and void” till Etihad announces an open offer.
Last month, the Abu Dhabi-based airline concluded its investment in the Mumbai-based one after CCI clearance.
Anurag Goel, a commission member, had, however, given an opinion against the majority order. Bhargava, in his appeal to the competition appellate tribunal, has demanded the clearance be set aside, as the commission did not follow the due process. The appeal said the commission should have conducted an enquiry, as the commercial agreement between the airlines was anti-competitive.
"Further, the concerns expressed by Air India, the only airline from which CCI sought comments to the deal, have only partially been considered.The failure to conduct a complete analysis of whether the deal results in appreciable adverse effect on competition renders the unconditional approval granted by CCI in its impugned order void,'' it said.
Bhargava has also questioned the clearance claiming the commission's assessment of the market was based on “assumptions and surmises”.
"By simply assuming that all Indian passengers are generally price-sensitive (and not time-sensitive), CCI has concluded that direct and indirect flights are substitutable and on this basis completely failed to carry a separate analysis for the two relevant markets (India and Qatar). Further, CCI failed to consider the ‘market for air cargo transport’, in which the parties effectively compete.... Consequently, the unconditional approval granted by CCI is deeply flawed and the order should be set aside,'' said the appeal.
Meanwhile, Swamy has argued Jet-promoter Naresh Goyal is ceding from an absolute control to a joint control with Etihad, which Sebi has taken cognizance of by not allowing Etihad investment until the Indian promoters dilute their stakes. “This is clear of a person (Naresh Goyal) who had absolute/significant control over Jet ceding it to Etihad by several actions agreed between them and documented through the agreements that was available to Sebi but wrongly adjudicated,” he said in a letter to U K Sinha, chairman, Sebi.