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Nishikant Dubey, the Bharatiya Janata Party member of Parliament who has been questioning the stake sale arrangement between Jet Airways and West Asian carrier Etihad Airways, has written to the government, asking it to reconsider the deal.
This has come after the capital markets regulator, Securities and Exchange Board of India, wrote to the ministry of finance on its concerns regarding the shift of management control to the foreign airline after the allotment of shares.
In a letter to Prime Minister Manmohan Singh and Finance Minister P Chidambaram, the MP has asked the government to re-examine the stake sale arrangement to ascertain whether Etihad Airways meets the definition of a “person acting in concert” with Jet Airways. Sebi had told the finance ministry if the West Asian carrier was considered to be acting so, the deal would violate the provisions of India’s takeover code.
The combined shareholding of Jet and Etihad would cross the non-public shareholding limit of 75 per cent and no preferential allotment would be possible. Dubey’s letter reiterates Sebi’s concerns.
The $379 million-stake sale deal has seen a number of politicians expressing concern over the shift of management control in the Indian carrier going into foreign hands. The Jet-Etihad deal is the biggest foreign direct investment in the domestic aviation sector since the government liberalised the rules last September. It is to come for clearance before the Foreign Investment Promotion Board on Monday.
