Shares of Jet Airways gained over three per cent today amid reports that market regulator Sebi has issued showcause notice to Abu Dhabi-based Etihad regarding its 24 per cent stake purchase in the carrier.
However there has been no official word on the matter.
Jet Airways scrip went up 3.42 per cent to close at Rs 223.40 on the BSE. Shares of the carrier, which opened at Rs 226.90, touched an intra-day high of Rs 230.85.
According to reports, the Securities and Exchange Board of India (Sebi) has issued a show cause notice to Etihad seeking explanation on whether it violated takeover norms while buying 24 per cent stake in Jet Airways.
The regulator is believed to have asked Etihad on why it should not be making an open offer to shareholders of Jet Airways, as per reports.
Last month, Sebi had decided to take a fresh look at the Rs 2,060 crore Jet-Etihad deal following observations made by fair trade watchdog Competition Commission.
Etihad's acquisition of a 24 per cent stake in Naresh Goyal-led Jet Airways, the first foreign direct investment (FDI) in an Indian carrier by an overseas airline, was announced in April 2013 and approved by Sebi last year.
Sources had said Sebi is looking afresh at the deal after the Competition Commission of India (CCI) made observations regarding control over Jet Airways. The CCI, while giving its green signal to the transaction in November, had said there were no anti-competitive concerns.
"It is observed that the parties have entered into a composite combination comprising inter alia the IA (Investment Agreement), SHA (Shareholder's Agreement) and the CCA (Commercial Co-operation Agreement), with the common/ultimate objective of enhancing their airline business through joint initiatives.
"The effect of these agreements, including the governance structure envisaged in the CCA, establishes Etihad's joint control over Jet, more particularly over the assets and operations of Jet," the CCI said in its order on November 12.
