A fresh row has brewed up in the Rs 2060 cr Jet Etihad deal controversy with reported intervention by the Indian Ambassador to Abu Dhabi Seetharaman writing to the Finance Ministry asking for fast forwarding the deal which is stuck under litigation between SEBI and COMPAT over alleged passing of larger control of the Indian venture to Etihad.
"The latest in the series (of the Government going overboard to facilitate the Jet Etihad deal) is this intervention of Indian ambassador to UAE. Why must he interveneIJ His assertion that the deal is beneficial to both countries is erroneous. ….As a petitioner before COMPAT challenging CCI's permission to the deal, I can aver that if information furnished in various documents is analysed, one would realise the extent of incorrect information given out to seek approval of various agencies," said the petitioner against the deal Jitendra Bhargava and former Executive Director of Air India told The Pioneer. Attempts to talk to Minister for Civil Aviation Ajit Singh by The Pioneer did not elicit any reponse.
The move from a Indian diplomat has raised eyebrows in the industry circles and comes at a time when the Jet-Etihad deal is scheduled to be heard next week by COMPAT. The petition was filed by Bhargava against the CCI's contention that the deal was not in any way detrimental to Indian air passengers or was against competition rules. He was later joined in by the APAI in the petition in the COMPAT.
In addition to this, last month, capital markets regulator SEBI had issued a show cause notice to Etihad asking it to prove that it had not violated the takeover code while acquiring the 24 per cent stake in the Goyal promoted Jet Airways. And if so then Jet would have to make a public offer. EarlierThe CCI majority order, passed by its chairman Ashok Chawla and four members, has said the Jet-Etihad combination is not likely to have appreciable adverse effect on competition. However, one CCI member, in his dissenting order, had observed that the deal could adversely affect competition in the international air travel market.
The deal is also under the scanner as and has been alleged of doling out of a largesse involving 37,000 additional seats each to both sides on the India-Abu Dhabi sector. Abu Dhabi is an important West Asia hub for international airlines. Bhargava further said:" government agencies have been going overboard in according approval without fully inderstanding the implications. All decision making agencies ought to have viewed the proposal strictly from national perspective rather than act as per political powers who have clearly compromised national interests."
In November 2013, CCI had passed the Abu Dhabi-based Etihad's acquisition of a 24 per cent stake in Naresh Goyal-led Jet Airways even as the Commission had said the transaction does not raise concerns of adverse competition issues.