Gulf carrier Etihad Airways, which holds 24% stake in Jet Airways, has decided not to reinvest in the airline due to unresolved issues concerning liabilities. The low-cost airline closed
operations on April 17 and is undergoing insolvency proceedings.
In a statement, Etihad said it declined to lodge an Expression of Interest (EoI) to reinvest in Jet Airways because of unresolved issues concerning the airline's liabilities.
The deadline for submission of EoIs was August 10.
While noting that it was "neither feasible for, nor responsible of Etihad to reinvest in Jet Airways at this time, Etihad asserted that the decision does not affect its commitment to India.
Etihad flies between Abu Dhabi and 10 destinations in India, and is continually increasing the frequency of its flights, the size of its aircraft, the quality of its product and the international route connections it offers beyond its hub in Abu Dhabi, the statement said.
Volcan draws back
Earlier, the Economic Times reported that Indian billionaire Anil Agarwal’s family trust, Volcan Investments, had emerged as a possible contender for debt-laden Jet Airways, but in a later edition the paper quoted a statement by Mr Agarwal saying that: "the EoI for Jet Airways by Volcan was exploratory in nature. On further evaluation and considering other priorities, we intend to not pursue this further."
It had submitted an EoI for Jet as it wanted to understand the business scenario for the company and the industry, the statement added.
Agarwal's decision leaves just two financial investors, Panama-based investment firm Avantulo Group, and Russian fund Treasury RA Creator, as entities to submit EoIs for Jet Airways, according to a media report. The two EoIs will be reviewed by resolution professional (RP) Ashish Chhawchharia to ascertain their eligibility.
In a related development, the Economic Times quoted sources as saying that the Serious Fraud Investigation Office (SFIO) last week questioned Rajesh Chaturvedi, a close aide of Jet founder Naresh Goyal. Chaturvedi has been an auditor to Jet Airways since 2003, and a long-time advisor to Goyal.
Transaction irregularities detected
Chaturvedi faced SFIO questions over Jet’s books and various business deals, especially the 2007 buyout of Air Sahara, sources said. The investigation wing of the Income Tax department, which has allegedly found irregularities in transactions between Jet Airways and its Dubai-based group companies, also questioned Chaturvedi, sources said.
As CargoForwarder Global reported earlier, India's Ministry of Corporate Affairs (MCA) directed SFIO in July to probe the affairs of Jet Airways and its group companies - Jet Lite (India) Ltd, Airjet Training Services Ltd, Airjet Security & Allied Services Ltd, Airjet Ground Services Ltd, Airjet Engineering Services, and Jet Privilege Private Ltd.
The probe came after a critical inspection report, which said that the airline was, “prima facie, indulging into malpractices, mis-management through siphoning/ writing-off/diversion of funds and other financial irregularities, including but not limited to, preferential/ related party transaction, prejudicial to the public interest.”
Nol van Fenema