FIPB clears Jet deal, with riders

Now, CCEA to decide the course of the deal

The Foreign Investment Promotion Board on Monday approved the ` 2,050- crore FDI deal between Jet Airways and Abu Dhabi- based Etihad Airways subject to certain conditions. Any disputes on the shareholders’ agreement and commercial cooperation agreement will now be adjudicated under Indian law and not English law.

“We approved ( JetEtihad) deal) with some conditions,” economic affairs secretary Arvind Mayaram said. Jet Airways assured the Indian authorities that “substantial ownership and effective control” of the airline will stay with the Jet management.

It will now be placed before the Cabinet Committee on Investment and Cabinet Committee on Economic Affairs for final approval.

In order to win FIPB approval, Jet and Etihad agreed to address concerns raised at the previous FIPB meeting by reducing the number of Etihad representatives on the 12- member Jet Airways board from three to two. The “place of business” — where key decisions are taken — will remain Mumbai, and not Abu Dhabi.

The Union government’s foreign investment promotion board ( FIPB) on Monday gave the necessary approval needed for the ` 2,050 crore FDI deal between private carrier Jet Airways and Abu Dhabibased UAE national carrier Etihad Airways subject to certain conditionalities. Any disputes pertaining to the shareholders agreement and commercial cooperation agreement in the deal will now be adjudicated under Indian law and not English law.

“We have approved ( the Jet- Etihad deal) with some conditions,” the finance ministry’s economic affairs secretary Arvind Mayaram said. Jet Airways has also assured Indian authorities that the Substantial Ownership and Effective Control ( SOEC) of the airline after the deal will remain with the Jet Airways management. Etihad is acquiring 24 per- cent stake in Jet Airways as per the FDI deal.

The deal is now expected to be placed before both the Cabinet Committee on Investment ( CCI) and the Cabinet Committee on Economic Affairs ( CCEA) for final approval. In order to win approval from the FIPB, Jet and Etihad had recently agreed to address the concerns raised in the previous FIPB meeting.