Capital markets watchdog Sebi has written to the Foreign Investment Promotion Board (FIPB) expressing concern that control of Jet Airways, India’s largest private airline by revenues, could pass into foreign hands because of the manner in which its 2,000-crore deal with Etihad Airways has been structured. Sebi’s communication could queer the pitch for the biggest foreign investment in India’s aviation industry after the sector was opened up to foreign carriers last year.
“Sebi has given its views on effective control. It has raised concerns on the issue of control being passed into the hands of the acquirer,” said a senior government official privy to the development.
The regulator has also told Jet and Etihad that the right to appoint board members should be proportionate to shareholding and that the foreign investor should not enjoy powers such as the right to appoint a vice-chairman and automatic representation on the audit committee, according to people familiar with Sebi’s thinking on the matter.
Full report here Economic Times