Jet-Etihad deal gets nod with conditions

The conditions require the two companies to settle any dispute between them under Indian law instead of English common law as originally proposed. They also require obtaining prior FIPB approval for any change in the shareholding structure of the company. Several changes were hanging fire since June as government departments had sought clarifications on the deal.

The approval was stuck at the FIPB amid moves to ascertain whether Jet would retain effective control of the company,including retaining an Indian owner,and would not change its place of business.

The revised agreement says all committees formed by the two airlines for administrative and operational functions would be advisory in nature.

This includes a clause which said Etihad will source senior executives for Jet Airways. It has now been modified to read that Etihad can only recommend senior executives for appointment in Jet.

Etihad will now have two directors on the 12-member board,with Jet getting four,giving the Indian promoters more authority. Board resolutions will also be passed by simple majority. Chairman Naresh Goyal will have veto and voting powers.

After the FIPB clearance,the deal will go to the Cabinet Committee on Economic Affairs for approval as it is larger than Rs 1,200 crore.