Markets: Eerie calm

Markets: Eerie calm

it is not clear when market sentiment can change; as in the past, it can be quite sudden.
At a turn and yet not

At a turn and yet not

RBI could be tempted to cut policy rate to support growth at its bi-monthly review.

Rs 1 crore fine slapped on Etihad Airways in Jet Airways Rs 2,060 crore deal by CCI

Dec 19 2013, 21:10 IST
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Jet Airways and Etihad Airways contended that they were unaware of the requirement for certain disclosures. Reuters Jet Airways and Etihad Airways contended that they were unaware of the requirement for certain disclosures. Reuters
SummaryIndia punishes Etihad Airways for failing to adhere to rules in Jet Airways deal.

The Competition Commission of India (CCI) today imposed Rs 1 crore fine on Abu Dhabi-based Etihad Airways for non-disclosure of full information in the course of seeking approval for its purchase of 24 per cent stake in Naresh Goyal's Jet Airways.

The Rs 2,060 crore deal has been facing turbulence ever since it was announced in April. Earlier today, the Competition Appellate Tribunal (COMPAT) issued notices to the the Competition Commission of India (CCI) and Jet Airways on a plea challenging the competition watchdog's clearance.

The penalty would not have any impact on the approval for the deal given by CCI last month. The competition regulator said it kept the quantum of fine low at Rs 1 crore after Jet Airways and Etihad Airways contended that they were unaware of the requirement for certain disclosures.

Dissenting with majority view, CCI member Anurag Goel in a separate order said the fine should be Rs 10 crore.

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The CCI fine of Rs 1 crore relates to pacts entered into between the two carriers on February 26 for sale of three landing/take-off slots of Jet Airways at London Heathrow Airport to Etihad Airways (LHR transaction). It also includes the lease of the same slots back to Jet Airways.

Keeping in view the facts and circumstances, the Commission said it was imposing a penalty of Rs 1 crore on Etihad Airways, which according to the regulator had the obligation to give notice to it regarding the deal.

Etihad Airways is required to pay the fine within 60 days.

The regulator said the parties made disclosure of all the agreements entered into between them, including LHR transaction and CCA (Commercial Cooperation Agreement).

Noting that it is apparent that there was no effort by the parties to conceal the transactions, the CCI observed that contention of the parties is that they were under an impression that LHR was an independent transaction.

"This contention has not found favour with this Commission but the fact remains that the party was under an impression, though wrongly, that LHR transaction was an independent transaction and the party consummated LHR transaction," the order said.

The airlines sought CCI nod for the Rs 2,060-crore deal on May 1.

The parties approached the Commission pursuant to an an Investment Agreement (IA), a Shareholder's Agreement (SHA) and a Commercial Co-operation Agreement (CCA). These were executed on April 24.

Under the Competition

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