The Naresh Goyal-promoted Jet Airways will shortly submit a reworked proposal to the Foreign Investment Promotion Board (FIPB), which will include the changes made in its share purchase agreement with Abu Dhabi-based Etihad Airways reflecting that effective control is in the Indian entity?s hands.

Sources in the know of the developments said that the airline will also submit an explanation detailing why it will have an office in Abu Dhabi for network planning and how it does not mean a shift in the airline?s place of business.

Last week the FIPB deferred a decision on Jet?s proposal wherein Etihad Airways would pick up a 24% stake in it for R2,058 crore on grounds of lack of clarity as to who would wield ?effective control? in the company. According to the proposal submitted by Jet, it seemed that Etihad would have joint control over the company with its minority stake of 24%. Concerns were also expressed by the inter-ministerial body over Jet transferring some business operations to Abu Dhabi.

?Jet Airways are yet to get a formal communication from the FIPB,? said a person aware of the development. ?However, the airline is ready with the reworked agreement that eliminates all clauses that seemed to give control to Etihad.?

?As regards the network and planning operations being handled out of Abu Dhabi, it will be incorrect to say that the ?place of business? is being shifted out of India,? the person added. ?Jet Airways plans to use Abu Dhabi has a hub for its international traffic flying to North America and west of India. For this purpose an additional network and planning office will be based out of Abu Dhabi to make optimal use of the hub.?

Jet Airways declined to comment while Etihad?s spokesperson was not available for comment.

The original proposal with the original share purchase agreement submitted to the FIPB had clauses that were inferred as giving equal control to Etihad over Jet?s operations. This was despite Etihad purchasing a minority stake of 24%.

Originally, Etihad had the right to nominate one independent member to the nomination committee of the Jet Airways board, along with having one member present on the committee.

The nomination committee has five members and oversees the functioning of the board of directors apart from nominating independent directors. As per the reworked agreement, Etihad will only have a member on the nomination committee, Jet will have one member, and the three independent members will be nominated by Jet Airways.

Further, an Etihad nominee was also required to be present for the quorum required for Jet?s board meetings and annual general meetings. This would have meant that without Etihad?s presence, Jet Airways would not have been independently able to take decisions regarding share transactions, entering new business areas and management appointments.

The reworked agreement has removed this clause and the board of Jet Airways would only be required to consult Etihad?s nominees on the board before taking any decision.

The Abu Dhabi-based airline also had a right to appoint the vice-chairman, which has been revoked.

Etihad was also given the right to terminate the commercial agreement between the two airlines unilaterally. This has been changed and the right of termination is now bilateral.

?The changed clauses have diluted the rights of Etihad which seemed to give control to them. As per the reworked agreement, the rights of Etihad are not much more than a ?public? shareholder,? said the person quoted above.

Initial objections on the aspect of control being exercised by Etihad with a minority holding was raised by the Securities and Exchange Board of India (Sebi), after which Jet deferred putting to vote a new articles of association based on the original share purchase agreement at an extraordinary general meeting on May 24.

?The share purchase agreement has already been reworked and submitted to Sebi,? said the person quoted above.

On Tuesday, Jet?s shares closed almost flat at Rs 478.25 on the BSE.