A day after the Supreme Court directed Jalan-Kalrock consortium (JKC), the owners of Jet Airways, to deposit a further Rs 150 crore into an escrow account, two directors of the grounded carrier have resigned citing ‘risk to individual position’ if they have continued on the board.
Rajesh Prasad, non-executive director and Gautam Acharya, whole-time director resigned just a day before their tenure came to an end last week and was on a three-month extension.
Both the former directors said that only a limited number of non-compliances were corrected by the company in the past six months and that the process of rectifying other non-compliance issues was hamstrung partly due to the ‘myriad of litigations’ against and by the company.
“Until such matters (litigations) are definitively and conclusively adjudicated and there is clarity on the way forward for the company, I personally do not anticipate there being a significant requirement for a director. What is more, being a director of a listed entity with multiple counts of non-compliance puts my own individual position at risk,” Acharya and Prasad said in their resignation letters.
“While I appreciate my directorship is of a limited nature, should any adverse findings apropos the company arise, I will be required to offer elaborate explanations and trying to convince regulators of the nuances of a limited scope directorship is something I would not like to invite upon myself,” they added.
Founded by fraud-accused Naresh Goyal, Jet Airways will complete five years this year in the corporate insolvency resolution process (CIRP) which started in June, 2019. Last week, the apex court warned JKC that failure to deposit Rs 150 crore by January 31, 2024, will mean that the consortium is not in compliance with the terms of the resolution plan for reviving the airline.
When asked if the company would be making the payment and if the latest order could lead JKC to revaluate options of taking over Jet Airways or not, the consortium said that they are yet to receive the order.
“We are still awaiting the written order from the hon’ble Supreme Court of India. It’s yet to be released by the court. We can share our comments for sure once we have the written order,” said a spokesperson of JKC.
Lenders of the grounded airline in October last year objected to the source of JKC’s funds at the National Company Law Appellate Tribunal (NCLAT).
The committee of creditors, led by the State Bank of India, which had previously sought liquidation of the airline as the CIRP proved to be unfruitful, had submitted a plea to the National Company Law Tribunal (NCLT) inquiring into the origin of Rs 200 crore that was to be deposited then.
In August last year, JKC announced a fund infusion of Rs 100 crore in the beleaguered airline taking the total to Rs 250 crore. In the same month earlier, the lenders told the NCLAT that they may not pursue an appeal against the transfer of the airline’s ownership to JKC if it pays Rs 350 crore.
JKC hoped to take control of Jet Airways for a fraction of the total debt the airline owes to its lenders. While the total claim by the creditors is nearly Rs 8,000 crore, JKC had proposed to pay Rs 475 crore to all stakeholders, including financial creditors.
