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Last Updated : Jul 25, 2013 09:26 AM IST | Source: CNBC-TV18

Jet-Etihad: Sebi tosses management restructuring at FIPB

CNBC-TV18's Sidharth Zarabi reports that as far as the Sebi is concerned, if Etihad is taken as a person acting in concert with Naresh Goyal, then the deal is not compliant with the provisions of the takeover code and therefore, no preferential allotment will be possible.


The Securities and Exchange Board of India has now left it to the Finance Ministry, the Department of Economic Affairs (DEA) and the Foreign Investment Promotion Board (FIPB) to take a call on the issue of whether there will be a change in management and control in the Jet-Etihad deal.


CNBC-TV18's Sidharth Zarabi reports that as far as the Sebi is concerned, if Etihad is taken as a person acting in concert with Naresh Goyal, then the deal is not compliant with the provisions of the takeover code and therefore, no preferential allotment will be possible.


Sebi has said that it is upto the government to conclude if there is a change in management or control and it will reexamine its views based on the government view. Reexamination would obviously take into account change in control in terms of the takeover code.


The Sebi has crucially said that some of the rights proposed to be acquired by Etihad need to be modified and unless modified, these rights attract the takeover code with respect to change in control.

This will then lead to issues like nomination committee, two-third majority on the board, foreign nationals issue, etc. It would also draw comments on the commercial cooperation agreement, which is at the cornerstone apart from the shareholder agreement between Jet and the Etihad for that deal that cannot be done at this point of time.


The DEA has sought replies from Jet and Etihad and has served them a second reminder and there will be a tentative listing of the matter on July 29.  But if the takeover code was to be taken, then Sebi would accordingly reexamine its views. This then raises a big question mark as far as the deal is concerned and whether indeed Etihad would want to even consider the option of an open offer.

The Sebi view is the most crucial view in this regard to help the government formulate its final stance on this controversial and long-delayed deal.



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First Published on Jul 24, 2013 02:41 pm
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