Investor advisory firm SES has once again raised the issue of control in the Jet-Etihad deal and is once again clamouring for an open offer for Jet Airways by Etihad. This comes after the Competition Commission noted in its observation that the deal gives Etihad joint control of Jet's assets and operations. CNBC-TV18's Sajeet Manghat and Archana Shukla report.
Market regulator SEBI's response to Subramanian Swamy on the issue of control in the Jet-Etihad deal is coming back to haunt it.
SEBI, in reply to Swamy said: "SEBI would be guided by the decision take by the government or other regulatory agencies regarding change in management/control. In the event such regulatory agencies decide that Etihad would be acquiring control over Jet, consequently, they would be deemed as PAC along with the current promoter group of Jet."
And investor advisory firm SES has latched on to this response.
With the Competition Commission observing that: "The effect of these agreements including the governance structure envisaged in the CCA establishes Etihad's joint control over Jet, more particularly over the assets and operations of Jet.", SES argues that Etihad could now be classified as a Person Acting in Concert and this will have wider ramifications for the deal.
"They will have to make an open offer," JN Gupta, MD & founder, SES, Former Executive Director, SEBI said.
Now this is not the first case where CCI's observations on control differ from SEBI's stand, which is based on the takeover guidelines. But this is certainly the first case where SEBI has committed to change its order if any government or regulatory agency gives a contrary ruling. This could put the Jet-Etihad deal on course for further turbulence. After all, Jet is yet to present the revised Articles of Association to its shareholders for approval, but has gone ahead with a preferential allotment and a changed ruling by SEBI could even ground the deal.
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