Jet-Etihad under CCI scanner for violation of section 43(a)

The Jet-Etihad deal continues to be under the scanner of regulators. Sources within the Competition Commission of India (CCI) have said that there appears to be a prima facie case of violation of section 43 (a) by Jet-Etihad, reports CNBC-TV18’s Malvika Jain.

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As far as the approval for the deal by CCI is concerned, there is no change in that regard but there is a prima facie case of violation of section 43(a) which deals with providing information to the commission before an approval is given by the commission. In this case, CCI sources have indicated that there were two issues on which show cause notices have been issued to Jet and Etihad, one is that they went ahead with this sale of Heathrow slots even before the CCI had approved the deal. Secondly, there are certain clauses within the commercial agreement which they implemented before getting CCI’s nod.

These two things are in violation of the competition act and the replies that have been received by the company seems to suggest that the Heathrow slot sale by Jet to Etihad had nothing to do with this proposed transaction of stake sale of 24 percent to Etihad. Also, the two companies have maintained that they did not implement any part of the agreement before getting CCI’s approval.

The hearing in this case is now complete and an order is expected by December end and this may mean that Jet and Etihad could be penalised to the extent of 1 percent of their total turnover or the asset value whichever is higher.