Jet Airways insolvency: Risk assessment report throws up 'legal issue' with FSTC-Imperial bid

The Jet Airways insolvency process may have taken a pause after it emerged that a 'legal issue' has risen regarding the bid presented by the FSTC-led consortium.

Multiple sources told Moneycontrol that the legal issue cropped up after a risk assessment of the two consortiums and their bids was done by the Indian unit of Kroll, a US-based corporate investigations and risk consulting firm.

The Committee of Creditors, consisting of Jet Airways lenders including State Bank of India, is said to have mandated the report.

The information led to heated exchanges in the meeting held late evening on September 30, that was attended by lenders, resolution professional and representatives of the two bidders.

The meeting was originally called to discuss the bids presented by the FSTC-Imperial Capital combine, and the Kalrock Capital-Murari Jalan consortium. Senior executives had earlier told Moneycontrol that the meeting would have also set the ball rolling for the banks to start voting on the two bids.

"The lenders have asked lawyers representing the FSTC-Imperial consortium to respond to the legal issue raised by the Kroll report," a senior executive said.

Another executive added that the issue raised by the report related to provisions according to the Insolvency and Bankrupcty Code. "It could be something that could be cured. At present, it is too early to say if this will in any way impede the insolvency process," the senior executive quoted above added.

Two sources added that the voting could begin on October 3, but much will depend on the decision that lenders take on the new issue that has cropped up.

Messages and calls to the Ashish Chhawchharia, the resolution professional, went unanswered.

Even as one thought that the Jet Airways insolvency process was nearing its completion, there have been many developments that have yet again delayed the process.

The Committee of Creditors was initially set to meet on September 28. But a sudden offer to revise the offer by the FSTC side led to the lenders giving more time to the two suitors. A day later, an angry Kalrock-Jalan combine shot off a letter to the lenders, highlighting what it said was the "total disregard to the timelines set for final submission of the resolution plan."

The voting, to be done online, usually takes up to two weeks. But it could be hastened in the case of Jet Airways. October 21 is the deadline for the insolvency process to get completed.

The airline was grounded in April 2019, and in June it was admitted to the National Company Law Tribunal.