Jet Airways case: Lenders question source of JKC's Rs 200 crore before NCLAT

Jet Airways

Lenders of the grounded airline Jet Airways on October 4 told the National Company Law Appellate (NCLAT) that the compliance by Jalan Kalrock Consortium (JKC) in depositing Rs 200 crore does not align with the resolution plan.

According to the lenders, JKC was supposed to make the entire payment through the consortium, however the money was deposited from other sources as well. Additional Solicitor General Venkatraman, who appeared for the lenders told the NCLAT that they have apprehensions about the source of such funds, furthermore alleging that the money could have been laundered. As per the lenders, there are apprehensions about the consortium's foreign partner Florian Fritsch after his properties were raided in 2022 as part of a broader investigation into suspected fraud and money laundering. The ASG told the court that the lenders intend to file an objection to JKC's compliance report.

Appearing for JKC, senior advocate Krishnendu Dutta, argued that the lenders are objecting to JKC's every move as they do not intend to transfer the ownership of the airline to them. Dutta also expressed that JKC was shocked that such an apprehension was raised.  Dutta further argued that only a part of the money came from other source while majority of the amount was paid by Murari Lal Jalan.

The NCLAT on hearing the parties directed the lenders to file their objections by the next date of hearing and posted the case for further consideration to October 12.

On September 29, JKC in a press statement said that they have completed the additional infusion of Rs 100 crores to revive the now-defunct carrier.

With this infusion, JKC has fulfilled its total financial commitment of Rs 350 crore ($42.1 million) equity as per the court-approved resolution plan, and all commitments by JKC now stand fulfilled to take control of the iconic airline, the press statement issued by the airlines said.

On August 28, NCLAT permitted the consortium to pay Rs 200 crore by September 30 and permitted the adjustment of an existing bank guarantee towards Rs. 150 crore.

Earlier in August, the lenders told NCLAT that they may choose not to pursue the appeal against the transfer of the airline's ownership to Jalan Kalrock Consortium if it pays Rs 350 crore towards fulfilling condition precedents.

In May 2023, the National Company Law Appellate Tribunal (NCLAT) granted Jalan Kalrock Consortium, which emerged as a successful bidder to take over Jet Airways, more time to make payments to the State Bank of India (SBI).

While the National Company Law Tribunal (NCLT) approved the transfer to Jalan Kalrock in January, the decision was challenged in NCLAT, which ruled in favour of the consortium on March 3, 2023.

Hence, Jalan Kalrock was entitled to exclude November 16, 2022, to March 3, 2023 period, during which the ownership hearing was on, to comply with the payment deadline.

On January 13, NCLT allowed the transfer of the beleaguered airline to the consortium led by London-based Kalrock Capital and UAE-based entrepreneur Murari Lal Jalan.

The lenders approached the NCLAT, opposing the ownership transfer, saying the consortium had not fulfilled its obligations.

Jet Airways was grounded in April 2019 over growing losses and a debt of about Rs 8,000 crore. In October 2020, the airline's Committee of Creditors (CoC) approved the revival plan submitted by the Jalan-Kalrock consortium.