The deal is under scanner because the ED suspects that the investment that came from Etihad could have violated Foreign Direct Investment norms
New Delhi: The Enforcement Directorate (ED) has initiated a probe into an investment done by Etihad Airways in JetPrivilege Private Limited (JPPL) back in 2014. The company operated Jet Airways’ frequent-flier programme. The deal is under scanner because the ED suspects that the investment that came from Etihad could have violated Foreign Direct Investment (FDI) norms.
The JPPL deal
According to a source aware of the development, Etihad had picked up a 51.1 percent stake in JPPL for Rs 900 crores in 2014. The ED has called the senior management of Jet Airways next week to understand the deal structure.
Another source said that the ED is also scrutinising investments made by Jet founder Naresh Goyal in various foreign airlines.
Etihad says not contacted by ED
Etihad, on its part, has said that it has not been contacted by ED. “Etihad acquired its share in JPPL nearly six years ago in compliance with all regulatory requirements. Any queries relating to JPPL should be made directly to them,” the airline said.
Not the first time
The debt-ridden airline has faced probes earlier as well. It was only recently that its offices were searched by the Income-Tax Department and discrepancies were found in its books.
The Ministry of Corporate Affairs then started scrutinising Jet’s books and found a violation of companies’ law. A report on the matter is expected to be submitted by the ministry by mid-May.