Mumbai: The Enforcement Directorate has questioned some senior executives of Jet Airways in connection with foreign investment in the debt-laden airlines loyalty programme.In 2014, Jets strategic partner Etihad Airways PJSC had entered into a $150-million, or about Rs 900-crore, deal to buy 50.1 per cent stake in Jet Privilege Pvt Ltd (JPPL), the Indian airlines frequent-flyer programme.While the central agency had in the past raised queries about the deal, this was the first time it summoned its officials for a detailed questioning, an ED official said.The Jet officials were called in recently because we wanted to understand the structure of the deal so as to ascertain if its violative of the FDI norms under the provisions of the Foreign Exchange Management Act (Fema), the official said.
Their statements are now being studied and if need be we will call them again.The central agency is trying to ascertain whether Etihad received the necessary approval under the now defunct Foreign Investment and Planning Board for making the investment.Indian laws prohibit foreign investment of more than 49 per cent in most sectors, another official said.
In the present case, Etihad stake in JPPL was classified as an air transport service firma sector that allows more than 49 per cent FDI through automatic route.
The probe will ascertain if this was an arrangement struck between the two in order to get more FDI in the airline and if the said arrangement was violative of the FDI investments norms.The cash-strapped Jet Airways, which stopped all operations on April 17 due to financial distress, is being probed by multiple agencies including the corporate affairs ministry and the income-tax department for alleged irregularities.Etihad still holds 50.1 per cent in JPPL, incorporated in 2012, with Jet Airways holding the rest.