rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » CCI slaps Rs 1 cr fine on Etihad in Jet Airways deal

CCI slaps Rs 1 cr fine on Etihad in Jet Airways deal

December 19, 2013 20:24 IST

The Competition Commission on Thursday imposed Rs 1 crore fine on Abu Dhabi-based Etihad for non-disclosure of full information in the course of seeking approval for its purchase of 24 per cent stake in Jet Airways.

The Rs 2,060 crore (Rs 20.60 billion) deal has been facing turbulence ever since it was announced in April. Earlier today, the Competition Appellate Tribunal (COMPAT) issued notices to the Competition Commission of India (CCI) and Jet on a plea challenging the competition watchdog's clearance.

The penalty would not have any impact on the approval for the deal given by CCI last month. The competition regulator said it kept the quantum of fine low at Rs 1 crore (Rs 10 million) after Jet and Etihad contended that they were unaware of the requirement for certain disclosures.

Dissenting with majority view, CCI member Anurag Goel in a separate order said the fine should be Rs 10 crore (Rs 100 million).

The CCI fine of Rs 1 crore relates to pacts entered into between the two carriers on February 26 for sale of three landing/take-off slots of Jet at London Heathrow Airport to Etihad (LHR transaction). It also includes the lease of the same slots back to Jet.

Keeping in view the facts and circumstances, the Commission said it was imposing a penalty of Rs 1 crore on Etihad, which according to the regulator had the obligation to give notice to it regarding the deal.

Etihad is required to pay the fine within 60 days. The regulator said the parties made disclosure of all the agreements entered into between them, including LHR transaction and CCA (Commercial Cooperation Agreement).

Noting that it is apparent that there was no effort by the parties to conceal the transactions, the CCI observed that contention of the parties is that they were under an impression that LHR was an independent transaction.

"This contention has not found favour with this Commission but the fact remains that the party was under an impression, though wrongly, that LHR transaction was an independent transaction and the party consummated LHR transaction," the order said.

The airlines sought CCI nod for the Rs 2,060-crore deal on May 1. 

© Copyright 2014 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.