Etihad’s 24% stake in Indian carrier is being challenged in the Indian Supreme Court
The Indian Supreme Court has been asked to investigate the controversial sale of 24 percent of Jet Airways to Abu Dhabi’s Etihad Airways, amid allegations of corruption and abuse of power by government officials who approved the deal.
The airlines are still waiting for final regulatory approval after signing a memorandum of understanding on April 24 stating Etihad would purchase a 24 percent stake in the Indian low cost carrier, as well as invest in new aircraft and take over Jet’s landing/takeoff rights at Heathrow Airport under a buy and lease back arrangement.
But Bharatiya Janata Party (BJP) leader Subramanian Swamy, a staunch supporter of free markets and author of the blueprint that opened India’s economy in 1991, has called for government approval of the deal to be quashed.
In a petition filed in the Supreme Court on Tuesday, Swamy and supporters also called for a corruption inquiry into government officials involved, alleging they approved the purchase “in haste”.
The petition describes approval of the deal as “arbitrary, irrational and mala fide”.
“The petitioner challenges such arbitrary, irrational and mala fide act of grant of largesse in the form of bilateral/MoU dated April 24, and by way of the present petition seeks an investigation under the supervision of this Court into the matters of national and public interest," the petition says, according to Indian news wire PTI.
"The actions of the authorities, from the execution of the bilateral, to the unprecedented haste in order to assist the realisation of wrongful gains by the facilitator are writ large with acts of collusion and abuse of position.”
The deal, worth about $320m, is the first foreign investment in India’s aviation history after a ban was lifted in September last year and has been controversial.
Two senior executives at Jet Airways have resigned in recent months, including the CEO and a vice president.
Etihad has been blamed for pushing out the men, as well as reassigning at least two other top level employees, as part of a management shake-up before it takes possession of its stake.
The airline declined to comment when contacted by Arabian Business on Monday.
A decision by the Supreme Court has been adjourned.