The finance ministry’s Enforcement Directorate (ED) has started an inquisition in Etihad’s investment in Jet Privilege Pvt. Ltd (JPPL). JPPL conducts Jet Airways’ frequent flyer program. The debt-laden Jet Airways is grounded since 18th April 2019 due to cash crunch
The formation of JPPL was after the alliance between Etihad and Jet Airways in 2014. Etihad Airways bought 50.1% in the Jet Airways and 49.9% stakes are with Jet. Further, the Enforcement Directorate (ED) is investigating any breach of foreign direct investment (FDI) norms during the investment. Moreover, they are ascertaining, that at the time of investing did Etihad sought the necessary approvals from the former Foreign Investment and Planning Board (FIPB) or not. In May 2017, India exterminated FIPB. Jet Airways is purported of not seeking necessary approvals from the Reserve Bank of India (RBI) and the government in order to receive foreign funds. All foreign investment beyond 49% needs approval.
In order to understand the deal between Etihad and JPPL, Jet Airways officials will be inquired by the agency.
Furthermore, Jet Airways is not getting alleged by the authorities for the first time. Earlier, the income tax department raided Jet in September 2018. The department found out tax evasion of over ₹600 crores. There were some suspicious transactions regarding a Dubai-based entity. Jet Airways had paid Excessive commissions were paid to the same firm. This followed by the ministry of corporate affairs (MCA) probing into Jet Airways. MCA examined its books and disclosures to verify the breaching of the Companies Act. Jet Airways and its group firms are getting questioned for the third time regarding their activities.
With this new probing of ED, a never-ending saga of problems continues for Jet Airways.