INDIA BUSINESS WORLD - JUNE 2006
THE MONTH THAT WAS...

JET-SAHARA FIGHT GETS POLITICISED AND HOTTER

   THE Jet-Sahara tussle intensified further. While the court extended the freeze on the Rs 1,500-crore escrow account “till further orders”, the failed deal got more politicised.

BJP and former civil aviation minister Sharad Yadav hit out at the security clearance granted to Jet Airways chairman Naresh Goyal. On its part, the Sahara group alleged that Jet Airways' cash crunch, and not the lack of security clearance to Mr Goyal, was the real reason for the break-up.

Jet Airways challenged the jurisdiction of the Lucknow sessions court in freezing the account being maintained by ICICI Bank.

Jet's counsel Abhishek Singhvi questioned the maintainability of the Air Sahara petition, saying the case should be heard by the Bombay High Court. Sahara 's counsel Dushyant Dave countered the argument by saying that Bombay High Court has not yet taken cognisance of the petition filed by Jet on June 20.

Mr Singhvi also challenged the impleading of ICICI Bank in the case, contending that the bank was not party to the failed Rs 2,300-crore deal. After hearing both sides, district and sessions judge Shiv Charan Sharma fixed June 30 as the next date for hearing. The court said the matter would be heard on July 1 too if necessary.

On the political front, while BJP criticised the timing of the security clearance to Mr Goyal, dubbing it as ‘crony capitalism', Mr Yadav called for Jet chairman's arrest.

The former civil aviation minister said the home ministry had given ‘adverse' reports about Mr Goyal during his tenure at Rajiv Gandhi Bhavan.

BJP's criticism was aimed at the lack of security clearance till the deadline set by both parties, which was helping Jet Airways to justify scrapping of the deal. The Sahara group's attack was stepped up by Air Sahara president Alok Sharma. He alleged Jet was facing a financial crunch.

Mr Goyal had sought reduction in the transaction value due to the crunch, he told mediapersons here.

Meanwhile, Jet informed BSE that a petition had been filed –– under Section 9 of the Arbitration and Conciliation Act, 1996 ––against Sahara India Commercial Corporation Ltd (SICCL). The exchange was also informed about the case filed by SICCL at the Lucknow sessions court.

BJP criticised the timing of the security clearance given to Naresh Goyal, dubbing it as ‘crony capitalism' and hit out at the Centre. Former civil aviation minister Sharad Yadav called for arrest of the Jet chairman.