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Jet-Sahara deal heads for court

The govt failed to take a decision on giving Jet Airways chairman Naresh Goyal the security clearance needed to join the Air Sahara board.

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MUMBAI/NEW DELHI: It’s all over bar the suing. On Wednesday, the Jet Airways-Air Sahara merger deal crumbled under the weight of its own contradictions.

Official reason: The government failed to take a decision on giving Jet Airways chairman Naresh Goyal the security clearance needed to join the Air Sahara board. Unofficial reason: Goyal wanted out anyway.

Since the deal requires Jet to have all approvals — including five nominees on Sahara’s board against the current four — in place by June 21, lack of security clearance puts the deal in technical default.

It allows Goyal, who is now balking at paying the Rs2,300 crore he agreed in a January 19 deal, to wriggle out of it.

DNA had reported on Saturday that the deal could come undone. But disentanglement will not be clean, what with two cases being filed.

The bones of contention are clear: the deal price and control of the advance money of Rs500 crore. Before moving court, Sahara said it would not renegotiate the price of Rs2,300 crore but was willing to give Goyal more time (15 days) to get his clearances, or even allow him to run the airline with his four nominees.

But with Jet declining to accept an extended deadline, Sahara will run the airline on its own from midnight of June 21. Sahara got a Lucknow court to restrain Jet from operating an escrow account with ICICI Bank, which holds the advance payment of Rs500 crore.

Jet moved the Bombay high court for arbitration and sought a direction to stop Air Sahara and its directors from withdrawing the Rs500 crore transferred by it into the account.

Jet Airways stock moved up 5.1 per cent to Rs705.70 on news about the collapse of the deal on Wednesday, but with the matter winding its way through court punters may have celebrated too soon.

With inputs from Agencies

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