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Lenders of Jet Airways Scrutinize the Origin of Funds from Jalan-Kalrock Consortium for Airline Acquisition

The lenders of Jet Airways on October 4 questioned the source of Jalan-Kalrock Consortium’s (JKC) funds to take over the cash-strapped airline.

At a National Company Law Appellate Tribunal (NCLAT) hearing, Jet Airways' Committee of Creditors (CoC) claimed that JKC’s source of money is doubtful. The additional solicitor general argued that the money deposited by JKC has come from several accounts and that it could be laundered.
 
Jet Airways' lenders will file an objection to JKC's compliance application.The development comes after the Jalan-Kalrock Consortium (JKC) last week said it has paid Rs 350 crore towards the revival of the grounded airline.
 
"JKC has now fulfilled its total financial commitment of Rs 350 crore equity as per the court-approved resolution plan, and all commitments by JKC now stand fulfilled to take control of the iconic airline," the consortium said on September 29.
 
JKC's lawyer denied lenders' allegations regarding the source of their funds stating that all funds were transferred as per the resolution plan. The consortium's counsel questioned lenders' intent to transfer the ownership of the company after JKC had executed all its obligations by paying the full amount of Rs 350 crore.
 
Jalan-Kalrock invoked Rs 150 crore it had paid towards the performance bank guarantee as part of its payment. After several court appeals and deadline extensions, it deposited another Rs 100 crore in August and, as ordered by the NCLAT, paid an additional Rs 100 crore last week.
 
Even as JKC hopes to take Jet Airways back to the skies in 2024, another major hurdle could be the payment of over Rs 270 crore towards gratuity and provident fund of its former employees that was ordered by the Supreme Court.
 
The consortium has asked NCLAT to allow it to make these payments in installments of three years, four years and five years. The employee unions plan to oppose the demand and seek one-time payment in case the tribunal grants relief to JKC on this front.
 
The airline also doesn't have an Air Operator's Certificate as yet. It will need to demonstrate operational capability with the required staff and fleet to renew the AOC.

 

 

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Fabian Media is a company with interests in publishing and distribution. Established in 2013, Fabian Media delivers world-class content through various multimedia channels including print and online portal.

Babita Sharma (MD) +91-9560-264449, +91-9540-264449

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