FIPB okays Jet-Etihad deal with some conditions

The 12-member board would have four directors from Jet, two from Etihad and six independent directors

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The Foreign Investment Promotion Board (FIPB) on July 29 cleared the Rs 2,058-crore Jet Airways-Etihad deal with some riders, sending out a strong signal that the government was determined to be flexible in order to encourage foreign investment.

Jet Airways had submitted a modified shareholder agreement on July 25 that appeared to address all concerns raised by various ministries and stock market watchdog Sebi. The Indian authorities were concerned that the original agreement signed in April this year would result in the Abu Dhabi-based carrier acquiring effective control of India's largest airline by revenues, though it formally had only a 24% equity stake. 

"The proposal has been cleared with some conditions," said Arvind Mayaram, secretary, department of economic affairs, and chairman of the inter-ministerial body that vets foreign direct investment  proposals. The proposed investment by Etihad is the largest foreign investment in 2013. 

"There are some minor changes to be made in the language, but otherwise they (FIPB) have cleared it," Civil Aviation Minister Ajit Singh told reporters, adding that the revised proposal had addressed the concerns of Sebi and his ministry.

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