The Enforcement Directorate (ED) has begun an initial probe into Etihad Airways PJSC's (Public Joint Stock Company) investment in Jet Airways' frequent flyer programme, Jet Privilege Pvt Ltd (JPPL). The ED is probing to ascertain whether foreign direct investment (FDI) norms were violated by Etihad that took a stake in JPPL in 2014.
An ED official said, "ED is examining Etihad Airways' investment in JPPL and whether there were any violations of FDI norms in the process," further adding that the agency is also probing if Etihad secured the necessary approvals from the Foreign Investment and Planning Board (FIPB) that was abolished in 2017, for the investment, as mentioned in a report in Mint.
According to the daily, the agency had called certain Jet Airways officials for questioning to get an idea about the structure of the deal between Etihad and JPPL. The official said that previous queries raised by FIPB to both the airlines had gone unanswered.
A spokesperson for Etihad, however, said that the airline had not been contacted by the ED yet. "Etihad acquired its share in JPPL nearly six years ago in compliance with all regulatory requirements. Any queries relating to JPPL should be made directly to them," said the spokesperson.
JPPL was incorporated as a wholly-owned unit of the airline in 2012 and was split as an independent entity in 2014 after Etihad's purchase of 50.1% stake for $150 million. Jet Airways holds 49.9% stake.
ED is the third agency to look into the activities of Jet Airways and its group firms. The Ministry of Corporate Affairs is also examining the books of the airline for potential violation of the Companies Act.