Having cleared Rs 2,060-crore deal between Jet Airways and Etihad Airways, fair trade watchdog CCI is seeking explanations from the two carriers to ascertain whether they failed to provide information on certain commercial pacts that could raise anti-competition concerns.
The deal, involving Abu Dhabi carrier Etihad Airways' purchase of 24 per cent stake in Naresh Goyal-led Jet Airways, was approved last month by the Competition Commission of India (CCI).
Meanwhile, this clearance has been challenged in the Competition Appellate Tribunal (Compat) by national carrier Air India's former Executive Director Jitendra Bhargava, while BJP leader Subramanian Swamy has written to capital market regulator Sebi asking Etihad to be considered a 'person acting in concert' with Jet's current promoters for this deal.
While Bhargava's appeal was yet to be listed for hearing by the Compat, CCI Chairman Ashok Chawla today said that the two carriers have been issued show-cause notices on a separate issue relating to their certain commercial agreements.
While clearing the deal with majority vote, the CCI on November 12 had said in its order that the clearance would have no bearing on proceedings for possible penal action for non-furnishing of information by the parties.
"The majority has already approved the merger but on whether some things happened before they filed the application, which could be a possible area for penalty being imposed, that we have issued a show cause notice," Chawla said.
The notice was issued few days back and one hearing has already taken place.
"We have heard the parties... A decision will be taken by the Commission on whether those aspects on which there were commercial agreements before they came to the Commission whether those were integral parts of the proposal which should have come to the Commission or not.
"(If) they were and were prematurely handled, then there is a provision in the law and then we see what happens on that," Chawla told reporters here on the sidelines of Delhi Economics Conclave.
According to a Commission official, seeking explanation from the carriers may not have any impact on the clearance to the deal.
Meanwhile, Bhargava has filed an appeal against the CCI approval saying the proposed combination would have adverse effect on competition in India.
Bhargava has also contended that CCI failed to conduct a detailed inquiry into the deal.
The CCI majority order, passed by Ashok Chawla and four members, said that the proposed combination is not likely to have appreciable adverse effect on competition.