New Delhi, Dec. 19: The Competition Commission of India (CCI) today imposed a penalty of Rs 1 crore on Etihad for “consummating parts of a deal without the approval of the CCI”, its spokesperson said.
Etihad recently concluded a deal to buy a 24 per cent stake in Jet Airways. The CCI spokesperson said the penalty was imposed under section 43 of the competition act.
The CCI fine of Rs 1 crore relates to pacts signed by the two carriers on February 26 for the sale of Jet’s landing slots at London’s Heathrow airport to Etihad for $70 million and leasing it back to the Indian airline ahead of the stake deal.
The commission said it was imposing a penalty on Etihad, which, according to the regulator, had the obligation to give notice to it regarding the Heathrow pact. Etihad is required to pay the fine within 60 days.
The CCI said it kept the amount low at Rs 1 crore after Jet and Etihad contended that they were unaware of the requirement to make certain disclosures.
The regulator said the parties did disclose all the agreements entered into between them, including the Heathrow deal. However, they did not take approval for the deal.
“This contention (by Etihad) has not found favour with this commission, but the fact remains that the party was under an impression, though wrongly, that the LHR (London Heathrow airport) transaction was an independent one and the party consummated it,” the order said.
The penalty would not have any impact on the approval for the deal given by the CCI last month.
Meanwhile, the Competition Appellate Tribunal has given a notice to the CCI on an appeal challenging the clearance given to the Rs 2,060 crore Jet-Etihad deal. The appeal was filed by Air India’s former executive director Jitendra Bhargava challenging the CCI’s approval.
Bhargava has contended that the CCI failed to effectively carry out a competition assessment about the adverse effect on and “placed all passengers and indeed the entire airline industry into a grave risk of suffering irreparable damage and permanently eliminating competition”.