Security check

New Delhi, June 5: The home ministry has cleared Jet Airways’ takeover of Sahara Airlines. It permitted four Jet directors to join the board of Sahara . The security clearance was crucial to the takeover, finalised earlier this year, seeing the light of the day.

Jet directors Saroj Dutta, Vijay Kelkar, Javed Akhtar and Victoriano P. daCunha will join the Sahara board once the director-general of civil aviation gives its permission.

Jet is likely to run Sahara as a wholly-owned subsidiary for some more time before merging it with itself. Sahara’s new name is likely to be TransJet.

The first step towards merger of Jet Airlines and Air Sahara was cleared in end-March when the civil aviation ministry’s aircraft acquisition committee came out with guidelines that allowed transfer of one airline’s aircraft, route rights, parking slots and bays to another.

The ministry delayed clearing the Rs 2,300-crore buy-out in the absence of clear norms on these issues.

There were conflicting points of view on whether flying rights, routes, parking slots, which are scarce commodities, could be transferred without payment of a fee to the government.

Meanwhile, once the formal approval of a high court is obtained, the actual merger would be affected, sources said. A MRTPC case filed against Jet will come up for final hearing next month.

Several Left MPs and individuals have written to the Prime Minister seeking inquiry into the stock market operations prior to the deal as well as violation of the monopoly laws.

These had been sent on to the MRTPC and to the DCA. Officials, however, say the decision is likely to be in Jet's favour as they point out that Section 31 of the MRTP ACT contains provisions for investigation of monopolistic behaviour and restrictive trade practices, while Section 2 (I) defines monopolistic trade practices.

They added that abuse of monopoly position was an offence and pointed out that any monopolistic behaviour was yet to emerge.

“The mere creation of a monopoly is as yet not illegal.”

Jet had in January, after months of speculation, taken over Air Sahara for a reported Rs 2,300 crore and announced that the two airlines would be merged after formal regulatory approvals are taken.

Ten Jet officials have been working for the past two months with their Air Sahara counterparts to help them streamline sales, ticketing and several managerial issues, they said.