Jet Airways lenders question Jalan-Kalrock Consortium’s fund source

New Delhi: The lenders of bankrupt airline Jet Airways, led by the State Bank of India, on Wednesday questioned the source of the fund used by Jalan-Kalrock Consortium (JKC) for repayment of ₹350 crore.

During a hearing in the National Company Law Appellate Tribunal (NCLAT) on the transfer of ownership of the airline, the lenders said they have filed a new application in the NCLT Mumbai concerning the source of the money paid to them by JKC. They claimed that the money they received had come from unknown sources, and JKC did not disclose the source of the funds. The lenders said as per the resolution plan, the money should come from JKC and from legitimate sources.

The NCLAT had asked lenders to file their apprehensions in the form of a reply before the next day of the hearing. The tribunal is scheduled to next hear the matter on 12 October.

JKC said they had paid the ₹350 crore to the lenders and they must now initiate the process of allotment of shares and complete the transfer of ownership of the airline.

The JKC had completed the transfer of money to the lenders as per the NCLAT instruction. According to the payment schedules approved by the NCLAT on August 28, JKC was required to pay ₹200 crore to the lenders. The NCLAT had instructed them to pay the due amount of ₹350 crore to the lenders by 30 September, with 150 crores to be encashed from the performance bank guarantee.

On 5 July, the Committee of Creditors had told the Supreme Court that it might be more prudent to wind up the airline, given they have not been repaid, and no funds infused into the debt-laden airline. Lenders have infused approximately ₹400 crore of public money into the airline, which includes settling airport dues.

According to the January order by the Mumbai bench of the tribunal, the effective date of the resolution plan was taken as 16 November. As a result, the consortium has six months from the said date to make payments to lenders.

On 22 June 2021, the NCLT in its order approved the resolution plan for Jet Airways submitted by the Jalan-Kalrock consortium. The consortium comprises UAE-based non-resident Indian Murari Lal Jalan, who will hold shares in Jet Airways in his personal capacity, and Florian Fritsch who will hold shares through his investment holding company Kalrock Capital Partners Ltd, Cayman.

Jet Airways stopped flying in April 2019 after running into financial difficulties. However, ownership transfer has been hanging fire amid continuing differences between the lenders and the consortium.