Lenders of Jet Airways question source of revival infusion by JKC

Say payment not in compliance with resolution plan; consortium questions lenders' intent to transfer airline's ownership

The lenders to Jet Airways on Wednesday questioned the source of funds used by Jalan Kalrock Consortium (JKC), the successful bidder for the troubled airline, to repay a part of the Rs 350 crore dues, saying the payment was not in compliance with the resolution plan and the money could have been “laundered”.

Additional Solicitor General (ASG) N Venkatraman, representing the lenders led by State Bank of India (SBI) in the National Company Law Appellate Tribunal (NCLAT), said the source accounts from which the payments were made were questionable. “Till now they (JKC) were taking us for a ride, now they are taking this court for a ride,” the ASG said. 

JKC is led by UAE-based businessman Murari Lal Jalan and London-based Kalrock Capital.

According to the payment schedule approved by the NCLAT in August, JKC was required to pay Rs 100 crore by August 31, another 100 crore by September 30, and the rest Rs 150 crore was to be adjusted against the performance bank guarantee.

The lenders, however, said 13 crore of the 200 crore payment towards the dues came from “other sources” in contravention of the resolution plan. 

However, Senior Advocate Krishnendu Datta, appearing for JKC, said the majority part of Rs 200 crore was paid by Jalan and only a small part came from other sources. 

“We highly question the lenders’ intent to transfer the ownership of the company in favour of JKC after JKC has executed all its obligations under the court-approved resolution plan by paying the full amount of Rs 350 crore. This is in light of the latest application filed by the CoC (committee of creditors) to stay the implementation of the approved resolution plan recently in NCLT,” JKC said in a separate statement.

The lenders, while raising their concern, told the appellate tribunal that they had also moved an application against JKC in the Mumbai Bench of the National Company Law Tribunal, “questioning the source of the payment”.

The lenders also expressed apprehensions about the consortium’s foreign partner Florian Fritsch, pointing out that his properties were searched in 2022 as part of a larger fraud and money-laundering probe. 

The ASG told the NCLAT that the lenders were planning to file an objection to JKC’s compliance report.

Senior Advocate Datta, however, said now that the full payment had been made in accordance with the court orders, the transfer of shares should be initiated to aid the transfer of ownership to the consortium.  

A source said JKC might be looking to defer the payment of dues towards workmen in the airline for five years. 

The case is likely to come up again on October 12 before which the tribunal has asked the parties to file their objections/submissions. 

The lenders had also questioned how JKC could pay the Rs 7,000-odd crore due to them when it was struggling to pay Rs 350 crore. 

In the last hearing, the ASG had said that the infusion of Rs 350 crore was merely the first step towards the payment of dues. He had added that after the initial payment, three more tranches of money were to be paid to the lenders, with the final step being the transfer of equity shares.