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Board resolutions would now be passed by asimple majority, and not by three- fourths majority proposed earlier. With the supremacy of the Jet Airways board restored, the airline will continue to have its principle place of business in Mumbai. The commercial cooperation agreement ( CCA) between the two airlines had earlier prescribed that network and revenue management functions would be shifted to Abu Dhabi after the stake sale. This had been objected to by the civil aviation ministry. The revised corporate- governance code adds all committees formed by the two airlines for administrative and operational functions will be advisory in nature. Also, the clause that said Etihad would source senior executives for Jet has been modified. Now, Etihad can only recommend senior executives for appointments in Jet. All appointments would be made by the board of Jet Airways. The corporate- governance code had given exclusive powers to the nominations committee of Jet- Etihad over the board's appointment or removal of independent directors and the chief executive officer. Sebi had objected to this, saying the nominations committee should not undermine the authority of the board. A Jet Airways spokesperson refused to comment at this stage, as other regulatory and government approvals were still required. The proposal will now be forwarded to the Cabinet Committee on Economic Affairs (CCEA), which decides on all applications for foreign direct investment of more than ₹ 1,200 crore. Once cleared by CCEA, the deal would be scrutinised by the ministry of civil aviation for compliance with provisions under the Aircraft Rules, 1937. Separately, the Competition Commission of India ( CCI) is examining the commercial cooperation agreement between the two airlines which requires Jet to exit from existing code- share arrangements with third parties on routes where Etihad or its affiliates operate. CCI is seeking aclarification, as the clause can be perceived as anti- consumer because it limits the choice for passengers. >FROM PAGE 1 |
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Company Secretary, Chennai
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