Suspicion over JKC's funding casts shadow on Jet revival

The Jalan Kalrock consortium's (JKC) source of funds to acquire Jet Airways (India) Ltd has become the latest flashpoint in the airline's tortured path to recovery. 

- Anu Sharma, Shayan Ghosh & Mihir Mishra

While JKC blames lenders for delaying decisions, bankers say the consortium has been seeking extensions and not offering a clear revival plan more than two years after making the winning bid for the grounded airline.

Banks are unsure how JKC has sourced funds for the acquisition, a banker from one of Jet's lenders said, especially since Kalrock's promoter Florian Fritsch is being investigated in Europe for suspected fraud and money laundering. On 4 October, lenders approached the National Company Law Tribunal (NCLT), demanding to know the source of JKC's money.

"JKC is telling us there is no concern following the raids, but we are well within our rights to ask for a fresh clarification owing to the seriousness of the matter," the banker said on condition of anonymity.

If JKC is unable to provide clarity on the issue and fails to follow the Supreme Court (SC) order on paying employee dues, lenders should take the last step of liquidating the airline, he suggested.

JKC includes Dubai-based Murari Lal Jalan and the UK's Kalrock Capital, while the committee of creditors (CoC) is led by State Bank of India (SBI), the country's biggest lender. About Il banks, including nine Indian lenders, lent money to Jet.

According to an executive working with JKC, the airline's monitoring committee has not met in a long time, and there is no decision yet on retaining its aircraft for future operations. The lenders have still not issued equity to JKC despite making payments, the person said.