India turns unlucky ground for UAE investments

India turns unlucky ground for UAE investments

Rs 2,058-cr Jet-Etihad deal under CBI scanner now after Emaar, Etisalat ventures UAE's telecom giant Etisalat exited India in 2012 after 2G scam ...

Rs 2,058-cr Jet-Etihad deal under CBI scanner now after Emaar, Etisalat ventures
  • UAE's telecom giant Etisalat exited India in 2012 after 2G scam
  • It lost $827 million in the Indian operations
  • Realty major Emaar Properties landed in trouble after it executed real estate projects in Hyderabad and New Delhi
  • The company which is also under CBI scanner is battling several court cases in the country now
P Madhusudhan Reddy Hyderabad: Is India an unlucky destination for investments from the United Arab Emirates (UAE)? The answer to this tricky question likely to be a profound 'yes' with another major investment deal, the Rs 2,058-cr Jet-Etihad stake sale agreement, from the Arab country coming under the Central Bureau of Investigation (CBI) scanner. Jet It was Emaar Properties, a real estate giant, which landed trouble after building convention centre, now popular as HICC, and taking up real estate projects in the city. It entered into India in 2005, but most of its investments in the city are facing hurdles as CBI is investigating into its projects here. Even the 2010 Commonwealth Games Village built by Emaar-MGF, a jointure venture of Emaar and its Indian partner MGF, landed in trouble. Similarly, efforts by Etisalast, the UAE's leading telecom operator, to enter India also ended prematurely when 2G telecom scam broke out and Supreme Court cancelled all 121 licences allocated to various telecom operators. The telecom operator had presence in India through Etisalat DB � its joint venture with India's DB Realty exited from the country in February 2012 after the apex court judgment. The Dubai-based company, which had 1.6 million customers and licences to operate in 15 circles, lost $827 million in Indian operations. Now, it is the turn of the $379-million stake sale deal between Jet Airways and Abu Dhabi-based Etihad Airways to land in similar tangle. On April 24 this year, Etihad Airways had announced its decision to buy 24 per cent stake in Jet for Rs 2,058 crore. The deal, the biggest foreign investment in India's aviation sector, run into trouble after the Foreign Investment Promotion Board (FIPB) deferred a decision on it on June 13, the, saying it needed more clarity on ownership structure post-sale. Though several political leaders including Parliamentary Standing Committee head Sitaram Yechury raised objections against the deal, Civil Aviation Minister Ajit Singh strongly defended it saying the deal would boost aviation sector in the country. However, the bone of contention is the Bilateral Air Services Agreement also signed in April by the UAE and India, which has given the Emirati airlines an additional 36,000 seats on Indian routes. With increasing opposition to deal, Prime Minister's Office (PMO) swung into action and is said to be examining the deal. In the meantime, acting a complaint by Nishikant Dubey, a BJP MP from Jharkhand, Central Vigilance Commission (CVC) has asked CBI to investigate into allegations leveled by the MP that 'four cabinet ministers had cleared bilateral deal between Indian and UAE in haste'. The MP is also said to have alleged that several amendments was made to the guidelines issued in 2008 to clear the deal. "The way, rules have been amended, it clearly showed government's intention to go overboard for clearing this deal. And only a CBI probe can unravel the truth behind it," the MP contended. According to him, the Clause 1.7 which prevents passing on of effective control of management of a domestic airline to a foreign airline has deleted. Besides, Clause 1.9 which prevents a domestic airline to enter into financial arrangement like lease-finance, hire-purchase with a foreign airline also met same fate, while Clause 1.8 was amended to facilitate the deal, he explained in the complaint. The CBI which has received the complaint is said to be scrutinizing it.
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