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PNB alleges gross irregularity in RP conduct, seeks stay of Kalrock-Jalan resolution plan

Jet Airways' problems aren't going away anytime soon. It's been about a year since the Kalrock Capital-Jalan group was awarded the chance to buy the financially troubled airline. It ceased operations in April 2019 as a result of the double whammy. Once the dominant player in Indian skies, Air India today faces a new reality: its jets are grounded, and its future is uncertain.

Punjab National Bank (PNB) filed a motion for a suspension of the Kalrock-Jalan plan in the Jet Airways Insolvency and Bankruptcy Code (IBC) case on Thursday, alleging gross irregularities in the conduct of the resolution professional (RP).

The National Company Law Appellate Tribunal (NCLAT) has accepted to hear PNB's case and has issued a notice of irregularities. At the next hearing, it will review the grounds for granting a stay.

At least two representatives for Jalan, a Dubai-based entrepreneur (Kalrock Capital is a London-based asset management firm), have spent the previous several days in Mumbai speaking with Jet Airways personnel.

The case will be heard by the NCLAT on 21 September 2021.

The RP lowered PNB's debt by the value of the shares invoked because PNB had invoked their share commitment before the IBC. In the IBC procedure, PNB has stated that they want the shares as well as their whole debt.

According to a company insider, "They also spoke to the resolution professional in an attempt to mitigate the PNB crisis," The PNB claim is that they used the share pledge in front of the IBC. According to official media, the resolution professional is believed to have decreased the bank's debt by the value of its shares.

PNB now wants its shares as well as its debt. This is in relation to an Rs. 2,050 crore loan taken out by the bank in March of this year. With the value of stock in an IBC plan falling to zero, the benefit to PNB could be insignificant. By any measure, the consortium faces numerous obstacles before gaining control of the airline. With no clarity on parking spaces, a problem that will inevitably arise, it will be a long road for an airline hoping to reclaim some of its former grandeur.

Jet Airways plans to restart flights in the first quarter of 2022. According to insiders, the majority of the hiring has occurred in the engineering and maintenance departments, but the airline has also hired senior officials and mid-management executives.

According to insiders, the airline wants to hire at least 1,000 people in the first phase of its rebirth. The search for a new CEO is still ongoing, and the airline has shortlisted applicants from India and beyond, according to sources.

The National Company Law Tribunal approved the airline's resolution plan, provided by Kalrock-Jalan Consortium, on 22 June and the airline was ordered to negotiate with government authorities for the slots at domestic airports.


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