Lenders to Jet Airways Ltd have raised concerns about their investment, seeking clarity on the investor, Florian Fritsch, amidst ongoing fraud investigations by European authorities. The matter was presented before the Supreme Court, where senior lawyer Harish Salve, representing the lenders, called for an official affidavit from the Jalan-Kalrock Consortium (JKC) to confirm the status of Florian Fritsch’s investigations.
Salve expressed worries over the banks’ funds being locked in the process, especially while Florian Fritsch, the promoter of Kalrock Capital, made deposits totaling ₹200 crore in two installments. In response, senior counsel Mukul Rohatgi, representing JKC, defended the consortium’s position, emphasizing that they had already deposited ₹350 crore.
Amid these concerns, the lenders requested the consolidation of all pending matters related to the case in the Supreme Court for a joint hearing. Conversely, JKC requested a separate hearing for this specific petition. As a result, the court, accommodating both parties’ requests, deferred the hearing to October 12.
Florian Fritsch, Jet Airways’ investor, has come under scrutiny for fraud and money laundering by authorities in a small principality located between Austria and Switzerland. Reports suggest that luxury watches and cars were seized during the investigation, linked to Fritsch’s investment in the revival of Jet Airways.
This latest development follows allegations made during proceedings at the National Company Law Appellate Tribunal (NCLAT) on October 4, where lenders raised questions about the source of funds deposited by JKC. The lenders filed a new application before the Mumbai NCLT bench, asserting that JKC had not disclosed the origin of the funds, despite the resolution plan stipulating that funds should come from legitimate sources.
Earlier, on September 29, JKC had claimed to fulfill its financial commitment of ₹350 crore, emphasizing its determination to resume the airline’s operations in 2024. The funds were transferred to the lenders as per NCLAT instructions, with JKC required to pay ₹200 crore and the remaining ₹150 crore to be encashed from the performance bank guarantee.
This is not the first instance of lenders raising concerns about JKC’s proposal. On July 5, the committee of creditors had suggested to the Supreme Court that winding up the airline might be a more prudent option, as no repayment had been made, and no funds had been infused into the debt-laden airline. Lenders had previously injected approximately ₹400 crore of public money into Jet Airways, which included settling airport dues.
According to a January order by the Mumbai bench of the tribunal, the effective date of the resolution plan was set as November 16. Consequently, the consortium had a six-month window from that date to make payments to the lenders.
On June 22, 2021, the National Company Law Tribunal (NCLT) had approved the resolution plan submitted by the Jalan-Kalrock consortium, consisting of UAE-based non-resident Indian Murari Lal Jalan and Florian Fritsch, who holds shares through his investment holding company, Kalrock Capital Partners Ltd, Cayman.