India's National Company Law Tribunal (NCLT) has given the committee of creditors (CoC) until November 1, 2023, to file their response to an affidavit submitted by the Jalan-Kalrock Consortium (JKC) clarifying the source of a INR2 billion Indian rupees (USD24 million) payment connected to their attempted acquisition of Jet Airways (Mumbai International).

After multiple delays, JKC has recently paid INR3.5 billion (USD42 million) to settle creditor and lender claims, per a mid-2022 NCLT-approved resolution plan that, at the time, had the support of the State Bank of India-led CoC. However, relations between the CoC and JKC have since deteriorated into a series of legal disputes.

N. Venkataraman, appearing for the CoC at the NCLT on October 10, raised concerns about the source of INR2 billion. “The payment is not compliant with the resolution plan as it mandates that the money is to be paid through JKC," he said. However, counsel for JKC said only part of the sum came from outside sources, with the majority coming from Murari Lal Jalan, a UAE-based businessman and chairman of the Agio Image Group who is one of two parties making up the Jalan-Kalrock Consortium. JKC's counsel said the CoC's objections were a bid to delay or prevent the Jet Airways ownership transfer.

Separately, the NCLT instructed the Jet Airways resolution professional, Grant Thornton partner Ashish Chhawchharia, to clarify the eligibility of JKC to takeover the defunct carrier given the second party making up the consortium, Florian Fritsch, is under investigation in Europe for fraud and money laundering offences.

India's bankruptcy and insolvency codes prevent anyone convicted of fraud-related offences, either in India or outside the country, from buying an insolvent entity during the resolution process. The European investigation has reportedly heightened CoC concerns about funding sources and the probity of Jet Airway's would-be new owners. ch-aviation does not say the allegations are true, only that they are made, and an investigation is ongoing.

In the absence of any convictions, Chhawchharia has reportedly informally advised the CoC that the consortium is eligible to proceed with the carrier's takeover and has already submitted an affidavit to the tribunal to that effect.