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Banks ask Naresh Goyal to step down as chairman of Jet Airways: Here's what experts have to say

Updated : March 20, 2019 09:17 PM IST

In a bid to revive the debt-laden carrier, the lenders led by the SBI will ask Jet Airways founder and chairman Naresh Goyal to step down from the airline with immediate effect, said sources familiar with the matter.

To protect the interest of consumers and creditors, the lenders are looking for a change in the management, sources said.

"Banks want Goyal to bring his stake down to 10 percent, below the 17 percent envisaged in the bank-led provisional resolution plan (BLPRP)," sources told CNBC-TV18, requesting anonymity. The lenders may infuse Rs 1,500 crore and they also want Jet Airways to be run by a ‘professional’, the sources added.

Goyal currently holds a 51 percent stake in Jet Airways.

With Jet flying just about a third of its fleet, defaulting on interest payments and delaying salaries to pilot, Kumar met finance minister Arun Jaitley along with aviation secretary Pradip Singh Kharola and Nripendra Misra, principal secretary to Prime Minister.

Kumar said the meeting was to appraise the government, which is an important stakeholder, about the happenings.

The man currently in the cockpit,  Rajnish Kumar, SBI chairman met with finance minister Arun Jaitley at north block. Speaking post that meeting, Kumar said “all hope is not lost", adding that lenders are still in talks with Etihad. Kumar also added that he hasn't received any directions from the government.

In an interview to CNBC-TV18, Sanat Kaul, former joint secretary of aviation; Dhiraj Mathur, partner, PWC; Kapil Kaul, CEO - South Asia, Capa and HP Ranina, corporate lawyer, discussed the crisis at Jet Airways.

On the possibility of change in management, Ranina said, “If Goyal voluntarily stepping down so that the question of his removal does not arise. They (lenders) are trying to tell Goyal that if you want us to bail out your airline, then these are the conditions.”

If Goyal, however, does not voluntarily step down, Ranina said the lenders will take legal recourse and maybe go to the National Company Law Tribunal (NCLT).

Kapil Kaul said that Goyal does not have other option.

“Timing is critical and I am surprised that it is taking too long for that decision. The banks need to decide which of the two promoters is strategic to the turnaround,” he said.
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