Aviation ministry questions SpiceJet board inclusion of Wilbur Ross and Ranjeet Nabha
10 Sep 2008
New Delhi: Low cost carrier SpiceJet's woes seem to be far from over. The airline, which saw Wilbur Ross & Company investing $80 million along with investment bank Goldman Sachs's $20 million, will now have to answer questions from the ministry of civil aviation about its plans to include Wilbur Ross on its board.
The civil aviation ministry, which feels that the number of foreigners on the airline's board would exceed the permissible limit, has questioned SpiceJet's plan to include Ross and Ranjeet Nabha, the India representative of the US investor's firm Wilbur Ross, on the SpiceJet board.
Ministry officials say that the nine-member board of the budget airline already has four foreign nationals, which is why another two cannot be a part of the board. Civil Aviation requirements issued as part of the Aircraft Rules stipulate that Indian citizens need to make up two-thirds of the directors on board of domestic airlines. Additionally, the chairman must be an Indian citizen, and substantial ownership along with effective control should be vested in the hands of Indian nationals.
SpiceJet, on the other hand, claims that it has only two foreign nationals on its seven member board. The airline says that Osman Qureshi and Khaled Mohammad Ali Al Kamda, both foreign nationals, are no longer board members. The airline says that this was intimated to the Bombay Stock Exchange (BSE) on 29 August, though the intimation of cessation of both Quershi and Kamda on the board is yet to be submitted to Ministry of Civil Aviation.
The ministry counters, saying that according to information it has, both Qureshi and Kamda are still on the airline's board. According to regulations, an approval from the government, including security clearance from the home ministry, is need each time an airline reconstitutes its board.
