SpiceJet was on Friday directed to deposit Rs 579 crore in 12 months before the Delhi High Court which asked the airline and Sun Group chief Kalanithi Maran along with his Kal Airways to appoint an arbitral tribunal to decide the share transfer dispute between them in a year.
The order came on Maran and his airline’s plea for issuing them stock warrants in SpiceJet as per a sale purchase agreement (SPA) of 2015 which led to transfer of ownership of
the budget carrier to its co-founder Ajay Singh.
Maran and his airline have alleged in their plea that despite giving around Rs 579 crore to SpiceJet, the carrier failed to issue them the warrants or allot them tranche 1 and
2 of Convertible Redeemable Preference Shares and the amount was not utilised for paying statutory dues due to which they were also facing prosecution.
Justice Manmohan Singh directed SpiceJet to deposit the amount of Rs 579 crore in a fixed deposit in the name of Registrar of the Delhi High Court for 12 months.
The amount is to be deposited in five instalments with the first one in August, the court said.
The interim order directing SpiceJet not to issue or transfer its shares to a third party will continue, the court said.
Market regulator SEBI had earlier expressed its inability to approve the board resolution passed by SpiceJet for issue of warrants in favour of Maran and his Kal Airways.
The board resolution was passed on the court’s direction. Under the SPA, Maran and Kal Airways had transferred their entire 350,428,758 equity shares (58.46 percent stake)
in the airline to Ajay Singh.
According to the SPA, Maran and Kal were to receive the redeemable warrants in return for around Rs 679 crore that they were to give to the airline towards operating costs and
debt payment, the petition has claimed.
SpiceJet had earlier told the court that the change of ownership was effected as a rehabilitative measure to address the liability of Rs 2,000 crore incurred by the airline when
it was under the management of Maran.
It had also claimed that every penny has been utilised towards operations and discharge of liabilities.