SpiceJet Asked To Deposit Rs 250 Crore By August 31 In Share Transfer Row

The Delhi High Court on Monday dismissed SpiceJet Ltd.’s plea against its order in a share transfer dispute with the airline’s previous owner Kalanithi Maran and asked it to deposit Rs 250 crore in cash with the court by August 31.

The two-judge bench of justices S Ravindra Bhat and Yogesh Khanna also asked the budget carrier to deposit Rs 229 crore in bank guarantees by July 31. In its order uploaded on the Supreme Court website later in the day, the bank guarantee was amended to Rs 329 crore.

The judgement comes on a petition by SpiceJet and its co-founder Ajay Singh challenging the court’s earlier order, directing the budget carrier to deposit Rs 579 crore in the share transfer dispute with previous owner Kalanithi Maran.

The SpiceJet stock fell more than 10 percent immediately after the order but recovered thereafter to trade about 2 percent lower on the BSE.

The high court had in May reserved its decision on pleas by the airline and Singh challenging the order which came on a civil suit by Sun Group chief Kalanithi Maran and his KAL Airways in July last year. In their suit, Maran and his airline had sought issuance of stock warrants in SpiceJet to them as per a sale purchase agreement (SPA) of 2015 which led to transfer of ownership of the budget carrier to Singh.

Maran and his airline had alleged that despite giving Rs 579 crore to SpiceJet, the carrier had failed to issue them the warrants or allot tranche 1 and 2 of convertible redeemable preference shares, and that the amount was not utilised for paying statutory dues due to which they were also facing prosecution.

Apart from ordering deposition of the amount, the court had also asked SpiceJet and Maran to appoint an arbitral tribunal to decide the share transfer dispute between them in a year.

The Securities and Exchange Board of India had earlier expressed its inability before the court to approve the board resolution passed by SpiceJet for issue of warrants in favour of Maran and his KAL Airways. The board resolution was then 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, Maran had said in his plea.

With inputs from PTI