SpiceJet Says Progress Made In Clearing PF Dues After Reports Of Delhi Police Case
SpiceJet is alleged to have withheld 12% of employees' salaries for PF contributions from June 2022 to July 2024 but failed to transfer these amounts to the their PF accounts.
Budget airline SpiceJet on Saturday said the company has cleared all pending salary and GST dues and has made "significant progress" by depositing ten months of provident fund dues of employees, following the recent fundraise.
The response came after news agency IANS reported the Economic Offence Wing of the Delhi Police has filed a case against its SpiceJet Managing Director and other top officials for cheating and criminal conspiracy by failing to remit its share of PF of more than Rs 65.7 crore.
"Within the first week of raising fresh funds through the Qualified Institutional Placement (QIP), the airline has cleared all pending salary and GST dues and has made significant progress by depositing ten months of PF dues, and the process of clearing other outstanding dues is ongoing," a SpiceJet spokesperson said.
In addition, the company has successfully reached settlements with multiple lessors and remains on track with the financial and operational plan outlined in its QIP strategy, the spokesperson said.
The FIR, filed on the complaint of Employees’ Provident Fund Organisation in Delhi, names Ajay Singh, Shiwani Singh (Director), Anurag Bhargava (Independent Director), Ajay Chhotelal Aggarwal and Manoj Kumar, according to IANS.
According to the complaint, SpiceJet, which employs more than 10,000 workers, withheld 12% of employees' salaries for PF contributions from June 2022 to July 2024 but failed to transfer these amounts to the their PF accounts within the mandated 15-day period, in violation of rules.
SpiceJet had been delaying salary payments due to a liquidity crunch. However, after raising Rs 3,000 crore through a qualified institutional placement, the airline began settling pending dues. The QIP attracted interest from marquee investors like Societe Generale-ODI, Goldman Sachs (Singapore) Pte-ODI, Nomura Singapore Ltd. ODI, and Discovery Global Opportunity (Mauritius).
The low-cost carrier has cleared salary dues totalling Rs 120 crore for its employees over the past four months. The airline had settled outstanding wages for July, August, and the remaining June salaries for partially paid employees, PTI had reported citing sources, on Sept. 26.
In addition to clearing salaries, SpiceJet also resolved a financial dispute with Engine Lease Finance Corp. regarding a $16.7 million (approximately Rs 140 crore) claim. The amicable settlement, announced on Sept. 24, will lead to the withdrawal of all ongoing litigation.
Amid ongoing financial challenges and the global grounding of Boeing 737 MAX aircraft, SpiceJet's fleet has decreased from 74 aircraft in 2019 to 28 in 2024. However, in a recent interview with NDTV Profit, Ajay Singh confirmed that the airline is fully funded to expand its operational fleet to 100 aircraft by the end of 2026.
