SpiceJet, Ajay Singh move HC against order to deposit Rs 579 cr

Maran and his airline had alleged that despite giving Rs 579 crore to SpiceJet, the carrier had failed to issue them the warrants

Budget carrier SpiceJet and its owner Ajay Singh have moved the Delhi High Court against its single judge's order directing the airline to deposit Rs 579 crore within 12 months in connection with a share transfer dispute with the previous airline owner Kalanithi Maran.

The single judge's order had come on a plea of the Sun Group chief Kalanithi Maran, along with his Kal Airways, for issuance of stock warrants in SpiceJet to them according to a sale purchase agreement (SPA) of 2015 which led to transfer of ownership of the budget carrier to its co-founder Ajay Singh.

A bench of Justices Pradeep Nandrajog and Jayant Nath, before which the matter was listed on Friday, merely ordered that the pleas of SpiceJet and Ajay Singh be taken up by the appropriate bench on August 8.

Maran and his airline had alleged before the single judge 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 in the court, Justice Manmohan Singh had also asked Spicejet and Maran to appoint an arbitral tribunal to decide the share transfer dispute between them in a year.

The amount was to be deposited in five instalments with the first one in August this year, the court had said.

The Security and Exchange Board of India had earlier expressed its inability before the single judge 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 per cent 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 579 crore that they were to give to the airline towards operating costs and debt payment, Maran had said in his plea.

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 had been utilised towards operations and discharge of liabilities.