This is the interest amount payable on Rs 579 crore, which the HC had in 2017 asked the low-cost airline to deposit in the share transfer dispute with Maran.
The Delhi High Court on Monday directed SpiceJet to deposit around Rs 243 crore within six weeks towards interest in connection with a share-transfer dispute with its former promoter Kalanithi Maran. This is the interest amount payable on Rs 579 crore, which the HC had in 2017 asked the low-cost airline to deposit in the share transfer dispute with Maran.
Accepting the claim of Maran and his firm KAL Airways for grant of, up to date, post-award interest of Rs 243 crore within six weeks, Justice Rekha Palli said, “in the event the amount is not deposited by judgment debtor (SpiceJet and promoter Ajay Singh) within the time granted, the decree holder (Kalanithi Maran and his firm KAL Airways) shall be at liberty to revive their prayer seeking directions to the JDs to maintain status quo with respect to their shareholding,” of SpiceJet and Singh.
Maran and KAL had moved the Delhi HC over a share transfer dispute with SpiceJet, demanding that 18 crore warrants, redeemable as equity shares, be transferred to them. The HC on July 29, 2016, had asked both parties to settle the share transfer dispute under arbitration. It had directed SpiceJet and Ajay Singh to deposit Rs 579 crore in the HC’s registry. While SpiceJet was permitted by the HC to furnish a bank guarantee for Rs 329 crore and make a cash deposit of the remaining sum of Rs 250 crore, the SC in July 2017 had dismissed SpiceJet’s appeal against the HC order.
On July 20, 2018, the arbitral tribunal had rejected Maran’s claim of damages of Rs 1,323 crore for not issuing warrants to him and KAL Airways, but had awarded him a refund of Rs 579 crore plus interest. Maran, who owns Chennai-based Sun TV Network, then moved the HC against the arbitration award that had not only rejected his claim of damages but also regaining control of the airline.
The case relates to a dispute arising out of non-issuance of warrants in favour of Maran, after transfer of ownership to Singh, the controlling shareholder of SpiceJet. The dispute started after Singh took back control of the airline in February 2015 amid financial crisis. Maran and his KAL Airways had transferred their entire 350.4 million equity shares in SpiceJet, amounting to a 58.46% stake in the airline, to its co-founder Ajay Singh in February 2015 for just Rs 2. The airline’s total debt at the time of acquisition was over Rs 1,400 crore. The budget carrier was forced to shut operations for a day in December 2014 due to a severe cash crunch.
Maran and his airline company had alleged that despite giving Rs 579 crore to SpiceJet, the carrier had failed to issue them the warrants or allot tranche one and two of convertible redeemable preference shares and that the amount was not utilised for paying statutory dues due to which they were also facing prosecution.
Under the deal, Maran and KAL were to receive the redeemable warrants in return for the Rs 700 crore they spent on SpiceJet towards operating costs and debt payment. Maran had wanted the warrants to be issued in terms of an application made to BSE on September 18, 2014, and which had been approved by company’s board on September 24, 2014.
However, SpiceJet argued that it approached Sebi with a request to issue warrants to Maran, which was rejected on the grounds that promoters of the company had changed.