new Delhi35 minutes ago
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The case relates to the controversy over not transferring 18 crore warrants redeemable as shares to Kalanithi Maran and KAL Airways after transfer of control of the company to Ajay Singh.
- SpiceJet was caught in severe cash crisis in late 2014
- In February 2015, Ajay Singh took control of SpiceJet.
Affordable airline SpiceJet will not have to deposit an interest amount of about Rs 243 crore in the ongoing share transfer dispute with Kalanithi Maran and his company KAL Airways. The Supreme Court has stayed that order of the Delhi High Court till further order in which SpiceJet was asked to deposit this amount. Kalanithi Maran and KAL Airways are old promoters of SpiceJet.
A bench of Chief Justices SA Bovde and Justices AS Bopanna and V Ramasubramaniam also issued notice to Kalanithi Maran and his company against an appeal filed by SpiceJet and its promoter against the Delhi High Court order of 2 September. Response to notice is sought in 4 weeks. The case was heard on Friday through video conferencing.
SpiceJet was asked to deposit in 6 weeks
SpiceJet and its promoter Ajay Singh were asked to deposit Rs 243 crore as interest on an amount of Rs 579 crore. In 2017, the amount of Rs 579 crore was asked by the Delhi High Court to deposit SpiceJet in the share transfer dispute case. The High Court gave SpiceJet 6 weeks to deposit the interest amount and the deadline had expired on 14 October as per the 2 September judgment.
Maran and his company appealed to the High Court for not depositing the amount
After the expiry of the deadline and the non-payment of Rs 243 crore, Maran and his company had requested the High Court to attach Ajay Singh’s entire shareholding in SpiceJet and take control of the management. The Supreme Court accepted SpiceJet’s appeal to this and issued an interim order to stay the High Court order.
The High Court in 2016 asked the two sides to settle the dispute under arbitration.
Maran and KAL had approached the High Court in a share transfer dispute and demanded that 18 crore warrants redeemable as equity shares be transferred to them. The High Court had on 29 July 2016 asked the two sides to settle the dispute under arbitration. The High Court had asked SpiceJet and Singh to deposit Rs 579 crore in the High Court registry.
In 2017, the Supreme Court dismissed an appeal by SpiceJet against the High Court.
Spyjet was given a bank guarantee of Rs 329 crore and cash deposit of the remaining Rs 250 crore. In July 2017, the Supreme Court dismissed SpiceJet’s appeal against the High Court. On 20 July 2018, the Arbitral Tribunal rejected Maran’s claim of Rs 1,323 crore in damages for non-issuance of warrants to Maran and KAL Airways, but ordered refund of Rs 579 crore and interest. Maran then challenged the arbitration decision in the High Court.
Maran and KAL transferred 35.04 crore shares of SpiceJet to Singh for just 2 rupees.
The case is related to the controversy arising out of the issuance of warrants to Maran after SpiceJet’s transfer to Ajay Singh, the controlling shareholder of SpiceJet. In February 2015, Singh took control of the company after SpiceJet was caught in a financial crisis. Maran and KAL Airways transferred all 35.04 crore equity shares (58.46% stake of SpiceJet) in SpiceJet to Singh, the company’s co-founder, in February 2015 for just Rs 2. The company was stuck in debt and had to shut down operations for a day in December 2014 due to lack of cash.