Aviation News

Delhi HC summons SpiceJet MD Ajay Singh again, Infra News, ET Infra


The Delhi High Court on Friday asked SpiceJet’s Chairman and Managing Director Ajay Singh to be present before it on January 10 to ascertain how he will make payments as per the arbitration award that former promoter Kalanithi Maran and his KAL Airways won in 2018.

The summoning order against Singh was passed for the second time in the last three months, the earlier being in August.

In its fresh application, the low-cost airline asked the HC not take any further steps towards execution of the award until a proper determination of the correct rate of interest was made.

While asking the court to determine the correct outstanding amounts payable to Maran, Spicejet also sought permission to discharge such outstanding amount by the issuance of fresh equity shares of equivalent value in SpiceJet to Maran.

“…in June 2023, a proposal for issuance of shares in lieu of payment of money was mooted by SL Narayanan, the Group CFO of the Sun Group of Companies (associated with the Decreeholders under the Award herein) who had conveyed a note in writing that the issuance of shares could be an acceptable mode of settling the issue,” the airline stated in its application.

Maran, however, rejected this offer. Maran’s senior counsel Maninder Singh argued that the airline had to pay Rs 440 crore towards interest arising out of dues from an arbitral award. He said the airline had made a payment of Rs 100 crore in September and no made further payments have been made.

Senior counsel Amit Sibal, who appeared for SpiceJet, disputed the amount payable to Maran, saying only Rs 194 crore is due against Rs 440 crore as claimed by Maran. While offering equity shares in lieu of the amount due, the senior counsel said that the airline is facing severe cash crunch and is even unable to pay for rising fuel cost and salaries to its 10,000 staff. Spicejet also said that pushing the company to pay in cash would be detrimental to everyone and if its vendors don’t get paid, they will drag it into insolvency. Maran, who is just an unsecured creditor, would not then get anything and even its 10,000 work force would suffer, he addedOn July 31, the HC had upheld the arbitral award that had asked SpiceJet and Singh to pay Rs 579 crore with interest to Maran in a seven-year-old share transfer dispute.. The appeal against this is pending before a division bench of the HC.

  • Published On Nov 21, 2023 at 08:29 AM IST

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis.

Get updates on your preferred social platform

Follow us for the latest news, insider access to events and more.


Source link