SpiceJet, on the other hand, has moved the Supreme Court against the order
Kalanithi Maran has moved the Delhi High Court seeking attachment of SpiceJet promoter Ajay Singh's shareholding after the airline failed to deposit Rs 243 crore in favour of the Sun Group Chairman.
The high court, in its September order had asked the low-cost airline to make the deposit within six weeks. The deadline expired on October 14. The amount is essentially an interest payout of the sum Maran and his KAL Airways won as refund from an arbitration panel in 2018.
The high court has agreed to hear Maran, and has issued notice to SpiceJet on the plea seeking status quo of the shareholding.
“We approached the hon’ble High Court since Spicejet has not complied with the direction to deposit the sum of Rs 243 crore we were entitled to on account of interest on the amount awarded by the arbitration panel. We have now sought attachment of the promoter’s shares to protect our interest as advised by our counsel,” SL Narayanan, Group CFO, Sun Group, told Moneycontrol.
SpiceJet though has gone ahead and moved the Supreme Court against the high court order on the payment. Reports said the apex court may hear the airline's plea next week.
Singh and his family hold 59.93 percent in SpiceJet as on June 30. He owned around 2 percent before Maran exited the airline. At the end of trading session on October 22, Singh's stake was valued at Rs 1,727 crore.
"If the shareholding is attached, Singh won't be allowed to dilute his stake in the company," a person closely following the legal case, said.
Maran's petition has also asked the court to appoint an administrator or officer to take over the airline's management, with a direction to clear dues by "liquidating the shares of Mr Ajay Singh."
Apart from the shareholding, the petition also asks for the attachment of Singh's bank accounts, and movable and immovable properties, and that these should be sold to pay the due amount.The case
The three-year-old case centres around the bitter share transfer dispute between the two sides.
In February 2015, Maran and KAL Airways, his investment vehicle, transferred their 58.46 percent in SpiceJet, to Singh, the current Chairman and Managing Director, for Rs 2 after the airline’s operations were upended by a severe cash shortage. Singh, a co-founder of SpiceJet, took on the airline’s liabilities of around Rs 1,500 crore.
As part of the agreement, Maran and KAL Airways said they paid SpiceJet Rs 679 crore for issuing warrants and preference shares. Maran launched litigation in the Delhi High Court in 2017 against Singh and SpiceJet after he said that neither the convertible warrants and preference shares were issued nor was the money returned.
In July 2018, an arbitration panel rejected Maran’s claim of damages of Rs 1,323 crore for not issuing warrants to him and KAL Airways, but awarded him a refund of Rs 579 crore plus interest. SpiceJet was permitted to furnish a bank guarantee for Rs 329 crore and make a cash deposit for the remaining sum of Rs 250 crore.
Soon after Maran contested the ruling of the arbitration panel that had not only rejected his claim of damages but also regaining control of the airline. The Delhi High Court, in September, ruled in favour of Maran.Cash crunchThe Delhi High Court order on the deposit payment had come when SpiceJet, like the rest of its aviation peers, faces a liquidity crunch. Though airlines resumed operations in May and passenger traffic has improved, it is still over 60 percent lower than last year's numbers.
SpiceJet had reported losses of Rs 600 crore for the quarter-ending June 30. Singh had mentioned that COVID-19 was the worst crisis to hit the aviation industry.
The airline had a negative net worth of Rs 2,170 crore as on June 30. This has zoomed from Rs 1,579 crore in FY20.