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Business News/ Companies / News/  SC asks SpiceJet, Maran to settle share transfer dispute
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SC asks SpiceJet, Maran to settle share transfer dispute

Top court grants more time to SpiceJet and its former promoter to amicably settle the dispute

In February 2015, Maran had transferred his shareholding in SpiceJet to Ajay Singh, the current chairman and MD, after the airline nearly went belly-up. MintPremium
In February 2015, Maran had transferred his shareholding in SpiceJet to Ajay Singh, the current chairman and MD, after the airline nearly went belly-up. Mint

MUMBAI : The Supreme Court on Thursday asked low-cost domestic carrier Spicejet and Kalanithi Maran to amicably settle the share transfer dispute between the two.

“SpiceJet wants to settle. Their proposal is that SpiceJet has already paid 308 crore in cash and deposited a bank guarantee of 270 crores, they are willing to release another 100 crores, subject to Maran’s wish. The other option is that we hear the matter…We will suggest you discuss the settlement and come back", a Supreme Court bench comprising Chief Justice NV Ramana said.

The Supreme Court will hear the matter next on 12 April.

Last month, Maran, the former promoter of SpiceJet Ltd, had rejected a 600 crore one-time settlement offer made by the budget airline to end a protracted share transfer dispute between the two.

In February 2015, Maran had transferred his shareholding in SpiceJet to Ajay Singh, the current promoter, chairman and managing director of the airline. This was after the carrier nearly went belly-up during 2014-15 due to a severe cash crunch. Singh, who paid 2 to takeover the airline, also assumed SpiceJet’s liabilities of 1,500 crore.

As part of the agreement, Maran and Kal Airways also made payments of 679 crore to SpiceJet, under Singh, for issuing warrants and preference shares.

In 2017, however, Maran approached the Delhi high court alleging that the convertible warrants and preference shares were not issued, and nor was the money returned by the airline and Singh.

Maran and Kal Airways later approached the Supreme Court, urging it to lift the stay on a Delhi high court order asking SpiceJet to deposit 243 crore as interest on 579 crore to be payable to Maran in the dispute.

The Supreme Court stayed the Delhi high court order in November.

The Supreme Court bench today also asked the counsel of SpiceJet about another dispute between the airline and CreditSuisse. The counsel informed the court that the matter was settled.

In January, the apex court had stayed a Madras high court order directing the winding-up of SpiceJet Ltd, granting the airline the three weeks it requested to resolve its dispute with Credit Suisse AG.

The high court had directed the winding-up following a petition from the Swiss financial services company to recover dues of 180 crore.

“With regard to the dispute pending between Credit Suisse and SpiceJet Limited, we would like to inform that the parties have now reached an in-principle commercial settlement of the dispute and the process of documentation is underway," the airline said.

SpiceJet had deposited $5million on the direction of the Madras high court in and there is no adverse financial liability on the company, the airline added. The settlement involves payment of settlement amount over a mutually agreed period of time.

The settlement with Credit Suisse follows SpiceJet’s successful settlements with De Havilland Aircraft of Canada Limited (DHC), Boeing, aircraft lessors CDB Aviation and Avolon.

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ABOUT THE AUTHOR
Priyanka Gawande
Priyanka Gawande is a senior legal correspondent at Mint. She has worked as legal reporter for four years with both television and digital mediums. Based in Mumbai, she reports on disputes across sectors including banking, corporates and finance. This also includes insolvency and bankruptcy cases and intellectual property rights (IPR) litigation. Her focus also comprises tracking capital markets and disputes relating to securities law. Previously, Priyanka worked with Informist Media for 2.5 years covering major insolvency and bankruptcy cases and corporate developments. She started her career in journalism with Business Television India (BTVi) where she reported on primary markets, banking, finance and insurance companies.
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Published: 31 Mar 2022, 01:18 PM IST
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