SpiceJet has not paid 11,581 employees’ provident fund dues for two and a half years: Report

Cash-strapped airline SpiceJet has not deposited Employees' Provident Fund contributions of its 11,581 staff for the last two and a half years, according to the Employees Provident Fund Organisation's (EPFO) response to CNBC-TV18's RTI query.

The EPFO confirmed that the airline had not deposited its provident fund dues since January 2022, according to the report.

"The last deposition period of PF contribution by the establishment is for the wage period January 2022 in respect of 11,581 employees," the EPFO said in response to the RTI query, as per the report.

The provident fund organisation also stated that they issued notices and summons under Section 7A of the EPF and MP Act 1952 against the airline for not depositing its contributions.

The incident highlights the airline's need for funds. Mint reported earlier about the airline's plans to raise ₹2,250 crore to reduce its debts and payments.

In an earlier response to CNBC-TV18, SpiceJet said the company had been clearing dues with a few months' lag.

CNBC-TV18 got the response when it found out that SpiceJet owed PF dues since December 2021, but the brand discredited the information then.

In its response, SpiceJet denied the information and said, "This information is again wrong and misleading. We have cleared the dues of our employees and are regularly depositing PF which has a lag of a few months."

The EPFO warned companies in March 2024 about penalties that they have to pay in case of non-compliance in PF deposits. The corporates may have to pay 25 per cent more, for a default of more than six months.

The cash-strapped airline is going through turbulent times thanks to the legal wrangles over multiple non-compliances.

SpiceJet has not yet responded to the latest PF deposit delay issue, stated CNBC-TV18.

Despite the litigation issues, the airline has plans to expand its network including connecting Ayodhya and Lakshwadeep, according to its CEO Ajay Singh, who announced this in the 39th annual general meeting of the airline in January 2024.

SpiceJet stated in its January AGM that the company aims to raise ₹2,250 crore in two segments of ₹1,591.5 crore by June 2024 and ₹650 crore by July 2025.