NOW, SPICEJET DENIES MARAN’S ALLEGATIONS OF DEAL BREACH
MUMBAI: Ajay Singh-led SpiceJet Ltd on Tuesday denied breaching a share purchase agreement with the airline’s former owner Kalanithi Maran and his firm KAL Airways. SpiceJet said that it had repeatedly tried to get approval from regulators to issue warrants to Maran and KAL.
According to a July 11 report in The Economic Times, Maran has sought ₹2,000 crore in compensation from Singh and the airline for allegedly causing losses by failing to honour the agreement. Maran’s claim was based on losses incurred because of SpiceJet’s alleged failure to issue convertible warrants and preference shares to him and his KAL Airways in exchange for the ₹690 crore injected in the then ailing airline, the report said, citing unnamed people.
They said if compensation was not forthcoming, Maran would seek to annul the agreement signed when SpiceJet’s ownership changed hands in 2015.
A SpiceJet spokesperson said in an emailed statement that the low-cost carrier had approached Sebi and BSE on at least two occasions for approval to issue warrants to Maran in return for the money he infused in the firm.
A Sun group spokesperson declined to comment. BSE decline to comment. An e-mail sent to Sebi remained unanswered. Its spokesperson did not respond to calls.
The ₹350 crore which SpiceJet received from Maran and KAL Airways was used to pay off statutory liabilities (such as income and service taxes) which had accrued when these entities were in the latter’s control, the spokesperson said. This amount was to be returned by SpiceJet to Maran after 8 years or warrants were to be issued subject to the approval of regulatory authorities.
BSE and Sebi denied approval, the spokesperson added.
A person familiar with the matter said approvals were denied as they (Sebi and BSE) went by the nature of the allotment. “The warrants were to be given to the promoters to benefit the company. Secondly, it had to be done through the validity of the board resolution which lapsed. Also, it was to be given to the existing promoter and not to a third party, which Maran had become after selling his stake.”