Tuesday, February 15, 2022

Maran, KAL Airways reject SpiceJet's Rs 600-cr offer to end share dispute

Chennai: In a fresh twist to the long-drawn share dispute between SpiceJet's Ajay Singh and the airline's former promoter Kalanithi Maran, Maran and his KAL Airways rejected a new settlement offer by SpiceJet in Supreme Court on Monday.

Maninder Singh, a senior advocate from Karanjawala & Co, who appeared on behalf of KAL Airways said that as per the arbitral award, Spicejet will have to pay them Rs 920 crore and the settlement offer proposed by the airline is not acceptable for his client. The court, after hearing the submissions, listed the matter for arguments on March 2. Last week, the Supreme Court had asked Maran and KAL Airways to consider the offer by Spicejet.

SpiceJet had said in a statement that it offered to pay Rs 600 crore in cash in the share transfer case with its former promoter Kalanithi Maran and his firm KAL Airways for a full and final settlement of all disputes. The airline had claimed that of the principal amount of Rs 578 crore awarded in arbitration, it had already paid Rs 308 crore in cash and deposited a bank guarantee of Rs 270 crore.

According to Karanjawala & Co, "The offer proposed by Spicejet was that the airline is willing to give Rs 300 crore towards a full and final settlement of the dispute and the matter finally gets settled with no further litigation, or; Out of the Bank Guarantee of Rs 270 crore deposited with High Court, Spicejet will give Rs 100 crore for now "

The controversy kicked off in 2015 when Maran sold his 58.46 per cent stake, or 50.4 million shares, in SpiceJet to Singh for a nominal Rs 2 after the airline was hit by financial trouble. In 2016, Maran approached the court, citing a breach of the agreement by Singh for not issuing him 189 million share warrants and preference shares, despite his Rs 679-crore infusion. He claimed Rs 1,300 crore from SpiceJet and Singh. In July 2016, the high court (HC) asked Maran and Singh to set up an arbitration tribunal.

The arbitration tribunal consisting of three retired judges from the SC - Arijit Pasayat, Hemant Laxman Gokhale, and K S P Radhakrishnan - had rejected the damages claim of Maran and KAL Airways against SpiceJet in 2018. In 2020, the HC asked the airline to submit Rs 243 crore to Maran on the issue and the airline got a stay from the SC in November 2020. Maran went before the apex court to lift the stay on a Delhi HC order.

14/02/22 Shine Jacob/Business Standard


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