Troubled airline SpiceJet is facing mounting financial distress as it has emerged that the company has failed to deposit employees’ provident fund (PF) dues for nearly two and a half years. According to a query sent to the Employees’ Provident Fund Organisation (EPFO), the last provident fund deposit made by SpiceJet was in January 2022 for 11,581 employees. Despite notices and summons from the EPFO regarding the unpaid dues, the airline has yet to respond.
This revelation adds to the airline’s ongoing financial struggles. SpiceJet’s shares have declined by 7.6% this year, although they are up 86% compared to the same period last year. In February, reports surfaced that the airline had delayed EPFO deposits due to a shortage of funds and liquidity constraints, also resulting in delayed salaries for January.
SpiceJet is currently embroiled in litigation with various lessors, some of whom are hesitant to extend aircraft leases. On April 18, the National Company Law Tribunal (NCLT) issued a notice to the low-cost airline in response to three insolvency pleas filed by aircraft lessors, citing a total default of Rs 77 crore.
In another legal battle, KAL Airways and Kalanithi Maran have sought over Rs 1,323 crore in damages from SpiceJet and its chief, Ajay Singh, challenging a recent Delhi High Court order in the Supreme Court. The dispute dates back to February 2015, when Maran and his investment vehicle, KAL Airways, transferred their 58.46% stake in SpiceJet to Singh, who agreed to take on the airline’s liabilities of around Rs 1,500 crore.
Maran and KAL Airways allege they paid SpiceJet Rs 679 crore for issuing warrants and preference shares, which were never allotted. This led Maran to initiate arbitration proceedings against SpiceJet and Singh.
