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SpiceJet is seeking a refund from a former promoter

2024-05-23

In accordance with the Delhi High Court's ruling on May 17, SpiceJet would request a refund of Rs 4.50 billion from the Rs 7.30 billion it had previously paid to erstwhile founder Kalanithi Maran and his company, KAL Airways. The airline announced that it has paid KAL Airways and Maran a total of Rs 7.30 billion, which consists of Rs 1.50 billion in interest and Rs 5.80 billion in principal.

The conflict between SpiceJet and Maran began in January 2015 when, as a result of the airline's financial difficulties, KAL Airways offered Mr. Singh, the primary stakeholder, chairman, and managing director of SpiceJet, a 58.46% interest in the company for a pitiful price of Rs 2 per share.

On May 17, the Delhi High Court overturned a previous ruling that had upheld the arbitral judgement against SpiceJet, a low-cost carrier, in favour of Kalanithi Maran. This was a relief for the financially beleaguered airline.

SpiceJet is expected to get a refund of Rs 450 crore when the contested verdict is set aside. On a challenge filed by SpiceJet's chairman and managing director (CMD), Ajay Singh, and the airline against a single-judge verdict that in July 2023 confirmed the award, a bench of justices Yashwant Varma and Ravinder Dudeja issued the decision.