HC tells SpiceJet to issue stock warrants to Maran, Kal

The Delhi High Court on Friday asked no-frills airline SpiceJet to pass a board resolution for issuing stock warrants to Sun Group managing director Kalanithi Maran and his Kal Airways Pvt Ltd in line with a sale purchase agreement of 2015 which led to change in ownership of SpiceJet.

The judge asked both sides to come with the draft terms they are agreeable to, after which he would pass orders on the petition moved by Maran seeking a stay on transfer of any shares of the airline.

The matter has been listed for orders on 14 March.

Maran and his airline Kal have alleged in their plea that despite their giving around Rs579 crore to SpiceJet, the carrier failed to issue them the warrants or allot them tranche one and two of convertible redeemable preference shares and the amount was not utilised for paying statutory dues.

Dismissing these allegations, SpiceJet claimed that the warrants can be issued only after approval from the BSE (formerly Bombay Stock Exchange). It also said there was no fear of transferring shares to a third party or to Maran as the shares have not yet been issued by the company.

It further said that the change of ownership was effected as a rehabilitative measure to address the liability of Rs2,000 crore incurred by the airline while under the management of Maran. SpiceJet, now back under its co-founder Ajay Singh, also claimed that every penny has been utilised towards operations and discharge of liabilities.

Under the 2015 sale/purchase agreement, Maran and Kal transferred their entire 350,428,758 shares (58.46 per cent stake) in the airline to Ajay Singh.

By the deal, they were to receive the redeemable warrants in return for Rs679 crore that they were to give to the airline towards operating costs and debt payment, the petition claimed.