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SpiceJet faces fresh financial crisis over non-payment of pension fund dues | Company News
SpiceJet faces fresh financial crisis: SpiceJet’s last provident fund deposit was made in January 2022 for 11,581 employees, as revealed by a query sent to EPFO
Nandini Singh New Delhi
Troubled airline SpiceJet may be heading towards a deepening financial crisis as it has been found that the company has not deposited employees’ provident fund (PF) contributions for nearly two and a half years, according to a report by CNBC-TV18.
The last provident fund deposit by SpiceJet was made in January 2022 for 11,581 employees, as revealed by a query sent to the Employees’ Provident Fund Organisation (EPFO). The EPFO has since issued notices and intimations to SpiceJet over the unpaid dues, but the airline is yet to respond.
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The revelation adds to the airline’s ongoing financial woes. SpiceJet’s shares have fallen 7.6 percent this year, though they are up 86 percent compared to the same period last year. In February, reports emerged that the airline had delayed EPFO deposits due to a shortage of funds and liquidity constraints, also resulting in delayed salaries for January.
SpiceJet faces insolvency claims
SpiceJet is currently embroiled in litigation with several 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 carrier in response to three insolvency petitions filed by aircraft lessors, citing a total default of Rs 77 crore.
KAL Airways seeks compensation
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, defying 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 per cent stake in SpiceJet to Singh, who agreed to take over the airline’s liabilities of around Rs 1,500 crore.
Maran and KAL Airways allege that they paid SpiceJet Rs 679 crore for issuing warrants and preference shares, which were never allotted. This has prompted Maran to initiate arbitration proceedings against SpiceJet and Singh.