Troubled airline SpiceJet is facing increased financial strain after it was revealed that the company has not deposited employees’ provident fund (PF) dues for nearly two and a half years. According to media reports, the last PF deposit was made in January 2022 for 11,581 employees.
An RTI query disclosed that the Employees’ Provident Fund Organisation (EPFO) has issued notices and summons to SpiceJet regarding the unpaid dues. The airline’s response to these notices is still awaited.
Earlier, in February, reports indicated that SpiceJet had delayed EPF deposits due to financial constraints, and the airline also delayed January salaries. Additionally, SpiceJet is embroiled in litigation with various aircraft lessors, some of whom are hesitant to extend leases. The National Company Law Tribunal (NCLT) issued a notice to SpiceJet on 18 April, regarding three insolvency pleas filed by lessors, with a total default amount of Rs 77 crore.
Adding to its woes, in May, KAL Airways and Kalanithi Maran sought over Rs 1,323 crore in damages from SpiceJet, challenging a recent Delhi High Court order in the Supreme Court. This dispute dates back to February 2015, when Maran and KAL Airways transferred their 58.46 per cent stake in SpiceJet. Maran and KAL Airways claimed they paid SpiceJet Rs 679 crore for issuing warrants and preference shares, which were never allotted, leading to arbitration proceedings against SpiceJet.
The latest developments regarding unpaid provident fund dues further complicate SpiceJet’s financial challenges, raising concerns about the airline’s ability to navigate its mounting legal and financial obstacles.
SpiceJet shares have declined by 7.6 per cent this year but have surged 86 per cent compared to last year.
