SpiceJet, a troubled airline, is experiencing increasing financial difficulty after it was found that the firm had failed to deposit 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 workers.
An RTI request revealed that the Employees’ Provident Fund Organisation (EPFO) had issued notifications and summons to SpiceJet for unpaid dues. The airline’s reaction to these notifications is currently pending.
SpiceJet had previously postponed EPF deposits owing to financial concerns, as well as January salaries, according to reports from February. SpiceJet is also involved in dispute with several aircraft lessors, some of which are hesitant to prolong leases. On April 18, the National Company Law Tribunal (NCLT) issued a notice to SpiceJet regarding three insolvency pleas filed by lessors, totaling Rs 77 crore in default.
Adding to its troubles, KAL Airways and Kalanithi Maran sued SpiceJet in May for roughly Rs 1,323 crore in damages, appealing a recent Delhi High Court judgement in the Supreme Court. This disagreement dates back to February 2015, when Maran and KAL Airways transferred their 58.46 percent ownership in SpiceJet. Maran and KAL Airways claimed they paid SpiceJet Rs 679 crore for issuing warrants and preference shares that were never allotted, prompting arbitration proceedings against SpiceJet.
The latest revelations about unpaid provident fund dues exacerbate SpiceJet’s financial problems, raising concerns about the airline’s capacity to overcome its mounting legal and financial barriers.
SpiceJet shares have fallen 7.6% this year, but are up 86% from last year.
