SpiceJet Faces Criminal Probe Over Provident Fund Delays

SpiceJet (SG, Delhi International) is under scrutiny as it faces a criminal investigation for failing to deposit over INR 650 million (approximately USD 7.7 million) in employee provident fund contributions. According to a report by the Economic Times, the Delhi Police’s Economic Offences Wing filed a First Information Report (FIR) on September 16, following a complaint lodged by the Employees’ Provident Fund Organisation (EPFO).

The investigation has raised concerns about the financial practices within the airline, with key figures including Chairman and Managing Director Ajay Singh, Director Shiwani Singh, Independent Director Anurag Bhargava, Ajay Chhotelal Aggarwal, and Manoj Kumar named in the FIR. This document is a formal police report prepared after receiving information about the commission of a cognizable offence, indicating the seriousness of the allegations.

The FIR claims that SpiceJet deducted 12% in provident fund contributions from employee salaries between June 2022 and July 2024 but failed to remit these amounts to the provident fund within the mandated 15-day window. This delay has drawn criticism and scrutiny from regulatory bodies, with ch-aviation previously highlighting issues related to SpiceJet’s provident fund payments.

In response to the investigation, SpiceJet confirmed on October 4 that it has brought its provident fund payments up to date, clearing ten months’ worth of contributions. This development follows a successful capital raising initiative of INR 300 billion (USD 357.1 million), which has provided the airline with the necessary liquidity to address its financial obligations. The airline stated, “The process of clearing the remaining dues is ongoing,” indicating its commitment to resolving outstanding issues.

Additionally, SpiceJet announced that it has successfully reached settlements with multiple lessors, further stabilizing its financial standing. The successful capital raising has allowed the airline to clear a backlog of liabilities, providing a much-needed boost to its operations.

As SpiceJet navigates this challenging situation, it remains focused on restoring its reputation and ensuring compliance with regulatory requirements. The airline’s commitment to addressing its financial obligations is crucial for maintaining trust among stakeholders, including employees, investors, and regulatory authorities.

The investigation underscores the importance of financial accountability in the aviation sector, especially as airlines face numerous challenges in the post-pandemic recovery phase. SpiceJet’s proactive measures to rectify past discrepancies will be vital in ensuring its long-term sustainability and growth in the highly competitive airline industry.

As the situation unfolds, industry observers will be closely monitoring SpiceJet’s actions and the outcomes of the ongoing investigation, which could have significant implications for the airline’s future operations and overall market position.

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com