Group Firm Arrangements Commercial Decisions: SpiceJet
Crisis-hit carrier SpiceJet on Wednesday said its arrangements with group companies are based on commercial decisions without any possibility of extending or receiving special treatment.
Press Trust of India | Last Updated: January 14, 2015 22:17 (IST)
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New Delhi: Crisis-hit carrier SpiceJet on Wednesday said its arrangements with group companies are based on commercial decisions without any possibility of extending or receiving special treatment.
Amid reports suggesting that huge amounts of money were diverted by the airline to sister companies, SpiceJet asserted that it is run in a professional manner and arrangements with Sun Group are only a "natural progression".
"The company operates independently and on its own in a very professional manner and any possibility of extending or receiving any special treatment in terms of commercial terms for any of the group companies is completely misconceived."
"Execution/extension of any arrangement is a commercial decision based on arm's length and has no other bearing to the same," SpiceJet said in a filing to the BSE.
The carrier also said it has entered into agreements with the group company only to extent required for its joint marketing and media purchasing activities.
These have been done after obtaining requisite approval of statutory authorities and in full compliance of the law of the land, it added.
"...for all the related party transaction entered into by the company under such arrangement, the aggregate value of transaction for all the financial year 2011-12, 2012-13 and 2013-14 taken together is merely Rs 36.63 crore," SpiceJet said.
According to the filing, Sun Group has a commanding presence in television, print and radio broadcasting and is a dominant player in most of its chosen market segments.
"It is by natural progression that SpiceJet would use the reach of Sun Group's reach to communicate to our customers about our products and services," it added.
SpiceJet, which is facing turbulent times, is looking to infuse fresh capital into the company and discussions are on with potential investors.
Shares in SpiceJet, on Wednesday, ended marginally lower at Rs 18.10 on the BSE.
Story first published on: January 14, 2015 20:28 (IST)