NEW DELHI: While it has been long clear that all is not well between IndiGo promoters Rakesh Gangwal and Rahul Bhatia, the two have now accused each other of serious charges, in two separate letters. Markets regulator SEBI, who is investigating the matter, has sought details from the airline’s listed parent firm InterGlobe Aviation by July 19.
The more recent letter comes from Gangwal, who holds 37 per cent in the company along with affiliates. Dated July 8, Gangwal’s letter to the Securities and Exchanges Board of India (SEBI) blames Bhatia and his IGE group (which holds 38 per cent of the firm) for lack of proper corporate governance in the working of the company and certain related-party transactions (RPT). He had also written a similar letter to the company’s shareholders on May 22.
Gangwal added that the unusual rights available to the IGE Group in conjunction with the lack of diversity and paucity of independent directors in the board may very well be at the root of why governance matters have taken such a back seat at IndiGo. He said the board decisions and resolutions on critical matters are being implemented without following basic governance protocols.
The board has also not appointed an independent woman director as mandated by SEBI since May 2018, he said. On the crucial RTPs, Gangwal said in his letter that, “Bhatia would start building an ecosystem of other companies that would enter into dozens of related party transactions with IndiGo. We are not against RPTs as long as proper checks and balances exist and such RPTs are in the best interest of the Company.” He asserted that even a “paan ki dukaan” (paan shop) would have managed matters with more grace.
Bhatia, however, in an earlier letter dated June 12, has rebuked these allegations and said that the whole event has exposed Gangwal’s machinations, motivation and intent. Bhatia alleged that the RPT issue has an underlying context and the real agenda of the RG Group was to dilute and diminish the controlling rights of the IGE Group and relieve itself from its obligations under the Shareholders’ Agreement and the Articles of Association which ensure implementation and enforcement of the IGE Group’s controlling rights.