NEW DELHI: Contrary to expectations, shareholders of IndiGo rejected a proposal by promoter and co-founder Rakesh Gangwal to amend the company’s Articles of Association (AoA). The absence of Gangwal from the Extraordinary General Meeting (EGM), which he himself had called for, unsettled the shareholders of India’s largest airline so much so that chairman M Damodaran had to call security guards to bring the situation under control.
“The Special Resolution has not been passed as the votes cast in favour (48.55 per cent) of the resolution are less than three times the number of votes cast against (51.44 per cent) the resolution,” IndiGo’s parent firm InterGlobe Aviation said in a BSE filing after the EGM.
The development comes as Gangwal had sought removal of articles pertaining to transfer and acquisition of the company’s shares, including ‘Right of First Refusal’ and ‘Tag Along Right’, amid a tussle with his founding partner Rahul Bhatia.
Many experts believed that the amendment would clear paths for Gangwal to sell his stake in the airline and end the bitter war, which has impacted InterGlobe Aviation’s share price. However, that did not happen and shareholders showed their concern.
“Even as the airline is doing fine business-wise, the tussle between the promoters has eroded our wealth. We want them to come to a conclusion as early as possible, so that there is no more fall,” said a shareholder.IndiGo’s share price gained 0.47 per cent to close at `1,460.60 on NSE on Wednesday, mainly on the back of 168 per cent rise in consolidated net profit at `496 crore it posted on Tuesday. However, this is much lower when compared to the airline’s 52-week high of `1,898.85. The differences between the two co-founders, one of the main reasons that impacted the stock price, came out in public after Gangwal, in July 2019, sought the intervention of Securities and Exchange Board of India to address alleged corporate governance lapses at IndiGo.
On bourses
IndiGo’s share price gained 0.47% to close at `1,460.60 on NSE on Wed-nesday, mainly on the back of 168% rise in consolidated net profit it posted on Tuesday. However, its current share prices are much lower when compared to its 52-week high of `1,898.85.