NEW DELHI: The legal tussle between private carrier IndiGo’s promoters Rahul Bhatia and Rakesh Gangwal is likely to see new developments soon. Gangwal, who had earlier accused Bhatia’s camp of misgovernance, has sought for an Extraordinary General Meeting (EGM) to make amendments in the Article of Association (AoA).
According to a regulatory filing by IndiGo’s parent firm InterGloble Aviation, the EGM would discuss deleting various Articles pertaining to transfer and acquisition of the firm’s shares, including the ‘Right of First Refusal’ and ‘Tag Along Right’, in the company’s AoA.
To note, ‘Right of First Refusal’ is a contractual right that stops a shareholder from selling his shares in the company to a third party without first offering them to another party (usually the existing shareholder). In IndiGo’s context, it means that one of the two parties can sell the stake to a third party and exit the airline, without offering the shares to another party.
Currently, Bhatia’s camp — InterGloble Enterprises — run the show and it is unlikely to sell any stake. The two promoters hold 74.93 per cent shares, and the rest is with the public. The company received a letter from Gangwal on November 13, 2019, seeking changes in the AoA, Friday’s filing said. The shareholders’ agreement expired on November 10, 2019, the fourth anniversary of the company’s initial public offer.
However, the AoA contains many provisions of that agreement. With these provisions now expired, Gangwal’s camp seeks an amendment to the AoA, to remove those expired provisions as per an annexure in the communication dated December 24.