In a deepening rift between InterGlobe Aviation promoters, Rakesh Gangwal has said there are "serious unresolved issues" and opposed expanding the board, just weeks ahead of the company's annual shareholders' meet.
Amid the continuing feud with co-promoter Rahul Bhatia, Gangwal has shot off a letter to InterGlobe Aviation's board flagging concerns about certain proposals put forward in the notice for the Annual General Meeting (AGM), scheduled for August 27.
Markets regulator Sebi has sought comments from the company -- parent of the country's largest airline IndiGo -- on the latest letter.
Just 15 days after the board meeting, which had stretched to two days, Gangwal also termed reports of reaching a truce as false and misleading.
Gangwal, in a letter dated August 5, said that based on "serious unresolved issues", he was not in a position to vote affirmatively on the special resolution for 'Alteration in Articles of Association of the Company' unless certain issues are addressed.
According to Gangwal, there should be a complementary board resolution to prevent IGE Group from getting even more rights and abilities than they have today. A new Related Party Transaction (RPT) policy has to be adopted, language for which has already been agreed, he said in the letter dated August 5.
"The AGM notice, along with 'unnamed sources' having planted press reports that the chairman has brokered peace and matters have been resolved, leaves a misleading and false impression that issues on RPTs and changes to the Articles have the support of both promoter groups.
"This is in stark contradiction to the numerous emails exchanged since July 20, and my July 27th email to board members stating that I am ... unable to support the resolution in the absence of the complementary Board resolution on the Articles and the RPT policy", Gangwal has said.
The letter has been disclosed to the stock exchanges by InterGlobe Aviation on Tuesday.
Gangwal also said that in his view, the chairman should have directed the company to flag this material fact in the AGM notice in the interest of transparency and for the benefit of the minority shareholders.
At present, the board has six members.
Former Sebi chief M Damodaran is the chairman of InterGlobe Aviation.
The differences between the promoters came into the public in July after Gangwal wrote to Sebi seeking its intervention to address corporate governance issues at the company.
Bhatia's InterGlobe Enterprises (IGE) Group has rejected the allegations.
In the latest letter, Gangwal noted that changes to AoA are still an open issue and that the proposal to have 10 board members came up only at the July 20 board meeting with limited and rushed discussions on its implications. It was agreed that there would be two new members of IGE Group and two new independent directors.
"Subsequent to the board meeting and in finalising the language on the Articles, all of us realised that the proposed board structure created a large loophole that gives the IGE Group additional powers that they do not have today.
"Essentially, when there are less than four independent directors, it would allow the IGE Group to pass any company policy that they want just on the basis of their board numbers being larger than all the other board members combined," the letter said.
Noting that the IGE Group is holding the process hostage, Gangwal said there are agreements on all issues, including closing the large loophole during the board ramp up transition period but has not offered to close the large loophole after the transition period.
"Too much angst has been felt by many and we have come a long way to resolve these matters. The current impasse is not good for any of us. The best option is to close the large loophole, circulate the board resolutions for approval on all the other matters, language for which has already been agreed upon," Gangwal noted.
In Tuesday's filing to the stock exchanges, InterGlobe Aviation said it has received an email from Sebi "advising the company to provide our comments to the letter of Gangwal, with which the company will comply". A copy of the letter has also been sent to the corporate affairs ministry, which is already looking into alleged corporate governance lapses at the company.
Gangwal said he has set up a website to upload relevant information and address false narratives planted in the press by 'unnamed sources' who hide behind a veil".
According to the filing, the website has not been approved or authorised by the company and no reliance should be placed on the contents of this website as it may contain incomplete and therefore misleading information.
Gangwal and his affiliates hold around 37 per cent stake in InterGlobe Aviation while Bhatia's group owns nearly 38 per cent shareholding.
In an email on August 5, Damodaran said he would be initiating a proposal for scheduling meetings of the Audit Committee (AC), Nomination and Remuneration Committee (NRC) and board, immediately after the AGM.
"At that meeting of the AC, followed by a meeting of the Board, the RPT policy will be cleared. At the meeting of the NRC, the selection of the woman independent director will be addressed. I trust the approach, indicated in the foregoing paragraphs, is clear. May I add that I personally have no inclination to get into a continuing exchange of emails?," he said.
The email has been disclosed to the stock exchanges.