InterGlobe Aviation share price extended losses in trade today after co-founder Rakesh Gangwal raised corporate governance issues in airline IndiGo forcing the market regulator Securities and Exchange Board of India (SEBI) to intervene. Investors in InterGlobe Aviation lost Rs 9,778 crore wealth in the last two trading sessions after a rift between two founders of India's largest airline became public on Wednesday.
InterGlobe Aviation share price fell up to 9% to 1,272 level in trade today. The airline share price closed 3.07% lower at 1,354 level in trade today.
InterGlobe Aviation share price has been losing for the last 3 days and has fallen 13.72% during the period. InterGlobe Aviation share price has risen 26.14% during the last one year and gained 16.22% since the beginning of this year.
Gangwal, who holds 36.68 per cent stake, wrote a 23-page letter to SEBI chairman Ajay Tyagi seeking regulatory intervention on his alleged grievances, with a copy to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, Civil Aviation Minister Hardeep Singh Puri and Commerce Minister Piyush Goyal among others.
Gangwal alleged another co-founder Rahul Bhatia of indulging in questionable related-party transactions and further added concerns about the questionable RPTs, fundamental governance norms and laws were not being adhered to and this would lead to "unfortunate outcomes" unless correctives were applied. According to him, the shareholders' agreement provides Bhatia unusual controlling rights over IndiGo.
"Beyond just questionable Related Party Transactions, various fundamental governance norms and laws are not being adhered to and this is inevitably going to lead to unfortunate outcomes unless effective measures are taken today," Gangwal said in the letter.
"I have vigorously attempted for almost a year to persuade the Company to shore up its governance standards, and all my attempts have been thwarted by the IGE Group. The Company's and certain Board members constant platitudes that they are "working on these issues ... going forward we will be more mindful ... we have been addressing these issues" have become just words. " the regulatory filing on the matter stated.
Meanwhile, SEBI in response has sought details from the Board of Directors of InterGlobe Aviation against the complaint filed by Gangwal. IndiGo's parent firm has been asked to furnish its response by July 19.
SEBI has been probing the matter since reports surfaced about differences between the two key promoters. Earlier media reports suggested that there were differences between Gangwal and Rahul Bhatia over certain related-party transactions.
Edited by Aseem Thapliyal