SpiceJet share price rose in early trade today after investors shunned InterGlobe Aviation stock amid one of its promoter Rakesh Gangwal flagging serious corporate governance lapses at the airline. In a letter to market regulator SEBI on Tuesday, Gangwal said that even a "paan ki dukaan" (betel shop) would have managed matters with more grace.
SpiceJet share price rose 9.38% to 128.25 level compared to the previous close of 117.25 on BSE.
SpiceJet share price opened with a gain of 4.14% at 122.1 0 on BSE. SpiceJet share price has gained 11.77% during the last one year and gained 38.96% since the beginning of this year.
In comparison, the 30-stock Sensex has gained 7.17% since the beginning of this year and 6.67% during the last one year.
Its competitor InterGlobe Aviation fell up to 17.55% to 1291 compared to the previous close of 1565 on BSE after the Gangwal wrote a letter to Sebi.
In a letter to market regulator Sebi yesterday, IndiGo promotor Rakesh Gangwal flagged serious corporate governance lapses at the company. Gangwal said that even a "paan ki dukaan" (betel shop) would have managed matters with more grace.
Gangwal has made these allegations while he is engaged in a bitter tussle with co-founder Rahul Bhatia. Gangwal, along with his affiliates, holds around 37 per cent stake in InterGlobe Aviation. Co-founder Rahul Bhatia and his affiliates (IGE Group) has around 38 per cent stake. InterGlobe Aviation (or IndiGo) is also the parent of the country's largest airline IndiGo.
In his letter to SEBI, Gangwal has alleged Bhatia of indulging in questionable related-party transactions. According to him, the shareholders' agreement provides Bhatia unusual controlling rights over IndiGo. He stated that the company "started veering off" from the core principles and values of governance that made the company what it is today.
"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.
Gangwal has also sent a copy of the letter to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, Civil Aviation Minister Hardeep Singh Puri and Commerce Minister Piyush Goyal among others.
Meanwhile, SEBI has sought details from InterGlobe Aviation against the complaint filed by Gangwal. IndiGo's parent firm has been asked to furnish its response by July 19. In a stock exchange filing, the company has also confirmed that its board of directors has received a letter from Gangwal.
Edited by Aseem Thapliyal
Copyright©2023 Living Media India Limited. For reprint rights: Syndications Today