The tussle between IndiGo co-founders Rakesh Gangwal and Rahul Bhatia is far from over as it has come to light that Gangwal has once again written to Sebi urging action on governance issues raised by him. Sebi has sought a response from InterGlobe Aviation on the fresh letter which sought directions to the firm regarding amendments in Articles of Association, related party transactions, non-independence of current chairman M Damodaram, among others.
During the recent Annual General Meeting on August 27, both the promoter groups voted in favour of all resolutions, including amending the Articles of Association, expanding the size of the board to 10 members, and appointing the chairman as an independent director. IndiGo Chairman M Damodaran had recently said that the aviation firm had submitted all documents related to the information sought by the Ministry of Corporate Affairs and Sebi.
The co-promoters had been sparring over questionable related party transactions and composition of the company's board, which Gangwal had flagged off as serious corporate governance lapses in India's largest airline. While Bhatia and his InterGlobe Enterprises (IGE) Group own around 38 per cent of the airline, Gangwal and his affiliates own a 36.68 per cent stake.
"We have made some procedural changes to our existing RPT (related party transactions) policy and the revised policy has been unanimously approved by the board. Also, the board will be expanded to 10 members and four of the directors will be independent," IndiGo CEO Ronojoy Dutta's letter to employees said on Tuesday.
Gangwal last month had issued a statement, saying he was satisfied with the new related party transactions (RPTs) protocols approved by the board and was open to the amendments in the IndiGo's Articles of Association (AoA) to increase the board strength to 10. The statement came as a surprise because Gangwal agreeing to a 10-member board (and not seven as he has proposed earlier) still left his previous issue unresolved.
Post the amendments, IndiGo's board strength has been increased to 10 from the previous six members. In a 10-member board, the Bhatia camp will have the right to nominate five, and Gangwal two. This is far higher than the arithmetically-sound seven-member board proposed by Gangwal in his letter to the board on August 5.
Incidentally, Gangwal did not attend the IndiGo's AGM on August 27. Not just Gangwal, his nominee on the board Anupam Khanna also skipped the meet, leaving the remaining four board members - Rahul Bhatia, Rohini Bhatia, Anil Parashar, and M Damodaran - to answer all uncomfortable questions by the shareholders.
Edited by Manoj Sharma