InterGlobe Aviation that runs the low-cost airline IndiGo said on Saturday that it will take approval of its shareholders to expand the board of director to induct a woman director. A company statement said that the approval will be taken at the upcoming annual general meeting (AGM).
The board meeting that began on Friday and continued the following day took place amid an ongoing dispute between the promoters, Rakesh Gangwal and Rahul Bhatia. The dispute between the promoters took place over a host of issues related to the governance of the airline.
One of the issues that became a bone of contention between the two promoters was the expansion of the board to include more independent directors. According to Securities and Exchange Board of India (SEBI) regulations, all listed companies must have at least one woman director on their boards.
The lack of a woman director on their board was one of the several demands made by Gangwal in his letter to market regulator SEBI. Rakesh Gangwal alleged "corporate governance lapses" and "related party transactions" in India's largest airline company.
However, a forensic review conducted by Ernst & Young found no such "procedural lapses", according to reports. "All transactions entered into with related parties as defined under the Act and the Listing Regulations during the last five financial years were on an arm's length basis...none of the transactions with any of the related parties was in conflict with the interest of the company," the EY report had stated.
Meanwhile, the government has also sought explanations from the company on the allegations "corporate governance lapses". In a recent filing to the stock exchanges, the company said it had received a communication from the Ministry of Corporate Affairs (MCA).