IndiGo row: Rahul Bhatia unlikely to agree on control structure dilution, ready for scrutiny
BusinessToday.In July 14, 2019
Engaged in a bitter tiff with friend and co-promoter Rakesh Gangwal, IndiGo's Rahul Bhatia is unlikely to agree to dilute the airline's control structure, reports suggest. This framework grants Bhatia the power to nominate Chairman, CEO and other management personnel in the company.
Moreover, Bhatia is confident that IndiGo is not in violation of the Company Law by any measure, and is prepared for scrutiny of the company books by any government agency, news agency IANS reported.
"The issues pertaining to related-party transactions (RPTs) and corporate governance have been raised. On pretext of this, one promoter wants to change the governance structure. But Rahul Bhatia is not going to yield," IANS quoted an executive as saying.
At the beginning of this week, co-promoter Rakesh Gangwal had flagged questionable related-party transactions and corporate governance issues at InterGlobe Aviation, the parent company of IndiGo, in a letter to SEBI and sought the market regulator's intervention in the matter. Gangwal had also raised concerns over Bhatia's unusual controlling rights over IndiGo.
A copy of the letter has also been sent to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, Civil Aviation Minister Hardeep Singh Puri, Commerce Minister Piyush Goyal and Corporate Affairs Secretary Injeti Srinivas, among others.
Gangwal and his affiliates have around 37 per cent stake in InterGlobe Aviation while Bhatia and his affiliates (IGE Group) have about 38 per cent.
On Thursday, officials said there are indications about violations of corporate governance, fair market trade and insider trading rules and SEBI needs to probe the role of each and every entity associated with all board members and promoter-linked entities.
On Friday, Bhatia's group said that InterGlobe Aviation is well run, financially sound and managed by a competent set of managers as it termed Gangwal's allegations as much ado about nothing.
Meanwhile, the government has said that it will examine related party transactions as well as shareholder and other agreements in InterGlobe Aviation.