A single judge bench of the Delhi high court has reportedly rejected a plea by IndiGo co-promoter Rakesh Gangwal to enforce an arbitration award given by the London Court of International Arbitration.
The Gangwal group has a stake of around 36.63 per cent in InterGlobe Aviation — the parent of IndiGo while the Rahul Bhatia group has a shareholding of 38 per cent.
Differences between the two promoters had come out in the open in July 2019 after Gangwal shot off a letter to the Securities and Exchange Board of India (Sebi) seeking its intervention to address corporate governance issues in the company.
In October 2019, InterGlobe Enterprises (IGE) and Bhatia had sought arbitration proceedings against Gangwal, the Chinkerpoo Family Trust and Shobha Gangwal (RG Group).
Recently, the London Court of International Arbitration had given the final arbitration award, and Gangwal moved the Delhi High Court to enforce the award.
Gangwal had sought a direction from the Delhi High Court for the conduct of an extraordinary general meeting (EGM) for doing away with certain transfer restrictions that came on account of a right of first refusal present in the company’s Articles of Association (AoA).
The award had said that the AoA that gives this right to both the promoters of the company on each other’s shares be amended and that an extra-ordinary general meeting be held in this regard with consensus by both the promoters.
However, the Delhi High Court on Friday said that the orders has given a time of 90 days for the implementation of its directions, and that Rahul Bhatia may also choose to contest its directions during this period.
Shares of InterGlobe Aviation on Friday ended marginally higher at Rs 1961.75 on the Bombay Stock Exchange.
He had also raised questions about certain related party transactions (RPTs) between IndiGo and entities belonging to the IGE group. Gangwal alleged that these transactions between IndiGo and the IGE group did not have the approval of the board and the audit committee and were often backdated. Besides, many of these RPTs undermined the interests of the airline, Gangwal said.
He also said that there was misrepresentation in the company's Red Herring Prospectus (RHP) dated October 16, 2015. All these charges were rejected by the IGE group.
Earlier, Gangwal’s request for an extraordinary general meeting to discuss the affairs of the company was turned down by a 4:2 vote at a board meeting on June 12 2019.
