IndiGo founders Rahul Bhatia and Rakesh Gangwal have called a truce on two critical issues — related party transactions (RPTs) and the composition of the company’s board.
The six-member board of InterGlobe Aviation, the parent of IndiGo, which includes both Bhatia and Gangwal, will be expanded to 10 with the addition of four independent directors.
Bhatia’s InterGlobe Enterprises (IGE) Group will nominate five members to the board, including the CEO, with Gangwal retaining his seat. Amendments to the company’s articles of association (AoA) will be made to reflect the changes.
The company will take shareholder approval for the amendments at its forthcoming annual general meeting.
As of June 30, the two promoters held 74.89 per cent share in InterGlobe, while 25.11 per cent is with the public. Bhatia owns a 37.88 per cent stake and Gangwal, about 36.65 per cent.
Related party deals
The new policy on related party transactions was approved by the board unanimously at its meeting on July 19 and July 20.
Gangwal had flagged concerns about related-party transactions involving co-founder Bhatia’s InterGlobe Enterprises, and the allegations were refuted by the Bhatia camp.
Sources said that under the new framework, for transactions above Rs 2 crore, bidding would be mandatory and approval given by the audit committee. Further, any changes in RPTs would have to be unanimously approved by the company’s independent directors.
The differences between the co-promoters came into the open earlier this month after Gangwal wrote a letter to the Securities and Exchange Board of India (Sebi) and others flagging concerns about alleged corporate governance lapses in the company. Even a pan ki dukaan would have handled things better, Gangwal said.
News of a truce between the two promoters saw the InterGlobe stock ending with good gains on the bourses on Wednesday.
On the BSE, the scrip finished 4.69 per cent, or Rs 71.40, higher at Rs 1,594.45, in an otherwise weak market where the benchmark index closed lower by more than 135 points.
Former Sebi chairman M. Damodaran is the chairman of InterGlobe Aviation. Apart from Gangwal, Bhatia and his wife Rohini Bhatia, former World Bank executive Anupam Khanna and chartered accountant Anil Parashar are the board members.
The market regulator and the corporate affairs ministry are looking into the alleged governance lapses at the company.
The ministry had asked the company to provide certain explanations under Section 206 (4) of the Companies Act with regard to Gangwal’s complaints. The company had said it would respond within the prescribed period.
Jet case
State Bank of India, the lead lender to Jet Airways, on Wednesday moved an intervention application against mortgage lender HDFC’s plea claiming rights over a portion of the airline’s BKC property.
The National Company Law of Tribunal (NCLT) adjourned the matter for August 8.
