IndiGo’s Rakesh Gangwal flags governance lapses

Mumbai: As part of its investigation into the IndiGo Airlines affairs, markets regulator Sebi has sought details from the airline’s parent firm InterGlobe Aviation regarding a complaint filed by co-founder Rakesh Gangwal alleging irregularities in the running of the firm.

Gangwal, who founded the airline with Rahul Bhatia, has sought Sebi's intervention in addressing his grievances, InterGlobe Aviation said in a regulatory filing on Tuesday.

In a statement, Gangwal, who along with his affiliates, holds around 37 per cent stake in the company, said his letter lists out certain serious concerns regarding governance matters at IndiGo.

“We are big believers in the long-term potential of IndiGo and its business and operational model… However, we also firmly believe that IndiGo can only realise its true potential and be a world class company if it has both—a world class business and operational model as well as world class governance standards," Gangwal said in the statement.

InterGlobe told stock exchanges that its board of directors has received a letter from Gangwal.

Sebi has been probing the matter since reports surfaced about differences between the two key promoters, sources said. Reportedly, there are differences between Gangwal and Bhatia over certain related-party  transactions.

"Sebi has in the meantime asked the company to give its response  to this letter by July 19, 2019, with which the company will comply," the filing said.

Shares of InterGlobe closed marginally lower at Rs 1,565.75 on the BSE.

Locked in a bitter battle with Bhatia—who holds arund 38 per cent stake (IGE Group) in the company along with affiliates—Gangwal alleged that even a "paan ki dukaan" (betel shop) would have managed matters with more grace.

Gangwal, in the letter to the markets regulator, has flagged governance issues at the company and accused Bhatia and his firms of indulging in questionable related-party tran-sactions.

He said the shareholders' agreement provides Bhatia unusual controlling rights over IndiGo.

"Beyond just questionable Related Party Transactions, various fundamental governance norms and laws are not being adhered to and this is inevitably going to lead to unfortunate outcomes, unless effective measures are taken today," Gangwal said in the letter.

Referring to various events at the company, Gangwal, in a proposed notice for extraordinary general meeting, said the events go "far beyond just poor governance and even a 'paan ki dukaan' would have handled these matters with more grace".

A copy of the letter has also been sent to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, Civil Aviation Minister Hardeep Singh Puri and Commerce Minister Piyush Goyal, among others.