Related deals done at arms length: Rahul Bhatia

Chennai: The related party transactions (RPTs) between InterGlobe Aviation (IGAL) and InterGlobe Enterprises (IGE), the main bone of contention between IndiGo’s co-promoters Rakesh Gangwal and Rahul Bhatia, were 0.53 per cent of IGAL’s consolidated turnover for FY19.

A release from IGE, the holding company of Rahul Bhatia's businesses, said the total amount earned through these RPTs, which were in real estate, simulation training, General Sales Agreement (commission+ rent) and crew accommodation was Rs 118.96 crore in FY18, which is 0.50 per cent of IGAL’s consolidated turnover.

The total amount earned was Rs 150 crore in FY19, 0.53 per cent of IGAL’s consolidated turnover. The release also noted that the existence of these RPTs, disclosed at the time of InterGlobe Aviation’s IPO in 2015, was in the public domain.

After the IPO many of the RPTs have ceased to exist while others have been renewed on an arms’ length basis as part of the normal course of business.

“The IGE Group has ensured that no entity of the group should take any advantage under RPTs. Without exception, IGAL has received more favour-able treatment from the IGE Group entities as compared to their other customers,” stated the release.

Raising concerns about certain questionable RPTs earlier, Gangwal had said that a shareholders' meeting had provided Bhatia unusual controlling rights over IndiGo.

The spat between the promoters led to shares of InterGlobe Aviation nosediving 19.24 per cent on the NSE and 17.54 per cent on the BSE. But the shares recovered partially and finally closed 10.73 per cent lower at Rs 1,397.75 on the BSE and at Rs 1,398.05 on the NSE.