Rakesh Gangwal, the promoter of InterGlobe Aviation, said he will be supporting a proposed amendment to the Articles of Association, bringing to an end for now a bitter dispute with his co-founder Rahul Bhatia.
InterGlobe Aviation is the parent company of IndiGo, India’s largest airline.
Differences between Gangwal and Bhatia became public after the former wrote to authorities complaining about serious governance lapses at the company.
The board has now approved a new related party transaction policy for IndiGo — the centrepiece of Gangwal’s battle with Bhatia — and to also close an open issue if the Articles of Association are amended at the upcoming August 27 AGM to increase the size to 10 directors, Gangwal said in a statement. “In light of this positive and important development, I will be supporting the proposed changes to the Articles.”
Gangwal said while much work lies ahead, including mending some fences and the regulators completing their investigations on the governance issues raised with them, it is gratifying to see progress towards better governance.
On July 8, Gangwal had written a letter to Sebi seeking regulatory intervention with regard to his disagreements with Rahul Bhatia on corporate governance norms and related party transactions. Rahul Bhatia's InterGlobe Enterprises had denied the allegations made by Gangwal and had called them baseless.
The dispute between the promoters figured prominently at a board meeting held on July 19 and 20 to consider the April-June earnings of the company. In the meeting, the board decided to amend the Articles of Association (AoA) of IndiGo to add up to 10 members, including four independent directors.
More independent directors, including the addition of an independent woman director, on the board and straightening out questionable related party transactions (RPTS) were the principal demands of Gangwal.
As of March 31, the two promoters held 74.93 percent share, while the rest 25.07 percent is held by the public. Bhatia and his associates hold the highest stake in the company at 38.26 percent, followed by Gangwal and his associates at 36.68 percent.
Shares of Interglobe Aviation ended at Rs 1,647.00, up Rs 27.10, or 1.67 percent on the BSE.