After the reports of a dispute between the promoters of the company, IndiGo chief executive officer (CEO) Ronojoy Dutta on Saturday assured shareholders the highest levels of corporate governance and said India's biggest carrier has a great track record of resolving issues and coming out ahead.
"We all know, that in any strong and well-managed company there will always be differences. And, yes, there may be differences currently on certain matters but the company has a great track record of resolving issues and coming out ahead. If the current differences were to not get resolved, you shall certainly hear about it; however, it serves no purpose speculating about it," Dutta said in a press release.
CNBC-TV18 reported on May 17 that there are differences between the founders but they have nothing to do with management roles.
InterGlobe Aviation owns and manages IndiGo airline , which has around 44 percent share in the domestic passenger market, has dispelled all attempts to portray the airline as a fractured team.
Talking on corporate governance, Dutta said, "More recently, the IGE Group nominated Damodaran, who has a wealth of Board experience on governance issues, as the new chairman of the Board. He is fully supported by the members of the board and the management team."
Hiring of Law Firms
"It is true that the IGE group is represented by the law firm of JSA and the RG Group is represented by the law firm of Khaitan & Company. These prestigious law firms have been on retainer by the founders since at least the time of the IPO of the Company in 2015 and they continue to represent the promoters on various ongoing matters as it relates to their shareholding in IndiGo. Thus, the 4-year-old ongoing retainer history of the law firms should not be presented or seen as a new revelation."
Management Changes
"It is true that IndiGo has gone through a number of changes in a continuum that stretches from Aditya Ghosh to Greg Taylor to a team of highly skilled expatriates to me. I can state unequivocally that every one of these senior leaders contributed a great deal to IndiGo and we are truly grateful for their contributions. But all great companies go through periods of transition as they evolve from one phase of their growth to another and a little bit of turbulence during these transition phases is neither unusual nor unwelcome. Most importantly, the promoters and the Board have worked as a team in making these management changes. We would urge the press not to confuse every management change as a sign of dissonance at the top."
Control Issues
There has been some speculation that perhaps some disagreement centres around the RG Group seeking to acquire more control of the management and the Board. I am authorized by Rakesh Gangwal to make the following statement on his behalf - “I am categorically and clearly stating that there is no interest or desire whatsoever on the part of the RG Group to take control of the company. Also, to put to rest the messaging on the fact that the RG Group is attempting to renegotiate the Shareholders Agreement, I am placing on record that the RG Group stands by the current SHA which, in any case, expires this October”. I don’t think Gangwal could have been more clear and explicit on his intentions and I thank him for authorizing me to make this statement on his behalf.
Rapid Growth and International Expansion
"Let’s be clear on one fact - IndiGo is an exceptionally successful company and one of the pillars that made it so successful is that it dared to have a bold vision regarding the future of aviation in India. Some in the press are now suggesting that perhaps IndiGo is having second thoughts on the very strategy that made it so spectacularly successful. I am now speaking to our employees who have been such a critical part of IndiGo’s success when I say, please do not believe these baseless speculations, we remain committed to our path of a rapid build-up of airline connectivity within India and to international destinations. Reiterating this, the full Board wants to clearly state that “IndiGo’s strategy in terms of growth and cost leadership remain unchanged, we remain committed to being an institution which benchmarks itself against the best-in-class organizations across the world."
As per the media reports, serious differences have cropped up among the two chief promoters over strategies and ambitions for the airline. In order to resolve the differences amicably so that it does not affect airline's functioning, Gangwal and Bhatia are taking help from law firms J Sagar Associates and Khatian & Co, respectively, as per the media reports.
While Rakesh Gangwal owns around 37 percent share in InterGlobe Aviation, Rahul Bhatia has around 38 percent share in the company that is listed on the Bombay Stock Exchange (BSE).
On May 16, Dutta in an email to his employees said that IndiGo remains unchanged and the airline's management has the full backing of the company's board of directors to implement it.
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