InterGlobe Enterprises clarified that the related party transactions (RPTs) it entered with group entities — a sore point in the acrimonious spat between IndiGo co-founders Rahul Bhatia and Rakesh Gangwal — are public and only a fraction of the total revenues of the airline’s holding company.
InterGlobe Enterprises, which has interests in aviation, hospitality and travel-related services and is controlled by Bhatia, has two group entities namely, The IGE Group and InterGlobe Aviation Limited (IGAL). IGAL is the parent company of IndiGo, India’s largest airline.
On Tuesday, the differences between the IndiGo co-founders intensified after Gangwal wrote to market regulator Sebi, detailing his concerns over violation of governance norms and his discomfort with RPTs, alleging that these transactions benefited Bhatia.
The existence of RPTs was disclosed at the time of IndiGo’s IPO in 2015 in the public domain and the transactions for IGAL are not significant because they are only 0.53 percent of IGAL’s consolidated turnover for 2018-19, InterGlobe Enterprises said in a statement.
InterGlobe said over the years the RPTs between IGAL and the IGE Group have been in six areas — real estate leased to IGAL, call centre and IT services, simulator training facilities, general sales agents (originally for domestic passenger and cargo, and for certain foreign markets), shared services and crew accommodation at Accor Hotels.
InterGlobe said The IGE Group has ensured that no entity of the group should take any advantage under RPTs, InterGlobe said, adding that without exception, IGAL has received more favourable treatment compared to other customers. “Post 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."