The rift between the two promoters of India's largest airline IndiGo only seems to be widening as Rahul Bhatia's InterGlobe Enterprises Ltd (IGE) responded to Rakesh Gangwal's remark about collapsing corporate standards at the airline and said that the "Paan ki dukaan" is doing well.
"Gangwal fails to cite a single concrete example where any act or omission has resulted in any loss or damage to IndiGo. "Paan ki dukaan" has apparently done well and continues to do well; it is financially sound; it is well run and managed by a competent set of managers. Gangwal’s allegations about lack of corporate governance are much ado about nothing," Bhatia's InterGlobe Enterprises said on Friday.
In a letter dated July 8 to Sebi, Gangwal had sought regulatory intervention regarding disagreements with Bhatia's InterGlobe. In the letter, Gangwal had claimed that the corporate governance standards have been falling at IndiGo and unusual rights are available with InterGlobe.
"We believe that this whole set of events goes far beyond just poor governance and even a "Paan ki dukaan" would have handled these matters with more grace. We leave it to the shareholders to make their own assessment of these events," Gangwal had told Sebi.
While Bhatia's InterGlobe had issued a statement on related party transactions, which, as per the letter from Gangwal, is at the centre of the rift, the group had clarified further on Friday regarding shareholders agreement.
"Shareholders’ agreement was negotiated in 2006 and amended twice in 2015 as a precursor to IPO to comply with statutory requirements. Gangwal talks about unusual rights of IGE as a shareholder and promoter, but he fails to give even one instance where there has been any misuse of any such right," the group said.
Gangwal has based his allegations on “whistleblowers” who chose not to use the whistleblower mechanisms and procedures established by IndiGo, InterGlobe said, adding that corporate governance is not about levelling baseless charges as it is about ensuring that company’s and shareholders' interests are protected, and not harmed.
As of March 31, the two promoters hold 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.
First Published: IST