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aviation | IST

IndiGo's Damodaran says no probe underway over related-party transactions

Mini

In the latest statement made by Gangwal, there were indications of some truce as Gangwal said that the company board has approved a new policy for related-party transactions.

IndiGo chairman M Damodaran, in an interview with CNBC-TV18 on Friday, clarified that there was no investigation by any regulator over related-party transactions.
"We are on our way to peace, there has been a conversation among promoters," he said, adding "the words correspondence and investigation are loosely interchanged by people."
The airline's two promoters Rakesh Gangwal and Rahul Bhatia have been involved in a bitter dispute since nearly a year over disagreements about corporate governance standards and related-party transactions between IndiGo and Bhatia's InterGlobe Enterprises.
In the latest statement made by Gangwal, there were indications of some truce as Gangwal said that the company board has approved a new policy for related-party transactions. The new policy mandates competitive bidding for all such transactions between the airline and its parent InterGlobe Enterprises, several people aware of the development told CNBC-TV18.
The new related-party transaction policy can only be amended or diluted if the proposal to do so will have the support of all four independent directors of the board.
“When Sebi or any regulator and for that matter, the Ministry of Corporate Affairs (MCA) gets a complaint from somebody, it is obliged to get the response,” Damodaran explained.
“Detailed comments were made available by the company management. Looking at those responses Sebi wanted a couple of documents to be made available, they have been made available. As far as I know, as we speak today, there is nothing from Sebi or MCA which indicates any dissatisfaction with any of the explanations or responses offered by the company,” he added.
The dispute between the two promoters came to light when Gangwal wrote a letter on July 8 to market regulator Sebi, Ministry of Corporate Affairs and the BSE, where he alleged that there was lack of corporate governance at the airline and there are some questionable related-party transactions taking place between IndiGo and InterGlobe.
On the business front, the chairman said, “The fact that in spite of all of what has happened in the boardroom; call it boardroom turbulence, there has been no turbulence as far as the airline is concerned. It’s still doing as well as it did. It's doing better than it did last month. The last quarter that went by has been the best quarter and that’s a quarter when all of this was playing out.”
“The good news is we are nearly back to almost the highest price levels that the share has touched post its listing. Therefore, much of what was notionally lost has been regained which I believe is a manifestation of confidence of the shareholders that things are not as bad as they thought they would be," he added.