IndiGo promoter Rakesh Gangwal resigned from the Board of Directors of InterGlobe Aviation as non-executive, non-independent director on Friday. In a letter to board members, Gangwal said he was "stepping off the board effective immediately".
"It is my intention to gradually reduce my stake in InterGlobe over the next five-plus years," Gangwal said. "I have been a long-term shareholder in the company for more than 15 years and it's only natural to someday think about diversifying one's holdings."
He, however, has left the possibility of joining back the board open.
"I ask that no company information be shared with me that is unpublished price sensitive information (UPSI). Sometime in the future, I shall consider participating again as a board member."
On February 4, the board approved the appointment of co-founder and promoter Rahul Bhatia as the company's managing director.
The appointment was seen by many as indicating a truce between co-founders and promoters Bhatia and Gangwal after a dispute over shareholders agreement.
The announcement of Bhatia as MD was made after the airline reported a net profit of Rs 129.8 crore on a year-on-year basis for the October to December period of the financial year 2021-22.
Here is the text of his letter to the board:
"Dear Board Members,
February 18, 2022
I continue to be a big believer in the long-term prospects of IndiGo and more so now with the industry consolidation underway. Under this backdrop and in the long-term, Indian aviation should prosper, as in various other parts of the world.
I have been a long-term shareholder in the company for more than 15 years and it's only natural to someday think about diversifying one's holdings.
Accordingly, my current intention is to slowly reduce my equity stake in the company over the next five plus years. While new investors should benefit from the potential future growth in the company's share price, a gradual reduction of my stake should also allow me to benefit from some of the upsides. Like any plan, future events may impact my current thinking.
However, I am concerned about the optics of reducing my holdings even though such transactions would only be undertaken when I do not have any unpublished price sensitive information (UPS). As you are aware, on an ongoing basis, the company provides us information and some of this is UPSI.
Being a co-founder, co-promoter and director, this issue takes on great significance.
After considerable thought, I see only one clear path to address this issue. Regrettably, and effective immediately, I am stepping off the Board.
Accordingly, I ask that no Company information be shared with me that is UPSI and, having stepped down as a director, there should be no reason to share such information. Sometime in the future, I shall consider participating again as a board member.
-- Rakesh Gangwal"