Amid Bhatia, Gangwal spat, CEO Ronojoy Dutta is trying to assuage employee fears by saying that the “difference of opinion” between its promoters will not hamper the airline’s functioning.
Amid the open-for-all feud that has erupted between IndiGo’s two promoters Rakesh Gangwal and Rahul Bhatia, CEO Ronojoy Dutta is trying to assuage employee fears by saying that the “difference of opinion” between its promoters will not hamper the airline’s functioning. He also said that the issue will be sorted eventually. However, if Gangwal’s accusatory letter is to be believed, the matter is now not in the hands of either of them and is far from getting sorted. In a 14-page letter to capital markets regulator SEBI, IndiGo’s Rakesh Gangwal has raised serious concerns with the governance at the company; his primary concern being the excess control that IndiGo’s parent company InterGlobe exercises over crucial decisions in the airline. On Bhatia’s part, he denied the accusations and instead blamed Gangwal for trying to dilute the rights of InterGlobe.
Rakesh Gangwal went to the extent of saying that “paan ki dukaan” would have handled the matters with more grace. He also flagged concerns with Related Party Transfers (RPT) and their credibility. Previously, IndiGo CEO Ronojoy Dutta had explained the issue as “administrative” altercation and said that the issue at hand is about RPTs. Further, he said IndiGo’s parent company — Rahul Bhatia’s Interglobe — provides various services such as lodging, office space to the airline and the domestic carrier pays IGE (InterGlobe Enterprises) for the same. Rahul Bhatia’s InterGlobe provides travel, aviation and hospitality related services. IndiGo crew sometimes uses these services for stays at IGE operated Novotel and Sheraton hotels, Ronojoy Dutta had earlier said in an interview to a media channel.
The same has been questioned by Rakesh Gangwal, who in his 14 pages letter to SEBI said: “I hadn’t contemplated that over the years, Mr Bhatia would start building an ecosystem of other companies that would enter into dozens of related party transactions with IndiGo.”
However, the issue transcends questionable RPTs. In the same letter, Gangwal said that the gamut of fundamental governance norms and laws are not being adhered to, asserting that the same will result in unfortunate outcomes for the company. Gangwal also alleged violations of SEBI regulations, not holding Extraordinary General Meeting of shareholders, diminishing and taking away the authority vested by SEBI to the Nomination and Remuneration Committee (NRC) and selecting independent chairman from the single option nominated by IGE, along with unusual right such as control over appointment of half the directors, chairman, MD and CEO by IGE.