The board of InterGlobe Aviation Ltd., will seek clarification from Gangwal, who in a recently penned 14-page letter, accused independent directors of not being independent on government lapses.
As the feud between IndiGo promoters Rakesh Gangwal and Rahul Bhatia intensifies, the airline’s board is likely to question the allegations made by Rakesh Gangwal and will take up the matter on 19 July 2019, according to a media report. The board of InterGlobe Aviation Ltd., the parent company of the domestic airline, will seek clarification from the co-founder Gangwal, who in a recently penned 14-page letter, accused independent directors of not being independent on government lapses, Business Standard reported. The IndiGo board is led by former SEBI chairman M Damodaran, who is now Independent Director at the airline’s board. Anupam Khanna is another Independent Director.
Other than seeking clarification on Rakesh Gangwal’s allegations, the board will also question Gangwal as to why the matter went public instead of getting resolved at the board level, the national daily reported.
What’s happening at IndiGo?
IndiGo founders Rakesh Gangwal and Rahul Bhatia locked horns in an open-for-all feud as the former wrote a letter to the Securities and Exchange Board of India. In the 14-page letter, Gangwal raised serious concerns over IndiGo’s governance; his chief concern being “unusual” control exercises by the airline’s parent company — InterGlobe — over crucial decisions. The same day as the letter surfaced in the media, IndiGo shares saw a considerable dip. Further to this, CEO Ronojoy Dutta tried to assuage employee fears and said that “difference of opinion” between its promoters will not hamper the functioning of the airline. He also assured them that the issue will be sorted eventually. Meanwhile, SEBI has started its probe and summoned IndiGo’s company secretary Sanjay Gupta.
On the other hand, Rahul Bhatia, the second co-founder, denied the accusations made by Gangwal and instead blamed him for trying to dilute the rights of InterGlobe. He also said that Rakesh Gangwal limited his financial risks. He added that Gangwal was making insidious efforts to create an unseemly controversy about corporate governance. Previously, Bhatia had also issued several points rebuttal to Gangwal’s claims.