Sebi to seek more information from InterGlobe Aviation on Rakesh Gangwal complaint

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Published: July 22, 2019 10:13:15 PM

The board of directors have decided to amend the Articles of Association (AoA) for expanding the board by up to a maximum of 10 members, including four independent directors, it said in a regulatory filing on Sunday.

Sebi, information, InterGlobe Aviation, Rakesh Gangwal, IndiGo , IndiGo share price, IndiGo airlineThe decision was taken during the company’s board meeting on July 20. (File Photo)

Markets regulator Sebi will seek more information from InterGlobe Aviation as part of its probe into alleged corporate governance lapses, sources said. The company, parent of the country’s largest airline IndiGo, has submitted its responses to the watchdog on the issues raised by co-promoter Rakesh Gangwal in his complaint early this month.

The complaint brought the simmering differences between Gangwal and co-promoter Rahul Bhatia into the open. Since then, the company has come under the lens of Sebi as well as the corporate affairs ministry. According to the sources, responses provided by the company are more like defending the decisions taken.

After looking into the responses, the watchdog would seek more information, including minutes of audit committee meetings, the sources said. The watchdog might also seek more information from Gangwal after going through the responses provided by the company, they added.

Further, the sources said some senior company executives have already met Sebi officials and they might be called in again. Amid the feud, InterGlobe Aviation has decided to have up to 10 members on its board, including four independent directors. The decision was taken during the company’s board meeting on July 20.

Currently, the board has six members, including two independent directors. The board of directors have decided to amend the Articles of Association (AoA) for expanding the board by up to a maximum of 10 members, including four independent directors, it said in a regulatory filing on Sunday.

“The said amendment of the articles will be subject to approval of the shareholders at the forthcoming annual general meeting of the company,” it added. On July 8, Gangwal wrote to Sebi seeking its intervention to address corporate governance issues.

Flagging concerns about certain questionable related party transactions, Gangwal, in his letter to Sebi, had said shareholders’ agreement provides co-promoter Rahul Bhatia unusual controlling rights over IndiGo. Bhatia’s group has refuted the allegations.

For three months ended June, InterGlobe Aviation reported its highest ever quarterly profit of Rs 1,203.14 crore. Shares of InterGlobe Aviation rose by 3.74 per cent to close at Rs 1,518.15 on BSE Monday.

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