Wednesday, July 10, 2019

IndiGo flies into turbulence, investors must brace for a bumpy ride

The recent allegations of the Gangwal faction (RG group) against the Bhatia faction (IGE group), both promoters of InterGlobe Aviation Limited (IndiGo) with almost equal shareholding, revolved around three broad issues: (a) the Articles of Association (AoA) give the IGE group superordinate powers, (b) related-party transactions between IndiGo and the IGE group were not conducted in a transparent manner, (c) the board decided not to convene an extraordinary general meeting (EGM) at the behest of the RG group, even though they have the legal right to it. The mere suggestions of these—independent of which faction is correct—raises concerns over corporate governance standards at the board level.
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