Thursday, September 05, 2019

IndiGo promoters spat: Sebi receives another complaint letter from Rakesh Gangwal, asks airline for comments

The fledgling signs of truce at IndiGo have begun to disappear as co-founder Rakesh Gangwal's legal counsel has written another letter to the market regulator Securities and Exchange Board of India (Sebi) asking it to take action with respect to rights of Rahul Bhatia's InterGlobe Enterprises group and non-independence of chairman M. Damodaran among other issues.

Taking cognisance of the letter received from Gangwal's counsel, Sebi has sought comments from the company on the matter.

"The August 30 letter reiterates certain issues that Mr. Gangwal had previously raised with the Sebi (disclosures in respect of which have been made previously) and seeks certain directions from the Sebi against the company and the IGE Group on inter alia, amendment to the Articles of Association of the Company to remove the rights of the IGE Group, past related-party transactions, non-independence of the current chairman, refusal to hold the extraordinary general meeting when requisitioned by Mr. Gangwal and certain public statements made by the CEO of the company," IndiGo informed the exchanges.

At the 16th annual general meeting held on August 27, both promoter groups voted in favour of all the resolutions, including the resolutions to amend the Articles of Association of the company to expand the size of the board to ten members and to appoint the chairman as an independent director of the company. The airline has also recently put in a place a new policy for related-party transactions.

Recently, chairman Damodaran in an interview with CNBC-TV18, had said that the market regulator and the Ministry of Corporate Affairs is not conducting any investigation with regard to the letters sent by Gangwal to Sebi and the MCA on July 8 about his concerns regarding corporate governance and RPT policy, and added that correspondence has taken place between the company and the two bodies.

"Sebi wanted additional documents, [we] have made those available to them. Nothing is pending at the company's level with regard to the concerns raised with MCA, Sebi," Damodaran had clarified.

The bitterness between the two promoters was believed to have subsided when Gangwal issued a statement signalling truce before the AGM.
05/09/19 CNBC TV18
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