Friday, December 31, 2021

Shareholders okay tweak in IndiGo’s contentious clauses

Mumbai: The shareholders of InterGlobe Aviation, which operates domestic airline IndiGo on Thursday approved a resolution seeking an amendment to the Articles of Association (AoA) of the company, some of which give one founder the first right to purchase the other’s shares in the company if the latter decides to sell.

InterGlobe’s founders Rahul Bhatia and Rakesh Gangwal have been locked in a feud over several articles in the AoA since 2019. An amendment will lift several barriers to any sale of shares by a founder to a third party. The founders own 74.44% in InterGlobe.

Chairman M Damodaran informed shareholders that the extraordinary general meeting (EGM) had been called on receipt of a joint requisition from the promoters. Later, a filing said 99.99% shareholders voted in favour of the resolution.

The resolution also indicates that the two partners have reached an understanding on the matter.

Last year, InterGlobe’s shareholders had rejected a similar proposal by Gangwal at an EGM.

Gangwal and family together own 36.61% in the airline. Based on the airline’s market capitalisation at the end of Thursday, their shares were worth 27,899 crore.

The legal battle between the promoters began on July 8, 2019, when Gangwal wrote to the Securities and Exchange Board of India (Sebi), the Prime Minister’s Office and the finance ministry, seeking intervention on various corporate governance issues and the Bhatia Group’s control of the airline.

Gangwal had sought amendments to the AoA to remove rights of Bhatia’s IGE Group on the airline, and raised past related-party transactions, non-independence of the current chairman, and refusal to hold an EGM when he had requested, among other issues.

31/12/21 Economic Times

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