InterGlobe Aviation Ltd, operator of India’s largest airline IndiGo, will seek shareholders’ approval for alteration in the Articles of Assosiation (AoA) of the company at the airline’s annual general meeting (AGM) that will be held in the city on Tuesday.
The company’s co-promoter Rakesh Gangwal, who had earlier said he will oppose the special resolution at the AGM, will now support the proposed changes to the AoA of the company.
Gangwal has accused promoter Rahul Bhatia of violating corporate governance norms, questioned related party transactions and sought more independent directors on the board. Bhatia has, however, denied the allegations.
Rahul Bhatia-controlled InterGlobe Enterprises (IGE) has maintained that there are no evidence to substantiate the allegations on related-party transactions between the airline and IGE.
The disagreement had led to Gangwal opposing the special resolution at the AGM unless another resolution was passed by the board to prevent the IGE Group from attaining more power and until a new policy on RPT was adopted by the company.
After the board of directors of InterGlobe Aviation approved a new policy on related party transaction, Gangwal last week, stated his intent to support proposed changes to AoA.
“The Board has now approved a new related party transaction policy and to also close an open issue if the Articles of Association are amended at the upcoming August 27 AGM to increase the Board size to 10 Directors,” Gangwal said on 23 August adding, “In light of this positive and important development, I will be supporting the proposed changes to the Articles.”
He, however, added “while much work lies ahead, including mending some fences and the regulators completing their investigations on the governance issues raised with them, it is gratifying to see progress towards better governance”.
InterGlobe Aviation will also seek reappointment of M Damodaran as chairman of the carrier’s board of directors for another five years.
Former bureaucrat, Damodaran, was appointed the chairman of the airline’s board of directors after the death of the then chairman MD Mallya in 2018.
Incidentally, Damodaran has over the last few months found himself in the middle of a tussle between IndiGo founders Bhatia and Gangwal.
Gangwal and his associates hold nearly 37% in InterGlobe Aviation, while Bhatia’s IGE Group holds around 38%. Although the two groups own roughly similar stakes, an initial agreement gave special rights to Bhatia’s IGE Group.
The tussle between the two promoters came out in the open on 8 July when Gangwal accused Bhatia of violating corporate governance norms, among other things.
The Bhatia-controlled InterGlobe Enterprises (IGE) condemned Gangwal’s charges over issues related to governance and those involving the allegedly superior rights of the Bhatia-led group as compared with the Gangwal group in IndiGo.
“Corporate governance is not about levelling baseless charges. It is about ensuring that the company’s interests as also those of other stakeholders are protected and not harmed. Mr Gangwal fails to cite a single concrete example where any act or omission has resulted in any loss or damage to Indigo,” IGE said in a statement last month adding that Gangwal’s allegations about lack of corporate governance are much ado about nothing.
Amid the messy public spat between the airline company’s co-founders, IndiGo, however, reported an outstanding performance with net profit being about 60% higher than the Street estimates. IndiGo’s net profit for the June quarter was Rs 1203 crore compared with ₹28 crore in the same period of last year and ₹590 crore in the March quarter.
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