Bhatia vs Gangwal: IndiGo promoters line up for meeting Sebi's Ajay Tyagi

The promoters of IndiGo, the country’s largest airline by market share, are learnt to be separately meeting Securities and Exchange Board of India Chairman Ajay Tyagi.

Earlier, one of the promoters Rakesh Gangwal had written to Tyagi, raising issues linked to corporate governance lapses in InterGlobe Aviation, which runs IndiGo. Gangwal had blamed the other promoter Rahul Bhatia for alleged mismanagement in the company.  

Bhatia is expected to meet the Sebi chairman later this week, a source privy to the development said. He is learnt to have sought a meeting with the chief of the market watchdog after the company submitted its response on July 19. Sebi had asked Bhatia’s InterGlobe Aviation to reply to the allegations made by Gangwal.
 

Bhatia would like to present his side of the story to the Sebi chief, while giving him details on the mutual agreement signed by the two promoters and the cause of the spat, the source said. 

Meanwhile, Gangwal met Tyagi a few days ago, it is learnt. In his meeting, he reiterated the concerns over governance lapses in IndiGo, seeking Sebi’s intervention in addressing his grievances, the source said.

Sebi has been probing the matter since the differences between the two promoters surfaced recently over certain related-party transactions.

The board meeting of IndiGo was stretched to two days last week to deliberate on the issues raised by Gangwal and countered by Bhatia. On Sunday night, the company made a public disclosure that a decision had been taken to expand the IndiGo board to 10 directors, which was among the demands made by Gangwal. Currently, it’s a six-member board, led by former Sebi Chairman M Damodaran.

Even after hours of deliberation and the extended board meeting, the two warring promoters refused to make peace. 

While Bhatia’s InterGlobe Enterprises (IGE) wants the right to nominate five directors, Gangwal and independent director Anupam Khanna have objected to it, saying this will lead to dilution of their proportion on the board.