Usually, annual general meetings (AGMs) of IndiGo are as low key as the promoters of the largest airline in the country. So, Rahul Bhatia and Rakesh Gangwal often gave it a miss, letting then president Aditya Ghosh face angry shareholders complaining about lack of chai-biscuit or get the glory all by himself.
Tuesday’s AGM, where all resolutions put to vote were passed with heavy majority, was quite different. As a show of strength, Bhatia was present with his wife Rohini (a director on the board) and son Madhav. He chaired the meeting flanked by M Damodaran, who was accused of not fulfilling responsibility of an independent director by co-promoter Rakesh Gangwal recently. At the AGM organised in New Delhi on Tuesday, neither Gangwal nor independent director Anupam Khanna were present. Both had raised questions about the company’s corporate governance standards. Voting result, which came late night, however showed that Gangwal had backed the resolutions, in a sign of truce for now.
But before the result was out, shareholders’ anger was evident. “Promoters are like maai-baap to shareholders. Here the promoter is insulting his own children by calling the company paan ki dukaan (betel shop), and now he’s skipping the meeting too. The company should seek response from him over his actions which caused massive erosion in shareholder wealth,” said Jehangir Batiwala, a shareholder of the company since its public listing in 2015.
In a July letter to the market regulator Sebi, Gangwal had alleged questionable transactions between partner Bhatia’s privately held Interglobe Enterprises Ltd and the airline, citing violations of governance regulations and the company’s code of conduct. Bhatia had countered saying Gangwal’s real agenda was “to dilute and diminish the controlling rights of the IGE Group”.
At the AGM, Bhatia was in his elements, ready with one-liners to calm shareholders down. “Main hoon na,” he said responding to shareholders’ worry about Gangwal’s conduct, borrowing from a Bollywood hit.
When Dinesh Kukreja, a shareholder for three years, suggested that the promoters should take a holiday together to iron out the difference, Bhatia asked “Aap chalenge humare sath” (will you come along).
Chief Executive Officer Ronojoy Dutta said the airline had not found a single related-party transaction that wasn’t at an arm’s length or not in the interest of the company. All of them, he said, were unanimously approved by the board’s audit committee.
“I can assure you that I have taken a close look at all transactions and have not found a single instance where the related party transactions were not approved by the audit committee. There are RPTs which are beneficial for the company. Why should we get out of it?” Dutta said.
However, some were not impressed with the response. “The dispute needs to be solved between the promoters amicably so that the company can grow. While Gangwal has now agreed on most issues, he himself has not attended the meeting, which is hurting us,” said Anil Parekh, who has 125 shares of the company.
“Whatever the issue, he should have come before the shareholders and put his perspective forward.”
Gangwal had said last month he would vote against the resolutions of the board expansion at the AGM. His reason was there would be times when the company may have less than four independent directors due to retirement and resignation.
This, Gangwal felt, may give partner Rahul Bhatia disproportionate power to pass any policy.
But last week he said he would support the resolutions after the company's board agreed that in future no important policy level decisions would be taken unless the board was present in full strength.