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Last Updated : Oct 24, 2019 05:06 PM IST | Source: Moneycontrol.com

IndiGo feud: Here's all you need to know

Though they were reports of a truce in August, disagreements have cropped up again.

 
 
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The much-publicised feud between IndiGo co-founders Rahul Bhatia and Rakesh Gangwal is showing no signs of an end as the dispute reaches a US court.

IndiGo, India's largest airline, is owned by InterGlobe Aviation (IGA). Gangwal and Bhatia had founded the airline together in 2005.

Though they were reports of a truce in August, disagreements have cropped up again.

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Also Read: Interglobe Aviation Q2 net loss widens to Rs 1,062 crore

The differences became public in July when Gangwal wrote a letter to market regulator Securities and Exchange Board of India (SEBI), accusing Bhatia of violating corporate governance norms.

About the allegations, Bhatia had said 'much ado about nothing' and stated that the company is financially sound. He emphasisied that the company is run by a competent set of managers.

Also Read - Bhatia vs Gangwal: This time, the focus may be on IndiGo's shareholding

The two have also disagreed over parts of the shareholder agreement, which Gangwal says gives Bhatia greater controlling rights over the company.

Gangwal also highlighted concerns over certain related party transactions. He had also pointed that there was no independent woman director on the board, as required by corporate governance norms.

Bhatia did act on some of the grievances. The company cleared amendments to the Articles of Association, expanded the board size and appointed Pallavi Shardul Shroff as an independent woman director.

Former SEBI chief M Damodaran had said in August that the two IndiGo promoters have declared a truce, but both parties refuted the claim.

The Ministry of Corporate Affairs (MCA) is also looking into the matter, and examining whether the the allegations are a management dispute or violation of companies law.

Bhatia has now taken the dispute to courts in the US and the UK. On October 1, Bhatia initiated proceedings between Gangwal and his RG Group in the London Court of International Arbitration.

Two weeks later, Bhatia moved a US court in Florida against Gangwal, seeking damages for the legal proceedings initiated in London. The legal action was taken in Florida since Gangwal is based there.

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First Published on Oct 24, 2019 05:04 pm
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