IndiGo Director Rakesh Gangwal to reduce his stake over the next 5 years

InterGlobe Aviation

InterGlobe Aviation Limited, which owns India’s largest airline IndiGo, on Friday, February 18, said co-founder Rakesh Gangwal has resigned as a director in the company with immediate effect.

In a letter to the IndiGo board, Gangwal said he intended to gradually reduce his stake in InterGlobe “over the next five-plus years.” His departure comes in the aftermath of differences between him and co-founder Rahul Bhatia over the running of the airline’s operations.

Gangwal, an aviation industry veteran, owns 14.65 percent of InterGlobe and wife Shobha Gangwal has an 8.39 percent stake in it.

"While new investors should benefit from the potential future growth in the Company's share price, a gradual reduction of my stake should also allow me to benefit from some of the upsides," Gangwal said in a statement. 

Gangwal's resignation and his public intent to reduce his stake in an airline he co-founded adds a fresh dimension to his long-running dispute with IndiGo's other co-founder Rahul Bhatia. Both have been locked in a battle over the running of the airline.

Earlier this month, Indigo named Bhatia as managing director,

a move that caught the airline industry by surprise because airlines typically turn to professionals to run operations.

Gangwal's resignation shows that differences between the co-founders continue to simmer.

In the letter, Gangwal said he was concerned about the optics of reducing his holding although such transactions would be undertaken only when "I do not have any unpublished price sensitive information".

"I am concerned about the optics of reducing my holdings even though such transactions would only be undertaken when I do not have any unpublished price sensitive information (UPSI). As you are aware, on an ongoing basis, the Company provides us information and some of this is UPSI," his statement added.

Gangwal also requested that no such information on the company be shared with him following his resignation as a director, adding "there should be no reason to share such information."

He kept the doors open for himself to renter the company, saying he may consider joining the board again as a member.