InterGlobe Enterprises Group is owned by fellow co-founder Rahul Bhatia.
Shares of InterGlobe Aviation, which operates the low-cost airline IndiGo, fell more than 5 percent intraday on August 6 after Rakesh Gangwal denied signing new Articles of Association (AoA), saying it was favourable to the other co-founder Rahul Bhatia.
The stock has plunged more than 11 percent in the last two weeks. It was quoting at Rs 1,461.00, down Rs 30.15, or 2.02 percent, on the BSE at 1002 hours.
The change in Gangwal's stance comes after the extended July 20 board meeting ended with the feuding partners agreeing on two things. One, the board will be expanded from six to 10 directors, and will include a woman independent director. Two, any related party transactions of more than Rs 2 crore will need the board’s nod.
But in a letter to the directors, and copied to the market regulator Securities and Exchange Board of India and Ministry of Corporate Affairs, Gangwal has said, "Subsequent to the board meeting and in finalising the language of the articles, all of us realised that the proposed board structure created a large loophole that gives the InterGlobe Enterprises Group additional powers that they don't have today."
InterGlobe Enterprises Group (IGE) is owned by Bhatia.
Seeking SEBI’s intervention, Gangwal described the 'large loophole' as: "When there are less than four independent directors, it will allow the IGE Group to pass any company policy that they want just on the basis of their board numbers being larger than all the other board members combined."
This, Gangwal argued, defeated the purpose of expanding the board. He had earlier alleged that the IGE Group was using the “usual power” vested to it through the AoAs to control the airline.
The AoAs enable Bhatia's privately held firm to nominate senior leadership of the airline, and also has more representations on the board. Gangwal's RG Group, on the other hand, has one nominee on the board.The Great Diwali Discount!
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