MC EXCLUSIVE SEBI examining whether IndiGo’s parent failed in disclosures; board’s role also under scrutiny

SEBI examining whether IndiGo’s parent failed in disclosures; board’s role also under scrutiny

The pilot duty time limits crisis at IndiGo, which triggered massive flight cancellations and widespread inconvenience for passengers, has now come under the lens of the Securities and Exchange Board of India (SEBI) and exchanges. The regulator is probing whether InterGlobe Aviation, IndiGo’s parent company, failed to make required disclosures.

According to sources, SEBI is conducting an assessment and may seek formal explanations from the company if preliminary findings indicate lapses. One source said, “The disclosure issue is under examination and the role of the board committees is also being examined. Minutes of the board committees concerned is being reviewed.”

The same person cited above further added, "Exchanges have also been asked parallelly to do their assessment on lapses and submit findings to the regulator". The source further added, “exchanges are the first line of regulator, and they must ensure that listed entities follow the SEBIs LODR norms”.

Another person aware of the development stated, “The minutes of the board and committees will give a clue whether board was aware of the impending situation or not? If board was aware then what steps were discussed and planned to deal with the issue?”.

Concerns over possible disclosure violations were first raised by former SEBI executive director and Stakeholders Empowerment Services (SES) founder JN Gupta. The SES report noted, “SEBI should examine whether under LODR Regulations, Indigo was required to disclose show-cause notice issued by DGCA on 11th August 2025 for using ‘non approved full flight simulators’? Even show cause issued by DGCA on 6th December has not been disclosed to exchanges.”

The SES report also offered a sharp critique of InterGlobe Aviation’s board. Despite clear warning signals and regulatory obligations, SES said the board and its sub-committees, particularly the Risk Management Committee (RMC) and the Stakeholders Relationship Committee, failed to foresee or manage the crisis. It questioned why a Crisis Management Group was constituted only after the situation escalated, suggesting that board minutes may reveal that early signs of non-compliance were either discussed or overlooked. SES also asked what actions the RMC took to assess and mitigate the looming operational risks.

SES questioned IndiGo’s Board, asking whether it failed to foresee mass cancellations and delays despite operating at such scale. It argued that a board of seasoned leaders could not have been unaware of FDTL norms and would have seen compliance gaps emerging. “What did they do?” SES asked pointedly.

A similar position was taken by another proxy advisory firm, Institutional Investor Advisory Services India Limited (IiAS), which said that IndiGo’s board “has failed not only in managing the crisis but also in taking responsibility for a problem largely of its own making.”

Besides Group MD Rahul Bhatia, IndiGo’s board includes high-profile names such as former Niti Aayog CEO Amitabh Kant, ex-Shell India Chairman Vikram Singh Mehta, senior lawyer Pallavi Shroff, former IAF Chief BS Dhanoa, and former SEBI Chairman M Damodaran, a respected governance expert who runs Excellence Enablers.

According to IiAS, the board allowed the situation to worsen, reflecting shortcomings in risk management, stakeholder oversight and operational supervision. The firm noted that forming a crisis committee only after recovery efforts had begun was both delayed and inadequate. It described the board’s failure to respond to regulatory changes until they resulted in a crisis as irresponsible and warned of consequences that could strain relations with regulators, customers and employees. IiAS concluded, “Someone needs to step up and demonstrate leadership ,  it will be a shame if it is the regulator and not the board.”

In a statement issued on Wednesday, InterGlobe Aviation’s non-executive chairman Vikram Singh Mehta apologised for the hardship caused to customers and other stakeholders. He dismissed suggestions that the situation was engineered to influence government rules and said the board had remained actively engaged throughout. Mehta stated, “There has also been a claim that the Board was not engaged. This is not correct. The Board has been closely involved with this matter for many months. Both the Board and the Risk management committee have received relevant information from the management on the implementation of the rules.”

Emails sent to SEBI and InterGlobe Aviation seeking comment did not receive a response.

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