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Bhatia group calls it a misinformation campaign, terms allegations ‘hot air’
Rakesh Gangwal, the co-founder of IndiGo, in a boardroom battle with partner Rahul Bhatia, has vowed to continue to raise the issue of lack of corporate governance at InterGlobe Aviation Ltd. (IGAL), the company that runs India’s biggest airline, till it is sorted out. “I am not going to rest till the issue is fixed. The government needs to look into it and the company needs a higher proportion of independent directors,” Mr. Gangwal, told The Hindu. “IndiGo is much bigger than its two promoters. Corporate governance has to improve in the company before it is too late,” he added. After filing a complaint with the SEBI on Tuesday to probe into issues at IGAL, Mr. Gangwal had camped in Delhi to meet officials of various government departments to sensitise them about the importance of corporate governance and induction of more independent directors on IndiGo’s board. According to him, Related Party Transactions (RPT) entered into between IGAL and IGE Group companies, of which IndiGo’s co-promoter Rahul Bhatia is the owner, are improper and against corporate governance norms. Any deviation from high standards, which may now appear small, could potentially lead to disintegration of the airline, Mr. Gangwal felt. The acrimony now playing out is in sharp contrast to the close friendship that once existed between the two. Mr. Gangwal was a top gun in the U.S. aviation industry having worked in United Airlines, Air France and U.S. Airways, and Mr. Bhatia, who was then handling his family’s General Sales Agent business had ambitions to make it big in aviation. As per IGE Group’s statement, Mr. Gangwal did not join the board, though he was entitled to, till IndiGo’s IPO in 2015. This indicated the level of trust between the two friends. Meticulous planning by Mr. Gangwal, starting from aircraft acquisition to route planning, and flawless execution by Mr. Bhatia, who knew how to run the business in a difficult regulated business, has made IndiGo the carrier it is today. It appears that the discomfort between them started surfacing two years ago. Initially Mr. Gangwal would make suggestions to Mr. Bhatia and which were reportedly not taken. Finally, a year ago, Mr. Gangwal started raising issues at the board level and there were times of unwanted exchanges.
