Indigo boardroom battle takes turn for worse

Rakesh Gangwal

Rakesh Gangwal  

Gangwal eyes change in Articles to deny Bhatia first right of refusal on equity sale

The boardroom battle between IndiGo’s two co-promoters is set to escalate in the days to come as Rakesh Gangwal has sought removal of clauses in the company’s Articles of Association that allow his rival Rahul Bhatia the right of first refusal if the former sells his stake in the company.

In a BSE filing on Friday, InterGlobe Aviation Limited (IGAL) — IndiGo’s parent company — notified that an extraordinary general meeting (EGM) is scheduled for January 29 after a request from Mr. Gangwal for passing a special resolution for deleting sections of the Articles of Association pertaining to “transfer of equity shares”, “acquisition of shares” and “other provisions on equity shares”.

RG Group, comprising Rakesh Gangwal, Shobha Gangwal and The Chinkerpoo Family Trust, collectively hold 37% shares in IGAL, while Mr. Bhatia’s company, InterGlobe Enterprises, owns a little over 38%.

“Rakesh Gangwal has sought deletion of clauses from the Articles of Association that provide the first right of refusal to the two co-promoters in case one of them seeks to transfer his share. This means, Mr. Gangwal may seek to sell his share in the company to either Rahul Bhatia’s competitor or anyone else,” said an expert on corporate law, on condition of anonymity.

At least 75% of the votes cast by shareholders will have to be in favour of the amendments sought by Mr. Gangwal in order for them to be passed.

“It is important to note that the EGM is not being called jointly, which means this is no sign of a truce. This may be a tactic to drive a hard bargain from Rahul Bhatia,” the person quoted above said.

Mr. Bhatia declined to offer a comment, while phone calls to Mr. Gangwal remained unanswered.

Qatar Airways’ Akbar al Bakr, a good friend of Mr. Bhatia, has on several occasions expressed his interest in acquiring a stake in IndiGo.

Last year, Mr. Gangwal had written to the markets regulator SEBI alleging corporate misgovernance at IndiGo.

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Printable version | Feb 22, 2020 12:50:13 PM |

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