The saga is far from over. Even as the IndiGo management tried to play down the spat between the two founders of the airline and passed resolutions to restructure the board and introduce more accountability, promoter Rakesh Gangwal isn’t happy with the changes.
Gangwal had earlier suggested that the number of board members be increased from six to seven, the IndiGo management decided to increase the number to 10 but Gangwal alleges that there are loopholes which will tilt the decision making in favour of his partner Rahul Bhatia.
“The AGM notice, along with unnamed sources having planted press reports that the chairman has brokered peace and matters have been resolved, leaves a misleading and false impression that issues on RPTs and changes to the Articles have the support of both promoter groups," Gangwal said in his letter to IndiGo’s board. “This is in stark contradiction to the numerous emails exchanged since July 20, and my July 27th email to board members."
It was decided in July that IndiGo will have a 10 member board. The new construction of board will have five nominations from Bhatia, one from Gangwal and four from independent directors. Gangwal claims that he later realised that there’s excessive power in favour of Rahul Bhatia’s company which could pass any decision it wants using those loopholes.
“Subsequent to the board meeting and in finalizing the language on the Articles, all of us realized that the proposed board structure created a large loophole that gives the IGE Group additional powers that they do not have today. Essentially, when there are less than four independent directors, it would allow the IGE Group to pass any company policy that they want," said Gangwal.
“However, IGE Group has steadfastly refused to close this large loophole after the transition period. It is inevitable that in the future, there will be periods of a few months when we will have less than 4 independent directors (retirements, resignations, etc.). And, for these situations we have not resolved the governance loophole," added Gangwal.