InterGlobe Aviation, parent company of IndiGo Airlines (6E, Delhi International), has approved the alteration of its articles of association to increase the size of the board of directors to ten, among other decisions taken at its annual general meeting (AGM) this week. It also reappointed co-founder Rahul Bhatia as non-executive director, the Indian financial daily Mint reported.
The move to expand the board came amid a widely publicised spat between Bhatia and fellow co-founder Rakesh Gangwal, with the latter repeatedly accusing Bhatia of corporate governance lapses in recent months. Gangwal had said in a letter to the board on August 5 that he refused to support this proposal, arguing that it would benefit IGE Group - a vehicle for Bhatia that owns a 38% stake in IndiGo - by helping it to “rework and dilute” company policy on allegedly “questionable” transactions. Gangwal and his associates hold nearly 37% of the company.
Rakesh Gangwal, who lives in the US and was not present at the AGM in New Delhi, has protested that InterGlobe already possesses significant controlling rights over IndiGo, allowing it to carry out transactions. However, on August 27, the day before the meeting, Mint reported that he agreed to support the proposed changes after some of his demands, such as in the area of related-party transactions, were accepted last week.
Meanwhile, IndiGo is looking at the possibility of ordering widebodies to expand its international operations to long-haul destinations in Europe and other parts of the world, although an order is not imminent. During a conference call on the company's fourth-quarter and full-year results, CEO Ronojoy Dutta said, as reported by the newspaper Business Line: “For widebody there is nothing imminent. Are we studying it? Absolutely. But are we about to place an order or do we see something happening in the near future? No.”
