IndiGo Airlines (6E, Delhi International) parent InterGlobe Aviation has again refuted all charges of violating corporate governance and listing disclosure norms in its related party transactions, following reports of a preliminary probe by the Securities and Exchange Board of India (SEBI) that suggested such violations, the Indian financial daily Mint reported.
The company has potentially been facing a SEBI probe since a public spat emerged in May 2019 between two co-founders, Rakesh Gangwal and Rahul Bhatia. In July, 36.64% shareholder Gangwal asked the regulator to investigate alleged corporate governance shortcomings at the LCC.
He alleged that InterGlobe Enterprises (IGE) Group, a vehicle for Bhatia and affiliates which owns a stake of around 38%, enjoyed "unusual controlling rights over IndiGo" with the right to appoint three out of six directors at the airline as well as the chairman, managing director, president, and CEO.
InterGlobe Aviation has denied these claims. It has robust processes for ensuring dealings with related parties, it assured this week, adding that it had not received any communication from the SEBI regarding the outcome of any preliminary enquiry by the regulator.
"Further, IndiGo strongly denies any allegations of wrongdoing or avoidance of processes. It reiterates that it has strong processes for ensuring arm's length dealings with related parties and that such transactions were entered into in the ordinary course of business and were in the best interests of IndiGo," Ronojoy Dutta, IndiGo's whole-time director and chief executive, said in a statement.
"If and when SEBI conveys to IndiGo any outcome of an enquiry, IndiGo being confident of its compliance record will deal with it appropriately," he added.
The watchdog has reportedly been conducting a thorough probe into the affair, in which all agreements between the two warring founders as well as those between the company and its investors and associates are being scoured, according to Mint.
