The feud between Indigo airlines’ promoters Rakesh Gangwal and Rahul Bhatia only seems to be escalating. After Gangwal had mocked the governance of India’s largest airlines, saying that even a “paan ki dukaan” managed its issues better, Bhatia has issued a counter-statement stating that “paan ki dukaan (indeed) has done well and will continue to do so.”
"Paan ki dukaan has apparently done well and continues to do well; it is financially sound; it is well run and managed by a competent set of managers. Gangwal's allegations about lack of corporate governance are much ado about nothing," the statement issued by InterGlobe Enterprises (IGE) said.
The year-long feud between the promoters erstwhile friends only came out in the public this Wednesday when Gangwal wrote to Sebi, asking the market regulator to intervene and settle the issues that had gripped the airlines.
The bone of contention for Gangwal is the Related Party Transactions-a shareholders agreement which he claims gives Bhatia extraordinary controlling powers of Indigo. In this regard, Ganwal has been seeking an Extra-Ordinary General Meeting to put in place reasonable procedures and safeguards with respect to Related Party Transactions with Bhatia.
Bhatia, who has previously refused to hold EGM saying, "genesis of Gangwals' angst was his "hurt ego" and refusal of IGE Group to entertain his "unreasonable demands", has now in a fresh statement said that there was no abuse of rights and Gangwal's proposal for convening an Extraordinary General Meeting (EGM) was rejected on the basis of a "legal opinion" obtained by the board of InterGlobe Aviation.
"Corporate governance is not about levelling baseless charges. It is about ensuring that the company's interests as also those of other stakeholders are protected and not harmed," InterGlobe Enterprises said in a statement.
Bhatia in his defence also noted that Gangwal failed to give even one instance where there has been any misuse of any such right.
"Has there been any stripping of assets or profits? Has there been any misfeasance or fraud? While he emits volumes of hot air about RPTs (Related Party Transactions), he ends up giving one example of what he believes demonstrates that there may have been something which did not meet arm's length criteria – and that example is factually wrong," the statement noted.
Citing the success of the company without Gangwal’s presence on the board, the statement said, "It was not until June 2015 (prior to the IPO) that Gangwal finally joined the Board. By 2015, IndiGo had established itself as the most successful airline ever in India. It had matured into a great institution with apparently good corporate governance without the benefit of Gangwal's presence on the board," it added.
(With inputs from PTI)