Acknowledging a rift between the two promoters of Interglobe Aviation — parent company of India’s largest airline IndiGo — the company’s CEO Ronojoy Dutta issued a statement Saturday on behalf of one of the two promoters, Rakesh Gangwal, saying that there was no interest or desire on part his group to take control of the company.
“I am authorised by Mr. Rakesh Gangwal to make the following statement on his behalf – ‘I am categorically and clearly stating that there is no interest or desire whatsoever on the part of the RG (Rakesh Gangwal) Group to take control of the company. Also, to put to rest the messaging on the fact that the RG Group is attempting to renegotiate the Shareholders Agreement, I am placing on record that the RG Group stands by the current SHA which, in any case, expires this October’. I don’t think Mr Gangwal could have been more clear and explicit on his intentions and I thank him for authorising me to make this statement on his behalf,” Ronojoy Dutta, the airline’s CEO noted in a press statement. Friday, The Indian Express reported that the shareholders agreement between entities controlled by Rahul Bhatia and Rakesh Gangwal — the two promoters of Interglobe Aviation — is set to expire in October this year, and an ongoing renegotiation of the same is learnt to be at the heart of the rift between the two.
The dispute is learnt to be primarily over the disproportionate distribution of board and management appointment rights between the two promoters.
As per the shareholding pattern declared by Interglobe Aviation, as of March 31, Bhatia, his family and his holding company Interglobe Enterprises held around 38 per cent stake, while Gangwal, his family and his entity held close to 37 per cent.
However, as per the agreement, upon listing of the company, Interglobe Enterprises Group (Rahul Bhatia’s entity) has the right to nominate three non-independent directors, while the Rahul Gangwal Group has the right only to nominate one non-independent director. Further, Bhatia’s group is entitled to nominate the chairman, the managing director, the chief executive officer and the president of the company. “We all know, that in any strong and well-managed company there will always be differences. And, yes, there may be differences currently on certain matters but the company has a great track record of resolving issues and coming out ahead. If the current differences were to not get resolved, you shall certainly hear about it; however, it serves no purpose speculating about it,” Dutta wrote in the statement.
Further, on the matter of management appointments at IndiGo, Dutta pointed out that “a little bit of turbulence during…transition phases is neither unusual nor unwelcome”.
“It is true that IndiGo has gone through a number of changes in a continuum that stretches from Aditya Ghosh, to Greg Taylor to a team of highly skilled expatriates to me. I can state unequivocally that every one of these senior leaders contributed a great deal to IndiGo and we are truly grateful for their contributions. But all great companies go through periods of transition as they evolve from one phase of their growth to another and a little bit of turbulence during these transition phases is neither unusual nor unwelcome,” Dutta said.