IndiGo Says Have Responded To All SEBI Queries On Related-Party Transactions
An aircraft operated by IndiGo, at Chhatrapati Shivaji International Airport in Mumbai, India. Photographer: Dhiraj Singh/Bloomberg

IndiGo Says Have Responded To All SEBI Queries On Related-Party Transactions

Bookmark

InterGlobe Aviation Ltd. on Wednesday said it has responded to all queries from markets regulator Securities and Exchange Board of India regarding related party transactions and asserted that they were entered into in the best interests of the company.

InterGlobe Aviation, the parent of the country's largest airline IndiGo, also said it has strong processes for ensuring arm's length dealings with related parties.

On Tuesday, sources told that a preliminary probe by SEBI has suggested prima-facie violations of corporate governance and listing disclosure norms in certain related party transactions involving InterGlobe Aviation.

Also read: SEBI Finds Prima-Facie Violations Of Norms In IndiGo Related Party Transactions

In a statement, IndiGo Whole Time Director and CEO Ronojoy Dutta said it has not received any communication from SEBI regarding any 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. Whole-Time Director and CEO, IndiGo 

According to him, IndiGo has responded to all queries from SEBI regarding these matters and remains confident that its position would be accepted.

"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.

Also read: SEBI Panel Proposes Sweeping Changes To Norms Governing Related Party Transactions

IndiGo has been facing a probe by the SEBI ever since a public spat came to light between two founders of the airline, including over certain related party transactions involving one of the warring promoters.

The watchdog has been conducting a thorough probe into the IndiGo matter. All agreements between the two warring founders as well as those between the company and its various investors and associates, including related parties, are being looked into by the regulator.

The probe has suggested that some of the related party transactions could have been significant and required detailed disclosures and greater vetting by board committees comprising of independent directors, the sources had said.

The differences between co-founders and co-promoters -- Rakesh Gangwal and Rahul Bhatia -- came to the fore in July 2019 after Gangwal sought market regulator SEBIi's intervention to address alleged corporate governance lapses at the company. Bhatia has denied any wrongdoing.

In the wake of the feud, arbitration proceedings are also going overseas between the two promoters' sides.

Also read: Related-Party Transactions: Mischief Via Subsidiaries Must Be Fixed, Says SEBI’s Working Group

Rakesh Gangwal Group and related entities together hold 36.64 percent stake while Bhatia and affiliates -- InterGlobe Enterprises Group -- have around 38 percent shareholding in the company.

Last month, InterGlobe Aviation's shareholders rejected a proposal of Rakesh Gangwal to amend the company's Articles of Association. Generally, an AoA provides the regulations for operating a company.

After falling nearly 2 percent during the day, shares of IndiGo managed to recoup the loss and closed with a gain of over 1 percent on Wednesday.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.