IndiGo Promoter Dispute Has ‘Zero Impact’ On Airline: CEO Ronojoy Dutta
The IndiGo promoter dispute between founders Rakesh Gangwal and Rahul Bhatia relates to related party transactions at the airline.
The IndiGo promoter dispute has “zero impact" on the airline right now as the co-founders are on the same page over the budget carrier’s strategic direction, Chief Executive Officer Ronojoy Dutta said.
The differences between co-founders and co-promoters—Rakesh Gangwal and Rahul Bhatia—came to the fore in July after Gangwal sought Securities and Exchange Board of India's intervention to address alleged corporate governance lapses at InterGlobe Aviation Ltd., the operator of India’s largest airline by domestic market share.
"That has been resolved completely. Now that related party transactions have been removed from the table, we have no more interest in this matter," Dutta told the Press Trust of India in an interview in New Delhi. "Right now, it (IndiGo promoter dispute) has zero impact. When the RPT issue was there, we were involved. Now, they are doing what they do, and that doesn't affect us at all.”
According to Dutta, there are some issues between the promoters but that is not affecting the airline. "If two of the promoters are having a side discussion on some agreement signed 12 years ago, it doesn't affect us at all.”
"It (IndiGo promoter dispute) is not a overhang on the company because they agree on the direction of the company...there is such unity of view on the strategic direction of the company, really there is no controversy," he added.
On whether there are concerns about corporate governance at the company, Dutta replied in the negative. "Not a concern because the only governance issue was that of related party transactions. Otherwise, we are functioning smoothly as a well-orchestrated board. Very professionally run," Dutta said.
On Oct. 1, InterGlobe Enterprises and Bhatia sought arbitration proceedings in the shareholders' agreement dated April 23, 2015. The pact was amended on Sept. 17, 2015. The agreement was executed between Bhatia's InterGlobe Enterprises Group (IGE Group), Gangwal, the Chinkerpoo Family Trust, Shobha Gangwal —the RG Group—and InterGlobe Aviation.
On Thursday, IndiGo shares rose 2.60 percent to Rs 1,516.15 apiece on the BSE while the benchmark Sensex gained 0.42 percent to end the day at 40,286.48 points.