SEBI Finds Prima-Facie Violations Of Norms In IndiGo Related Party Transactions
A preliminary investigation by the Securities and Exchange Board of India suggested prima-facie violations of corporate governance and listing disclosure norms in certain related-party transactions involving IndiGo's parent firm InterGlobe Aviation Ltd., sources said.
The company, however, said it has not received any communication from the markets regulator. SEBI has been looking into IndiGo’s affairs since a dispute between the airline’s co-founders over related-party transactions became public last year.
Sources said that a preliminary probe has now suggested violation of certain listing disclosure norms and fair corporate governance practices at the company.
"We would like to state that the news item published in some media reports is factually incorrect and the company has not received any communication from SEBI in this regard," IndiGo said in a filing to the Bombay Stock Exchange.
There was no official word on the probe from SEBI. All agreements between the two founders—Rakesh Gangwal and Rahul Bhatia—as well as those between the company and its various investors and associates, including related parties, are being looked into by the markets 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 independent directors, the sources said.
The differences between Gangwal and Bhatia came to the fore in July 2019 after the former sought SEBI’s intervention to address alleged corporate governance lapses at the company. In the wake of the feud, arbitration proceedings are also going overseas between the two promoters.
Last month, InterGlobe Aviation's shareholders rejected a proposal of Rakesh Gangwal to amend the company's articles of association.
Rakesh Gangwal Group and related entities hold 36.64 percent stake in IndiGo while Bhatia and affiliates —InterGlobe Enterprises Group—have around 38 percent shareholding in the company.