Mumbai: The crisis in one of the best run airline, IndiGo, seems to be deepening with the dispute between the promoters veering out of control. The differences had been shrugged off earlier as a minor aberration by many industry experts but it now seems that the spat has snowballed into a full-blown war. Airline co-promoter and former US Airways Chief Executive and Chairman Rakesh Gangwal, who has so far remained behind the scenes, has come on record to air his grievances on various issues pertaining to the carrier.
In a showdown with co-founder Rahul Bhatia, Gangwal has alleged serious governance lapses at the company, saying even a "paan ki dukaan" (betel shop) would have managed matters with more grace. The matters have precipitated and he has asked market regulator Sebi to intervene and resolve the issue. The developments have left investors wary. The airline stock fell 0.29 per cent to Rs 1,565.75 a piece on Tuesday on the BSE. Gangwal, along with his affiliates, hold 37 per cent stake in IndiGo while Bhatia has a 38 per cent equity.Differences between the founder-partners are essentially over IndiGo's existing structure and future strategy. Crucial differences include pace of expansion, use of aircraft for overseas operations and recent management changes. According to a media report, Gangwal, a veteran aviation professional, is reportedly in favour of aggressive expansion in both Indian and international markets, whereas Bhatia, who had background in travel technology and hospitality, prefers a cautious approach.
In his letter to SEBI Chairman, Gangwal has said that IndiGo has started veering off from the core principles and values of governance that made the airline what it is today.He has raised serious objections to related party transactions in the company, stating that various fundamental governance norms and laws are not being adhered to. He has warned that this will lead to unfortunate outcomes, should effective measures not be taken. Sebi has sought a response from budget passenger carrier IndiGo on the alleged grievances raised by Gangwal.
A copy of the letter has also been sent to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman, Civil Aviation Minister Hardeep Singh Puri and Commerce Minister Piyush Goyal. After Gangwal wrote to the board seeking an extraordinary general meeting, Bhatia, on June 12, opposed the proposal. He wrote to the board alleging that the genesis of Gangwals' angst was his "hurt ego" and refusal of IGE Group to entertain his "unreasonable demands".