IndiGo Says All Third Party Deal Clean, Gangwal Skips AGM
Amid signs of truce between its warring promoters, InterGlobe Aviation, which runs private airline IndiGo, on Tuesday told shareholders in the annual general meeting (AGM) that all the related party transactions (RPTs) are at an arm's length.
Airline co-promoter Rakesh Gangwal, who earlier questioned the RPTs and sought action by market regulator Sebi, did not attend the crucial meeting. Independent Director Anupam Khanna, who has supported Gangwal on the contentious issue, was also absent.
InterGlobe shares closed at Rs 1,649 a piece, 1.85 per cent lower over the previous close on the BSE on Tuesday.
Responding to shareholders' query on the issue, IndiGo CEO Ronojoy Dutta said that value of RPTs that the company has signed with co-promoter Rahul Bhatia's firms is about Rs 156 crore and accounted for less than 1 per cent of the company's total revenues of Rs 30,000 crore.
"There is not a single case, where RPT is not at arm's length," Dutta said at the AGM.
Some of the shareholders expressed concern over erosion of value of shares due to accusations made by Gangwal. They also wanted to know why Gangwal did not attend the meeting.
The feud between the two airline co-founders, Gangwal and Bhatia, came out in the open in June this year after the former wrote a letter to market regulator Sebi raising issues related to RPTs and corporate governance. A copy of the letter was also marked to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and other top government functionaries.
While Gangwal and his family holds 37 per cent stake in the company, Bhatia and family control 38 per cent in the country's largest private carrier with nearly 50 per cent market share on local routes. It is also the biggest by fleet size.
Gangwal has alleged that IndiGo was getting into high-value RPTs with Bhatia-controlled InterGlobe Enterprise.
Following this, all the RPTs were reviewed. Citing the example of airline's corporate office in Gurgaon, Dutta said that the office is closer to a metro station and shifting the same would mean inconvenience to nearly 2,000 staff who commute by public transport.
On airline's expansion, he said that the company plans to grow its capacity by about 30 per cent a year for the next few years.
"We expect that half of that growth will go international, half will go domestic. We are very optimistic about international," Dutta said.
The IndiGo CEO noted that the flight range is currently limited due to the aircraft it operates and hence was looking at planes like Airbus 321 XLR and wide-body aircraft for future expansion.
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