Shares of InterGlobe Aviation, operator of the low-cost carrier IndiGo tanked more than 19 per cent after one of the company’s co-founders Rakesh Gangwal approached market regulator Securities and Exchange Board of India or SEBI over alleged corporate governance issues at the airline. The shares fell by 19 per cent to touch their lowest since March at Rs 1,264.85 per share on NSE. The shares of the airline had opened at Rs 1,409.70 against the last close of Rs 1,566.30 on NSE. The InterGlobe Aviation shares opened Wednesday at Rs 1,409.20 per share against the previous close of Rs 1,565.75 per share on BSE.
IndiGo co-founder Rakesh Gangwal on Tuesday asked SEBI to intervene in the matter. He has alleged several corporate governance violations by the company’s co-founder Rahul Bhatia including matters relating to related-party transactions, the appointment of senior management personnel. “I have vigorously attempted for almost a year to persuade the company to shore up its governance standards, and all my attempts have been thwarted by the IGE Group,” Gangwal said in a letter to SEBI.
“Beyond just questionable RPTs, various fundamental governance norms and laws are not being adhered to and this is inevitably going to lead to unfortunate outcomes unless effective measures are taken today,” he further added while detailing about the gamut of events occurred in the company violating corporate governance norms. Both the co-founders Gangwal and Bhatia each own less than 40% in Interglobe, giving both co-founders a major say in its strategy and plans.
After the feud between both the promoters became public, the CEO of the airline Ronjoy Dutta said the issues between promoters have nothing to do with IndiGo and its functioning. “The issues between them will eventually get sorted out but I want to stress that these issues have nothing to do with the airline and its functioning,” Ronjoy Dutta was quoted as saying in a PTI report.
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