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InterGlobe Aviation’s non-executive, non-independent director Rakesh Gangwal on Friday has tendered his resignation from the company’s board with immediate effect.
He will gradually reduce his stake in InterGlobe, parent of the country’s largest airline IndiGo, over the next five-plus years, Gangwal said in his resignation letter while adding that a gradual reduction of his stake will also allow him to benefit from some of the upside.
“I have been a long-term shareholder in the Company for more than 15 years and it’s only natural to someday think about diversifying one’s holdings. Accordingly, my current intention is to slowly reduce my equity stake in the Company over the next 5 plus years. While new investors should benefit from the potential future growth in the Company’s share price, a gradual reduction of my stake should also allow me to benefit from some of the upside. Like any plan, future events may impact my current thinking.
“However, I am concerned about the optics of reducing my holdings even though such transactions would only be undertaken when I do not have any unpublished price sensitive information (UPSI). As you are aware, on an ongoing basis, the Company provides us information and some of this is UPSI. Being a co-founder, co-promoter and director, this issue takes on great significance,” said the co-founder of IndiGo.
On February 4, InterGlobe Aviation announced the appointment of co-founder Rahul Bhatia as the Managing Director with immediate effect.
“Bhatia shall not draw any remuneration from the company during his tenure as the Managing Director,” the company had said.
In the past, Gangwal had accused Bhatia of corporate governance lapses. The founders were embroiled in a bitter public dispute over a 2015 shareholder agreement that Gangwal said gave Bhatia control over IndiGo despite the similar size of their stakes.
They buried the hatchet in December 2021 when shareholders of InterGlobe Aviation have voted to scrap a clause in the articles of association (AoA) that gives the airline’s two promoters a right of first refusal (RoFR) over the acquisition of each other’s shares.
The differences between the promoters became public in July 2019 after Gangwal wrote to the Securities and Exchange Board of India, seeking its intervention to address corporate governance lapses at the company. Bhatia’s IGE Group had rejected the allegations. In 2019, both sides had initiated arbitration to resolve the dispute.
Gangwal and his related entities own around 37% stake in this company. Bhatia and his related entities own around 38% in InterGlobe Aviation.
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