IndiGo co-founder Rahul Bhatia has turned to the London Court of International Arbitration to resolve a long-running spat with fellow leading shareholder, Rakesh Gangwal.
Bhatia submitted a request for arbitration under the shareholders’ agreement dated 23 April 2015, with amendments made on 17 September 2015, Indigo says in a stock exchange disclosure.
Bhatia and the IGE Group are the claimants, while RG Group – comprising of Rakesh Gangwal, the Chinkerpoo family trust, and Shobha Gangwal – along with Indigo’s airline parent, InterGlobe Aviation, were named as the respondents.
“However, presently, no monetary claim, including any compensation or penalty, has been sought against the company,” says the low-cost carrier.
IGE Group is run by Bhatia and his family, and control 38% of Indigo; Gangwal and his affiliates, the RG Group, hold 37% shares.
The early signs of cracks emerged in May, from reports that RG Group was seeking to amend a shareholder agreement with IGE Group to allow it to take control of the airline. At that time, chief executive Ronojoy Dutta dismissed these as “baseless speculation”.
This, however, blew up publicly in July, when the carrier published a 49-page document detailing Gangwal’s allegations of governance improprieties, and Bhatia countering that Gangwal was using it as a ploy to take greater control of the low-cost carrier.
InterGlobe Aviation defended the related party transactions with IGE Group that Gangwal had called attention to, stressing that they were disclosed during the airline’s initial public offering in 2015, and had “ceased to exist” after the carrier went public.