IndiGo co-promoter Rakesh Gangwal on Friday resigned as a member of the board of directors of the airline’s parent company InterGlobe Aviation, reported The Economic Times. In his resignation letter, Gangwal said that he would “slowly” reduce his equity stakes in the company over the next five years.
Gangwal and Indigo’s co-promoter Rahul Bhatia have been in a dispute for two and a half years.
The matter came to light after in a letter dated July 8, 2019, Gangwal alleged that there were severe governance flaws in the way Bhatia was running the company. Gangwal owns 37% of the InterGlobe Aviation’s stakes, while Bhatia owns 38%, according to PTI.
In his resignation letter, Gangwal said that he has been a shareholder of the parent company for over 15 years and it was natural for him to think about “diversifying his holdings”.
“While new investors should benefit from the potential future growth in the company’s share price, a gradual reduction of my stake should allow me to benefit from some of the upside,” he said. “Like any plans, future events my impact my current thinking.”
The promoter said the company provides him with unpublished price sensitive information and the only way to stop that was for him to step down as the director.
The Securities and Exchange Board of India defines unpublished price sensitive information as any information that “is not generally known or published” but if published or known “is likely to materially affect the price of securities of that company in the market”.
“Sometimes in the future, I shall consider participating again as a board member,” he added.
Feud between Indigo promoters
To resolve the dispute, both the promoters had moved the London Court of International Arbitration in 2019.
The court passed an order in September last year after which InterGlobe Aviation held a general meeting in December.
The dispute was about informing the other promoter if one of them wanted to sell their stakes in the company. According to the company’s article of association, in the event of one of the promoters selling his stake, the other one had the first right to the shares.
This clause was removed from the article of association at the December meeting.
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