IndiGo Heads Towards A Major Meet On Friday Between Bhatia And Gangwal

Had there been normal circumstances, the meeting on July 19 would have been a happy rendezvous between the architects of IndiGo. India’s most profitable airline is expected to register its highest profit—more than Rs 1,000 crore. 

But on Friday, Rahul Bhatia and Rakesh Gangwal — the founders of IndiGo — will possibly face each other with deep mistrust, which the board chairman, M Damodaran, will attempt to defuse.

Damodaran has proposed to include at least two of the proposed demands made by Gangwal, according to a source in the know. The IndiGo board meeting is likely to take up the proposal of expanding the size of the board, he said.

“Besides approving the results, these two items have been included in the agenda of the meeting. This is not because of Gangwal’s demands but these issues have been deliberated for a long time in order to improve the corporate governance of the company and meet regulatory norms. Gangwal, who usually attends board meetings through video conference, is flying down from London to attend it in person this time.

Indra Nooyi, former CEO of beverage giant Pepsico, has been approached by the company to be appointed a director on the board, it is learnt. Nooyi is currently on the board of e-commerce giant Amazon.

However, despite increasing the number of directors, Bhatia-owned InterGlobe Enterprises (IGE) will continue to hold its controlling rights over the company. While the chairman is expected to propose expansion of the board to 12 members, the IGE group would get the right to appoint six directors and Rakesh Gangwal group two. Four of the directors will be designated independent. According to corporate governance norms, at least one-third of the directors should be independent. “The Article of Association (AoA) will be honoured at any cost and hence IGE’s right to appoint more directors will stay,” the source said.

However, a person close to co-promoter Gangwal said he would reiterate his demand of amending the article of association, which forces him to vote in favour of the IGE’s choice of appointing key executives. “The larger issue that Gangwal has raised cannot be rectified with Bhatia having all critical powers. Gangwal would request the chairman to include a special item to discuss the same,” the person said.