As the infighting between the founders of IndiGo airlines came out open, the share price of the airline has been dropped 19 % on Wednesday.
It is learnt that the infighting between the founders Rakesh Gangwal and Rahul Bhatia has become obvious with Rakesh Gangwal sought the intervention from the SEBI, country’s securities regulator, to solve the alleged corporate governance issues inside the company. IndiGo plunged as much as 19.24 per cent to Rs. 1,264.85 in Mumbai trading Wednesday to its lowest level in almost three months.
Rakesh Gangwal, the billionaire co-founder of budget carrier IndiGo, has sought intervention from the country's securities regulator to resolve alleged corporate governance issues at Asia's biggest low-cost airline by market value.
The board of InterGlobe Aviation Ltd., which operates IndiGo, has received a letter dated July 8 from Mr Gangwal, informing the company that he has sought help from the Securities and Exchange Board of India(SEBI), according a stock exchange filing by the carrier on Tuesday, according to an NDTV report. It is learnt that the SEBI has asked the company to respond to the letter by July 19.
"Today, IndiGo is at a watershed moment," Mr Gangwal said in the letter to Sebi, which was released both by IndiGo and Mr Gangwal, and was copied to a bunch of politicians and bureaucrats, including Prime Minister Narendra Modi. "It has started veering off from the core principles and values of governance that made IndiGo what it is today."
The other co-founder Rahul Bhatia has not been responded till now towards the controversies. Mr Gangwal said Mr Bhatia, with whom he founded IndiGo in 2005, has "unusual controlling rights" over the airline due to a shareholders' agreement, and is "building an ecosystem" of other companies that enter into related-party transactions. The founders were in talks over issues including paying rent for the airline's headquarters, which is owned by Mr Bhatia's InterGlobe Enterprises Ltd., and crew staying at hotels where InterGlobe Enterprises has a stake, Chief Executive Officer Ronojoy Dutta told CNBC-TV18 last month. Mr Gangwal had previously said he had no desire to take control of the airline.