'Phew! I'm glad the disagreements (of the promoters) have been resolved, says the CEO of IndiGo
NEW DELHI: “… Ugh! I am glad that the disagreements have been resolved and that we can all rule out the shallow breathing produced by anxiety and take deep breaths of yoga while restoring our tranquility. Indigo Executive Director (CEO) Ronojoy Dutta released this long-awaited news to anxious employees on Monday morning indicating that the promoters Rahul Bhatia & Rakesh Gangwal They have finally declared the truce in their war of attrition.
“I need to update you on two developments within the company, both in the good news category. We had a good annual general meeting on August 27, followed by a very constructive board meeting on August 30. As you know, there were a couple of contentious issues between our two promoters which needed to be addressed. The first related to the issue of related party transactions (RPT) & the second related to the size & composition of the new board as we induct some independent directors,” Dutta, or Rono as he is known in the industry, told employees in a mail
“I am pleased to tell you that both issues have now been satisfactorily sorted out. We have made some procedural changes to our existing RPT policy & the revised policy has been unanimously approved by the board. Also, the board will be expanded to 10 members & four of the directors will be independent. These promoter differences of course never really affected the operations of the company but it is always nice when different branches of the family make peace with each other,” he added.
With the differences set aside, Rono says how the airline’s “expansion into international markets continues at a blistering pace.” “By October of this year we would have added 41 new international flights year over year, our rate of international growth would be 109% & international will come to represent 25 % of our total system … We should think of our home turf as a rough circle which extends from Delhi to Istanbul to Singapore to Hong Kong to Chengdu & back to Delhi. There is a lot of empty space within that circle & we should fill up that space in Indigo colours with a hurried impatience.”
“Thus the emotional impediment has been removed & the expansive growth into new horizons continues at high speed. Safety first, & please provide our customers with a courteous, hassle free service, both in the air & on the ground,” Rono’s mail concludes.
The signs of truce were given by Gangwal on August 23 when he had signalled approval of changes proposed by the airline. “The board has now approved a new RPT policy & to also close an open issue if the articles of association are amended at the upcoming August 27 AGM to increase the board size to 10 directors. In light of this positive & important development, I will be supporting the proposed changes to the articles,” Gangwal had said.
The two promoters — Bhatia with his family controlled InterGlobe Enterprises (IGE) & Gangwal — have had raging disagreement over the issue of Indigo entering into RPT with IGE Group companies. The other bone of contention with Gangwal was the level of control of Bhatia & IGE on Indigo . Both Gangwal & Bhatia have about 38% stake in Indigo .