IndiGo: Rakesh Gangwal's Allegations and the Fallout
IndiGo's Troubled History
IndiGo, India's largest airline by market share, has been embroiled in a bitter legal battle between its co-founders, Rakesh Gangwal and Rahul Bhatia.
The conflict stems from allegations made by Gangwal that Bhatia had engaged in corporate governance lapses, including related-party transactions and questionable financial practices.
Gangwal's Allegations
In July 2019, Gangwal wrote a letter to the Securities and Exchange Board of India (SEBI), outlining his concerns about IndiGo's governance practices.
Key Allegations:
- Related-party transactions with InterGlobe Enterprises, a company controlled by Bhatia.
- Excessive compensation paid to Bhatia and his family members.
- Lack of independent directors on IndiGo's board.
SEBI's Investigation
SEBI launched an investigation into Gangwal's allegations in August 2019.
The investigation is ongoing, but SEBI has already issued an interim order restraining Bhatia from selling any of his shares in IndiGo.
Bhatia's Response
Bhatia has denied all of Gangwal's allegations, calling them "baseless and malicious."
He has also accused Gangwal of attempting to seize control of IndiGo.
Impact on IndiGo's Business
The ongoing legal battle has had a negative impact on IndiGo's business.
The airline's stock price has fallen sharply, and it has been forced to cancel or delay several flights due to pilot strikes and other disruptions.
Future of IndiGo
The future of IndiGo is uncertain.
The outcome of the SEBI investigation could have a significant impact on the airline's ownership and management.
In the meantime, IndiGo's customers and employees are likely to continue to face uncertainty and disruption.
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