Rakesh Gangwal calls for IndiGo EGM; likely to pass amendments to company's regulations

IndiGo will hold an Extraordinary General Meeting (EGM) of its members on the request of Rakesh Gangwal-led RG Group on January 29. The EGM has been called to pass amendments to the Articles of Associations of the company as "special resolutions". The company said after it received a letter from Gangwal on behalf of the RG Group it obtained legal advice on whether there was any obligation on the board to approve the amendment to the Articles.

"The company advised that the Shareholders Agreement and the Articles do not impose an obligation on the Board and the Company's management to approve the proposed amendments to the Articles," it clarified.

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The board in its meeting on December 21, 2019, agreed to Gangwal's request of an EGM, in which the members could decide on the amendment of the Articles as requested in the shareholder letter, the statement said.

As per provisions in the Companies Act, 2013, the RG Group, which comprises Rakesh Gangwal, Shobha Gangwal and The Chinkerpoo Family Trust, has the requisite shareholding of 36.64 per cent in InterGlobe Aviation Limited, which empowers them to seeks an EGM.

Bhatia and his InterGlobe Enterprises (IGE) Group own around 38 per cent of the airline.

Also Read: IndiGo promoters' spat: Rakesh Gangwal says he prefers short-term financial pain to seeing the airline falter

Gangwal and Bhatia have been sparring over questionable related-party transactions and composition of the company's board for long. The spat between the two cofounders first emerged in July after Gangwal complained to the Securities and Exchange Board of India alleging that Bhatia indulged in questionable related-party transactions.

During the Annual General Meeting on August 27, both the promoter groups voted in favour of all resolutions, including amending the Articles of Association, expanding the size of the board to 10 members, and appointing the chairman as an independent director. Incidentally, Gangwal did not attend the IndiGo's AGM.

Also Read: IndiGo promoters' spat: Did Rakesh Gangwal throw in the towel?

Gangwal had also issued a statement, saying he was satisfied with the new related party transactions (RPTs) protocols approved by the board and was open to the amendments in the IndiGo's Articles of Association (AoA) to increase the board strength to 10. The statement came as a surprise because Gangwal agreeing to a 10-member board (and not seven as he has proposed earlier) still left his previous issue unresolved.

InterGlobe Aviation stock was trading 2% higher at Rs 1,358.40 in afternoon trade on Friday.

Edited by Manoj Sharma