IndiGo Promoter Feud: Rakesh Gangwal Seeks EGM To Amend Articles Of Association

Rakesh Gangwal, IndiGo co-founder who publicly bickered with his partner Rahul Bhatia last year, wants to scrap provisions that require the airline’s controlling shareholders to seek permission from each other for buying or selling shares.

This is the second time that Gangwal has sought an EGM to amend articles of association. In a July letter, Gangwal had sought to amend the articles of association on other issues. He had raised related-party transactions and corporate governance issues and sought an EGM, which the board had then denied through a split vote.

He had written, “The unusual rights survive even after this coming November when most of the provisions of the current shareholders agreement expire, since, these rights remain embedded in the articles of association of IndiGo and will continue to survive unless the articles are amended by a vote of shareholders holding more than 75% shares”.

These rights are:

• right to appoint 3 out of 6 directors of IndiGo.
• “The chairman of the Board shall be appointed on the nomination of the IGE Group ...”
• right to nominate and appoint the managing director.
• right to nominate and appoint the CEO.
• right to nominate and appoint the president.
• a voting arrangement that requires me and my affiliates to vote alongside the Interglobe Enterprises Group on the appointment of directors.

This matter is under arbitration.