Rakesh Gangwal, the billionaire co-founder of budget airline IndiGo, will support company proposals at a shareholder meeting next week to expand its board after an agreement on policy changes, months after he accused his fellow co-founder of corporate-governance lapses.
The board of IndiGo, Asia's biggest budget airline by market value, has approved a new related-party transaction policy, Mr Gangwal said in a statement late on Friday. Mr Gangwal now intends to support a move to expand the company's board to 10 directors at its annual general meeting scheduled for August 27, reversing his earlier stance.
"In light of this positive and important development, I will be supporting the proposed changes to the Articles," Mr Gangwal said in a statement posted on his website on Friday. "While much work lies ahead, including mending some fences and the regulators completing their investigations on the governance issues raised with them, it is gratifying to see progress towards better governance."
Mr Gangwal had accused co-founder Rahul Bhatia, of corporate-governance transgressions at IndiGo, and said "unusual controlling rights" held by Mr Bhatia had allowed him to push through related-party transactions in violation of rules. Mr Gangwal opposed expanding the board unless there were changes to the company's structure, claiming otherwise it would give Mr Bhatia even more power.
Once the chief executive officer at US Airways, Mr Gangwal and his affiliates own about 37 per cent of InterGlobe Aviation Ltd., which operates IndiGo, while his co-founder's company holds a little more, at 38 per cent. In 2005, Mr Gangwal teamed up with Mr Bhatia -- a former airline sales agent -- to create IndiGo, which quickly outpaced rivals to control almost half of the Indian market, and made both founders billionaires.
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