Mumbai, Feb 25 (IANS) Shares of InterGlobe Aviation, the company which runs Indigo, fell nearly 5 per cent on the BSE over reports that market regulator Sebi has found several undisclosed related-party transactions (RPTs) between InterGlobe Enterprises and IndiGo. However, the company denied the report in an regulatory filing.
According to reports that impact the stock price of the company, Sebi found several related-party transactions that were not disclosed to the company’s audit committee and shareholders.
The issue of related-party transactions had become a bone of contention between IndiGo co-founders Rakesh Gangwal and Rahul Bhatia. The feud between the two came to light on June 8 last year after Gangwal wrote a letter to market regulator Sebi raising issues related to RPTs and corporate governance.
While Gangwal and his family hold 37 per cent stake in the company, Bhatia and his family control 38 per cent in the country’s largest private carrier with nearly 50 per cent market share on local routes.
In his letter, Gangwal had alleged that basic governance norms and laws were not being followed by the company apart from questionable RPTs. He said the lapses, if not corrected, will lead to unfortunate outcomes.
Highlighting that Bhatia has unusual controlling rights over IndiGo with the right to appoint three out of six directors besides MD, CEO and President, Gangwal implied that such rights were not being exercised fairly.
InterGlobe Aviation closed 4.68 per cent lower by Rs 67.60 a share to Rs 1,376.70 per share.