IndiGo cofounder Rahul Bhatia takes partner Rakesh Gangwal to court in Florida
Bhatia has filed the plea seeking information about Gangwal’s alleged breach of shareholders' agreement.
According to the application for the case filed in a district court of Florida, the “documents and testimony” obtained from Gangwal will be used in a case Bhatia has separately filed on the alleged shareholder agreement (SHA) breach in the London Court of International Arbitration (LCIA), India.
“Petitioners seek to obtain documents and testimony related to breaches by Gangwal and/or the other members of the RG Group (owned by Rakesh Gangwal and affiliates) of the Second SHA and their obligations to perform the Second SHA in good faith under Indian law,” it said.
ET has reviewed a copy of the application.
The requested documents and information specifically relate to events, time periods, and relationships that Gangwal or his group “exploited to mount a campaign to dilute the critical controlling rights” of Bhatia’s IGE Group, it said.
Bhatia and IGE Group had first filed a case in the Florida court on October 15. It was closed the following day only to be refiled the same day, according to records on the district court website.
On October 15, Bhatia and IGE Group had also filed a similar petition in Maryland District Court against IndiGo’s independent director Anupam Khanna who had allegedly “acted in concert” with Gangwal in his breach of the shareholders’ agreement. A subsequent subpoena from the court sought to extract documents of Khanna’s correspondence with Gangwal.
Gangwal, since July this year, wrote letters to India’s capital markets regulator Sebi, the finance ministry and the Prime Minister’s Office, seeking an intervention on several contentious issues including: unusual shareholders’ rights—the selection and appointment of IndiGo’s chairman and key management personnel—enjoyed and allegedly misused by Bhatia; irregularly signed related party transactions between IndiGo and companies affiliated to the IGE Group such as Accor Hotels; and other issues such as the absence of a woman director. The letters were made public.
Gangwal later also set up a website to post regular updates on his feud with Bhatia and the issues therein.
There were subsequent board meetings where most of the issues were discussed and resolved, giving the impression of a truce between the two partners.
The impression was shattered when Bhatia moved LCIA in New Delhi on October 1. It alleged that Gangwal’s letters to the government and other actions have been a “public campaign” to protest Bhatia’s controlling rights in the company and a breach of the shareholders’ agreement.
According to the shareholders’’ agreement, LCIA is the court to be approached in the event of any arbitration related to the agreement.
An email sent to an IGE spokesperson remained unanswered as of press time Tuesday. Gangwal refused to comment.
The application Bhatia filed in the Florida court describes Gangwal as an “American businessman” who resides in Miami-Dade, Florida, and in Fairfax, Virginia. His RG Group, consisting of himself, his wife and their Chinkerpoo Family Trust, has business in Florida.