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IndiGo shareholders reject amending Article of Association: Reports

IndiGo held its extraordinary general Meeting (EGM) today to discuss deletion of rules that make it tough for the main shareholders to sell or buy shares in the company. But for the resolution to be approved, Gangwal needed the support of Rahul Bhatia-led group who holds 38.3 per cent along with family in the airline's holding company Inter Globe Aviation.

ET Online|
Last Updated: Jan 29, 2020, 05.45 PM IST
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Gangwal
Differences between the promoters cropped up when Gangwal had raised questions over corporate governance practices at IndiGo alleging violation of Related Party rules by fellow promoter Rahul Bhatia-led group.
IndiGo shareholders have rejected amending the Article of Associaltion, according to reports,

Reports suggest that shareholders were upset with Rakesh Gangwal's absence from the meeting. He had called for the shareholders meeting to amend the Article of Association.

IndiGo held its extraordinary general Meeting (EGM) today to discuss deletion of rules that make it tough for the main shareholders to sell or buy shares in the company. But for the resolution to be approved, Gangwal needed the support of Rahul Bhatia-led group who holds 38.3 per cent along with family in the airline's holding company Inter Globe Aviation.

The shareholder agreement had expired on November 10, 2019. The shareholders' agreement between Rakesh Gangwal and Rahul Bhatia gave the Right of First Refusal to both the promoters on each others' shares. The shareholders' agreement also contained the tag along clause that allowed a minority shareholder to exit along with a major shareholder who is selling his stake in the company.

The provisions of the agreement expired on the fourth anniversary of the IPO, that is, on November 10, 2019, except the clause that granted Rakesh Bhatia controlling rights over the airline. The Article of Association needed to be amended to reflect the expiry of shareholders' agreement and for removal of Right of First Refusal.

Differences between the promoters cropped up when Gangwal had raised questions over corporate governance practices at IndiGo alleging violation of Related Party rules by fellow promoter Rahul Bhatia-led group.


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