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IndiGo says have responded to all Sebi queries on related party transactions

On Tuesday, sources told PTI that a preliminary probe by Sebi has suggested prima-facie violations of corporate governance and listing disclosure norms in certain related party transactions involving InterGlobe Aviation.

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Last Updated: Feb 26, 2020, 07.42 PM IST
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Reuters
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After falling nearly 2 per cent during the day, shares of IndiGo managed to recoup the loss and closed with a gain of over 1 per cent on Wednesday.
New Delhi: IndiGo on Wednesday said it has responded to all queries from markets regulator Sebi regarding related party transactions and asserted that they were entered into in the best interests of the company.

InterGlobe Aviation, parent of the country's largest airline IndiGo, also said it has strong processes for ensuring arm's length dealings with related parties.

On Tuesday, sources told PTI that a preliminary probe by Sebi has suggested prima-facie violations of corporate governance and listing disclosure norms in certain related party transactions involving InterGlobe Aviation.

In a statement, IndiGo Whole Time Director and CEO Ronojoy Dutta said it has not received any communication from Sebi regarding any outcome of any preliminary enquiry by the regulator.

"Further, IndiGo strongly denies any allegations of wrongdoing or avoidance of processes. It reiterates that it has strong processes for ensuring arm's length dealings with related parties and that such transactions were entered into in the ordinary course of business and were in the best interests of IndiGo," he said.

According to him, IndiGo has responded to all queries from Sebi regarding these matters and remains confident that its position would be accepted.

"If and when Sebi conveys to IndiGo any outcome of an enquiry, IndiGo being confident of its compliance record, will deal with it appropriately," he added.

IndiGo has been facing a probe by the Securities and Exchange Board of India (Sebi) ever since a public spat came to light between two founders of the airline, including over certain related party transactions involving one of the warring promoters.

The watchdog has been conducting a thorough probe into the IndiGo matter. All agreements between the two warring founders as well as those between the company and its various investors and associates, including related parties, are being looked into by the regulator.

The probe has suggested that some of the related party transactions could have been significant and required detailed disclosures and greater vetting by board committees comprising of independent directors, the sources had said.

The differences between co-founders and co-promoters -- Rakesh Gangwal and Rahul Bhatia -- came to the fore in July 2019 after Gangwal sought market regulator Sebi's intervention to address alleged corporate governance lapses at the company. Bhatia has denied any wrongdoing.

In the wake of the feud, arbitration proceedings are also going overseas between the two promoters' sides.

Rakesh Gangwal (RG) Group and related entities together hold 36.64 per cent stake while Bhatia and affiliates -- InterGlobe Enterprises (IGE) Group -- have around 38 per cent shareholding in the company.

Last month, InterGlobe Aviation's shareholders rejected a proposal of Rakesh Gangwal to amend the company's Articles of Association (AoA). Generally, an AoA provides the regulations for operating a company.

After falling nearly 2 per cent during the day, shares of IndiGo managed to recoup the loss and closed with a gain of over 1 per cent on Wednesday.

On the BSE, the scrip declined 1.74 per cent to Rs 1,352.65 in early trade and later settle 1.49 per cent higher at Rs 1,397.25.

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