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Boardroom Battles & Corporate Governance Turbulence at Indigo - A Case Study

Research Article

Authors: Dr. Aruna Polisetty, Vijaya Kittu Manda

Journal Name: Journal of Management & Public Policy; ISSN: ISSN (Print): 0976-013X; ISSN (Online): 0973-0148

Publisher: Management Development Research Foundation

Volume Number: 11 (1)

Publication Date: 2020

Pages: 19-27

Journal Paper Link on Publisher Website

Abstract: IndiGo, the airline services arm of InterGlobe Aviation Limited, was co-founded by Rakesh Gangwal (Gangwal) and Rahul Bhatia (Rahul) in 2006. A recent spat between these two co-promoters has raised the question of corporate governance issues and is threatening the future the company. Bitter boardroom battle got triggered when one of the co-promoters Gangwal made critical comments against the company’s practices. This issue got raised because of rights abused by Rahul by his considerable powers opined by Gangwal. However, Gangwal was quite okay at the inception of the company. These comments triggered the attention of capital market regulator SEBI. The topics regarding exclusive rights and Related Party Transactions (RTPs) raised red flags. Shareholders got concerned, and the share price nosedived. Experts opined RTPs to be an administrative issue and not that of the airlines. This case uses secondary data from reliable sources such as stock exchange submissions and disclosures, media reports, amongst others. Discussion is centered on the debut of IndiGo to strategies used to become a leading domestic carrier and about the recent bitter battle. We then explore the question: What would be the impact of governance issues with the company in the future?

Keywords: Company promoter, corporate governance policy, related party transactions, boardroom

DOI: http://dx.doi.org/10.5958/0976-0148.2019.00007.6

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