In a major setback for InterGlobe Aviation promoter Rakesh Gangwal, shareholders of the company voted against his resolution seeking changes in the company’s articles of association (AoA).
Gangwal’s resolution received only 48.5584% of the votes at an extraordinary general meeting (EGM) in New Delhi on Wednesday. M. Damodaran, chairman of the board of directors of the company, chaired the EGM. Interestingly, Rakesh Gangwal was not present at the EGM.
According to a report by livemint.com, shareholders were upset about Gangwal’s absence and “created a ruckus, prompting chairman M. Damodaran to call security guards to control the situation”.
InterGlobe Aviation, the parent company of India’s largest airline IndiGo, was founded by Gangwal and Rahul Bhatia in 2006. It is unclear whether Gangwal moved the resolution in a bid to offload his shareholding in the company, which has a market capitalisation of around $8 billion. The changes in the AoA would have allowed him to sell his shares freely without Bhatia having first right of refusal. Gangwal holds about a 36.64% stake in InterGlobe Aviation, while Bhatia holds a 38.22% stake.
Gangwal and Bhatia have been openly feuding since early last year over a variety of issues, with each party accusing the other of wrongdoings. However, their feud hasn’t impacted the running of IndiGo, which a reported 168% jump in net profit to ₹496 crore in the October-December quarter (Q3) of the current fiscal over the same period a year ago, on account of better yields and higher passenger growth. Lower fuel costs (by about 2%) also helped boost the bottom line.
The shares of the airline closed 0.62% higher at ₹1,462.20 apiece on Wednesday, compared to the benchmark index BSE Sensex’s 0.57% rise.