In a near 800-word press statement issued on Saturday night, IndiGo CEO Ronojoy Dutta made an attempt to dismiss speculations over a possible rift between the airline’s co-founders Rakesh Gangwal and Rahul Bhatia.
While he alluded to the fact that “there may be differences currently on certain matters”, he didn’t explicitly attribute it to the co-founders. In a rather convoluted way Dutta said, “We all know, that in any strong and well-managed company there will always be differences. And, yes, there may be differences currently on certain matters but the company has a great track record of resolving issues and coming out ahead.”
Without elaborating what the differences were, Dutta added, “If the current differences were to not get resolved, you shall certainly hear about it; however, it serves no purpose speculating about it.”
Speculation is rife that the differences between the co-founders could be over the future direction of the company, management changes, and control issues. Dutta, however, termed them as “baseless speculations”.
With regards to control issues, Dutta quoted a statement from Gangwal that read: “I am categorically and clearly stating that there is no interest or desire whatsoever on the part of the RG Group to take control of the company. Also, to put to rest the messaging on the fact that the RG Group is attempting to renegotiate the Shareholders Agreement, I am placing on record that the RG Group stands by the current SHA which, in any case, expires this October”.
Gangwal owns a 36.68% stake in InterGlobe Aviation, the listed parent company of IndiGo, while Bhatia owns 37.90%. “I don’t think Mr. Gangwal could have been more clear and explicit on his intentions and I thank him for authorising me to make this statement on his behalf,” said Dutta.
He also cleared the air on the point of the two co-founders soliciting the help of law firms — JSA and Khaitan & Company — to settle their differences. “These prestigious law firms have been on retainer by the founders since at least the time of the IPO of the Company in 2015 and they continue to represent the promoters on various ongoing matters as it relates to their shareholding in IndiGo.”
Bhatia’s InterGlobe Enterprises is represented by JSA and Gangwal’s RG Group by Khaitan & Company. “Thus, the 4-year-old ongoing retainer history of the law firms should not be presented or seen as a new revelation,” Dutta added.
Clearly, IndiGo’s management saw the need to put the speculations to rest given the airline’s dominance in India’s aviation market. “It’s common knowledge that when you have differences of opinion between promoters, who own almost three-fourths of a company, it will have an impact on the company’s growth,” said Jitender Bhargava, the former executive director of Air India, in an earlier interview to Fortune India. “Any slackening in its [the airline’s] growth will have an impact on the aviation industry.”
Dutta, though, reaffirmed that IndiGo isn’t a “fractured team”. “The truth is that we are all very much united in vision, purpose and direction as we move forward to build a world class [company/airline].”