IndiGo's co-founder Rakesh Gangwal resigns from InterGlobe board with immediate effect

IndiGo's co-founder Rakesh Gangwal has stepped off its board and will sell his holdings in the airline over about five years, he said Friday.

His letter to the board came barely two weeks after his partner Rahul Bhatia, with whom he has sparred for long, assumed the position of managing director.

That came a month after a change in articles of association allowed one partner to leave without another exercising the right of first refusal.


"I have been a long term shareholder in the company for more than 15 years and it's only natural to someday think about diversifying one's holdings," he said.

"However I am concerned about the optics of reducing my holdings even though such transactions would only be undertaken when I do not have any unpublished price sensitive information," he said.

Gangwal and family owned 36.61% in India's biggest airline by market share. According to its market capitalisation on Friday close, the stake is worth Rs 29,900 crore.

On Feb 4, IndiGo's co-founder Rahul Bhatia assumed the position of its managing director. IndiGo never had a managing director. Ronojoy Dutta is the CEO of the airline.

The previous month, the shareholders of IndiGo approved a resolution seeking an amendment to the Articles of Association of the company, some of which give one founder the first right to purchase the other’s shares in the company if the latter decides to sell. This happened after years of feud between Bhatia and co-founder Gangwal who has stopped participating in the airline's operational and financial decisions.

Bhatia and Gangwal have been locked in a bitter feud over the last three years.

The legal battle between the promoters began on July 8, 2019, when Gangwal wrote to the Securities and Exchange Board of India (Sebi), the Prime Minister’s Office and the finance ministry, seeking intervention on various corporate governance issues and the Bhatia Group’s control of the airline.

Gangwal had sought amendments to the AoA to remove rights of Bhatia’s IGE Group on the airline, and raised past related-party transactions, non-independence of the current chairman, and refusal to hold an EGM when he had requested, among other issues.

Several cases were filed in India, the US and London culminating in the extraordinary general meeting this year when the articles were amended, smoothening the way for Gangwal's exit.