Billionaire owners’ feud at Indian budget airline IndiGo heads to court

The Rs3,010 crore IndiGo IPO, which closed on 29 October, was subscribed 6.14 times, as financial institutions and high networth individuals sought to tap the world’s fastest growing aviation market through the issue. Photo: Mint

Rahul Bhatia, co-founder of Indian budget airline IndiGo, has filed an arbitration request against his partner Rakesh Gangwal in a London court, involving the judiciary for the first time in a feud between the two billionaire owners over allegations of corporate governance lapses.

Bhatia and his holding company filed the claim to the London Court of International Arbitration on Oct. 1, IndiGo’s operator InterGlobe Aviation Ltd. said in a stock exchange statement. It relates to Bhatia’s claims against Gangwal and his affiliates’ compliance with the shareholder agreement and articles of association, InterGlobe Aviation said.

No relief or monetary claim has been sought against the airline, which was named as a respondent in the filing. Gangwal didn’t immediately respond to a request for comment.

The dispute between the founders of Asia’s biggest budget carrier by market value has had little negative impact on its share price, which is near a record high. IndiGo is aggressively expanding, adding about one Airbus SE A320neo jet every week and flying to new international destinations. It is the biggest customer for Airbus’s best-selling narrow-body airplane.

Gangwal publicly accused Bhatia in July of corporate-governance transgressions, saying his “unusual controlling rights” allowed him to push through related-party transactions in violation of rules. IndiGo implemented a new policy for related-party transactions and expanded its board following the allegations, but Gangwal wasn’t convinced by the move, and has sought intervention from India’s securities regulator.

Gangwal, who was once chief executive of US Airways, and his affiliates own about 37% of IndiGo, while Bhatia’s company holds 38%. The two men formed IndiGo in 2005, and it quickly outpaced rivals to control almost half the Indian market, where airlines struggle to make money due to a cut-throat fare war.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.