InterGlobe Aviation, the parent of the country’s largest airline IndiGo, has settled with Sebi a case of alleged corporate governance lapses and listing norms violations that were raised by the company’s co-promoter Rakesh Gangwal.
The company has settled the matter “without admitting or denying any violation on its part,” by paying a settlement charge of Rs 2.1 crore, according to a Sebi order passed on Tuesday.
The order comes more than a year after InterGlobe Aviation’s co-promoter Gangwal alleged corporate governance lapses at the company. Gangwal and co-promoter Rahul Bhatia have differences over certain corporate governance matters. Bhatia camp had rejected the allegations.
Gangwal had written to Sebi in July 2019 seeking its intervention to address certain issues. As per the 10-page order, Sebi had received several complaints from Gangwal.
G Ramar was appointed as the Adjudicating Officer for the matter on May 5, 2020.
Based on the complaints, Sebi examined the issues and based on its investigation, a show cause notice was issued with respect to InterGlobe Aviation on November 10, 2020.
Pending adjudication proceedings, InterGlobe Aviation proposed to settle the instant proceedings initiated against it, without admitting or denying the findings of fact and conclusions of law, through a settlement order. The settlement application was filed on December 23, 2020.
By way of a letter dated January 7, 2021, the company proposed to pay little over Rs 2.1 crore “towards full and final settlement of all regulatory, civil or criminal proceedings in relation to the facts contained in the SCN (Show Cause Notice) without admitting or denying any violation on its part,” the order said.
Sebi’s High Powered Advisory Committee (HPAC) recommended the settlement proposal and the same was approved by the panel of Whole Time Members of Sebi on January 25. The same was communicated to the company on February 5 and it paid the amount on February 8.
Gangwal’s complaints related to alleged corporate governance lapses, including those pertaining to Related Party Transactions (RPTs) between the company and the IGE Group.
Gangwal, along with his affiliates holds around 37 per cent stake in InterGlobe Aviation while Bhatia and his affiliates (IGE Group) have about 38 per cent shareholding in the company.
Among others, it was also alleged that there was misrepresentation in the company’s Red Herring Prospectus (RHP) dated October 16, 2015.