IndiGo promoters skipped most board meetings, says IiAS report

Our Bureau Mumbai | Updated on July 17, 2019

The promotes of IndiGo, Rahul Bhatia and Rakesh Gangwal, are engaged in a row that could snowball into a legal spat

Proxy advisory firm also finds fault with board composition

IndiGo’s promoters attended less than 40 per cent of the board meetings in FY16 and FY17, according to proxy advisory firm Institutional Investor Advisory Firm (IiAS).

“The lack of promoter attendance at board meetings and a relatively small board composition can be interpreted in two ways — that the company was professionally managed and did not need the promoters’ intervention, or that the promoters controlled the business and its operations, and that the board had a limited role. Given the discourse from both sides, it seems more the latter than the former,” IiAs said in its report.

The board meeting attendance of promoters was low, averaging at less than 40 per cent in FY16 and FY17. This improved to 63 per cent in FY18 as differences between the two factions began to simmer, despite the Kotak committee recommending harsh criteria for the reappointment of absentee directors.

This comes even as Rahul Bhatia and Rakesh Gangwal, the promoters of IndiGo, are engaged in a row that could snowball into a legal spat.

The advisory firm also pointed out irregularities in governance and board composition. “The engagement of the promoters at the board level is a concern,” it noted, adding that “IndiGo’s board is silent and its ability to protect the company from the promoters’ battle is limited.”

The IndiGo board has just six members. This includes director and promoter Bhatia along with Gangwal as the promoter and non-executive director. It is chaired by M Damodaran, and includes non-executive independent director Anupam Khannaa, Rohini Bhatia (non-executive director) and Anil Parashar.

Published on July 17, 2019

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