The crisis at the country's largest private carrier IndiGo seems to be deepening with the dispute between the promoters of the airline turning ugly.
The differences had been earlier been presumed to be a minor one by many industry experts but it now transpires that it has snowballed into a full-blown war.
Airline co-promoter and former US Airways Chief Executive and Chairman Rakesh Gangwal, who has so far remained behind the scenes, has come on record to lodge his grievances against various issues pertaining to IndiGo. So much so that, he has sought regulatory intervention from market regulator Sebi to resolve the issues.
The developments have left investors wary. The airline stock fell 0.29 per cent to Rs 1,565.75 a piece on Tuesday on the BSE.
Gangwal, along with his affiliates, hold 37 per cent stake in IndiGo while the other co-promoter Rahul Bhatia has 38 per cent equity stake.
In his letter to Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi and other top officials, Gangwal has said that IndiGo was built on the foundation of uncompromising values and principles but it has started veering off from the core principles and values of governance that made IndiGo what it is today.
He has raised serious objections to related party transactions in the company, stating that various fundamental governance norms and laws are not being adhered to. He has warned that this will lead to unfortunate outcomes, should effective measures not be taken.
Sebi has sought a response from budget passenger carrier IndiGo on the alleged grievances raised by Gangwal.
According to IndiGo's regulatory filing: "... we inform you that the Board of Directors of lnterGlobe Aviation Limited has received a letter dated July 8, 2019 from Rakesh Gangwal, the copy of which is already with the Stock Exchanges, informing the company that he has written a letter to SEBI seeking regulatory intervention on his alleged grievances".
"SEBI has in the meantime asked the company to give its response to this letter by July 19, 2019, with which the company will comply," the regulatory filing made to the BSE said.