IndiGo promoters call EGM on Dec 30 to amend share clauses

The promoters of India’s largest airline, IndiGo, have called for an extraordinary general meeting on December 30 to scrap the clause in the company’s articles of association, which gives them the right of first refusal over acquisition of each other’s shares.

A removal of the clause would thus allow either side to sell or transfer shares to a third entity without giving each other a notice.

On Monday, IndiGo’s parent company Interglobe Aviation informed the stock exchanges that it has received a joint requisition from its co-founders, Rahul Bhatia of InterGlobe Enterprises and Rakesh Gangwal and his family, for removing transfer restriction articles from the AoA. Together, the two promoters own 74.44 per cent stake in the airline.

The call for the EGM follows a London court of arbitration’s September order, which directed an amendment to the AoA to scrap the clause regarding right to refusal. The London court had granted the parties ninety days to implement the order.

In October, Gangwal had moved the Delhi High Court seeking directions for the calling of an EGM. However, the court disposed off his petition.

The agreement between the both the promoters provides for a right of first refusal and tag along rights over acquisition of each other’s shares. This clause was to be valid for four years from the listing of the airline in 2015. However, the clause was not scrapped in 2019 as the two promoters were locked in a bitter dispute over corporate governance issues at the airline.

The differences between the promoters became public in July 2019 after Rakesh Gangwal wrote to the Secu­rities and Exchange Board of India, seeking its intervention to address corporate governance issues at the company. Bhatia’s IGE Group had rejected the allegations. In 2019, both the sides initiated arbitration to resolve the dispute.

In September, the airline had informed the stock exchange that no directions had been issued by the London court of arbitration to the company.

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