With founders quarreling in board room, IndiGo can't fly high in the sky
This is the time for IndiGo to be rewarding shareholders by consolidating its leadership position and filling the gap left by Jet
Company News: The co-founders of India’s No 1 airline are engaged in a bitter feud. Their quarrel couldn’t have come at a worse time for minority shareholders of InterGlobe Aviation Ltd, the company that owns IndiGo.
Investors were just
starting to enjoy the fruits of a frenetic expansion that saw the
no-frills carrier, Asia’s largest, double its capacity in the three
years through March. Full-cost rival Jet Airways India Ltd tried to
keep up, until it was forced to ground its last plane in April under
a truckload of debt. Meanwhile, InterGlobe has put together a cash
war chest — net of debt — of nearly $2 billion.
This is the time for
IndiGo to be rewarding shareholders by consolidating its leadership
position and filling the gap left by Jet, especially on overseas
routes. Instead, the founders are busy picking fights.
Rakesh Gangwal, a former
CEO of US Airways Group Inc, has dashed off a letter to the Indian
stock-market regulator alleging corporate-governance lapses. He says
partner Rahul Bhatia, who owns 1 percentage point more than US-based
Gangwal’s 37 per cent stake, is dragging IndiGo into transactions
with his other businesses, which are mostly housed under InterGlobe
Enterprises Ltd (IGE Group), without adequate auditing. Read
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