Rift between Indigo’s co-founders | Allegedly over differences in expansion strategies
Founders Rahul Bhatia and Rakesh Gangwal are allegedly embroiled in a rift but are trying to ensure that their difference doesn’t impact the airline’s business.
The differences as reported by ET, are over expansion strategies, certain clauses of the shareholders’ agreement, and management control.
- As per reports, both founders are seeing red over disagreement in some shareholders’ agreement clauses and airline’s management control.
- Industry Analysts are wary of the impact the differences could have on an already crippled Indian aviation sector.
- Bhatia owns a family stake of 38.26 per cent, while Rakesh Gangwal owns 36.69 per cent in the airline with a market capitalisation of Rs. 61,833 crore.
- The founders are trying to resolve the differences having hired law firms JSA Law and Khaitan & Co to settle issues.
- Gangwal is responsible for IndiGo’s global operations and international partnerships, while Bhatia runs the show in India.
The dispute has escalated in recent weeks with reports out that Bhatia is sceptical about Gangwal’s aggressive approach to overseas expansion.
In February 2018, Gangwal wanted to increase Indigo’s capacity to 250 from 155 but the proposal didn’t inspire the board. Aditya Ghosh resigned as a whole-time director of the Airline in April 2018.
Law firms have been roped in
Both parties are looking at all the possible options having roped in their law agencies. Both Bhatia and Gangwal are looking to exploit the gap left by Jet Airway’s shut down but differences in their respective approaches to expansion have fuelled problems.