Mumbai: IndiGo on Friday said that all related-party transactions (RPTs) with the airline in 2018-19 have been reviewed and approved by its audit committee.
“All related-party transactions were in the ordinary course of business and on an arms’ length basis. During the year under review, the company had not entered into any contracts or arrangements with related parties referred to in Section 188(1) of the Act, which required the approval of the board," IndiGo said in its annual report released on Friday.
“In accordance with regulation 23 of the listing regulations, the company has formulated a policy on materiality of related-party transactions and dealing with related-party transactions, which was recommended by the audit committee and approved by the board," it added.
IndiGo’s co-promoter Rakesh Gangwal, in an 8 July letter addressed to the Securities and Exchange Board of India (Sebi) chairman Ajay Tyagi, had alleged several violations at IndiGo, including those pertaining to related-party transactions; and appointment of senior management personnel, directors and the chairman, who has always been an independent director by convention. This has been refuted by Rahul Bhatia, co-promoter and co-founder of the airline.
The feud between the promoters of the country’s largest domestic airline IndiGo seems to have intensified, with Gangwal stating earlier this week that he had provided information on related-party transactions between IndiGo and Bhatia-controlled InterGlobe Enterprises (IGE) to the “relevant authorities".
A person close to Bhatia, however, refuted the claims stating that there was no evidence to substantiate the allegations on related-party transactions between the airline and InterGlobe Enterprises.
“All transactions entered into with related parties as defined under the Companies Act, 2013, and the listing regulations during the financial year were in the ordinary course of business and on an arm’s length basis. All related-party transactions were placed before the audit committee for review and were approved," IndiGo said in its annual report, adding that none of the transactions with any of the related parties were in conflict with the interests of the company.
Meanwhile, IndiGo will seek approval from IGE Group to nominate five directors, and Gangwal’s approval to nominate one director, it said.
In a regulatory filing on 22 July, IndiGo said that the number of directors in the company will be raised to 10. The current six-member board comprises two independent directors, which will double when the board is expanded.
Under the new setup, Bhatia will have five nominations to the board, which will have one nomination from Gangwal and four independent directors.
On Friday, IndiGo’s shares fell 2.83% to ₹1,507.45 apiece on the BSE, while the benchmark Sensex rose 0.27% to end the day at 37,118.22 points.