NEW DELHI: The number of directors on the board of InterGlobe Aviation Ltd., which runs IndiGo, India's largest airline, will be raised to 10, the company informed the stock exchanges late on Sunday.
At present, the company has six directors on the board, including co-founders Rahul Bhatia and Rakesh Gangwal. After the proposed increase, the board will have four independent directors. The company informed the stock exchanges that at its meeting held on Saturday, it was decided to amend the charter of the company for expanding the number of directors on the board. "The said amendment of the articles (the charter of the company) will be subject to approval of the shareholders at the forthcoming annual general meeting," said the company statement to the exchanges.
Mint had reported last Monday that the company was to consider expanding its board of directors at its meeting later in the week. The expansion comes in the middle of a bitter spat between Bhatia and Gangwal over a shareholder agreement which gave the Bhatia group certain rights, including the power to appoint three of the six existing directors of IndiGo, nominate a chairman as well as appoint a managing director and chief executive.
The decision to expand the board is apparently based on a demand from Gangwal. According to a 30 January letter written by Bhatia and his wife Rohini to the company’s board, Gangwal has asked on several occasions for the board to be expanded, Mint reported last Monday. The expansion of the board seems to suggest the two warring groups are headed for some sort of resolution, although the company's statement to the exchanges did not specify any resolution on the differences the co-foundes have on the shareholder agreement.
IndiGo’s board at present comprises Rahul Bhatia and Gangwal, besides former Securities and Exchange Board of India (Sebi) chief M. Damodaran, who serves as the chairman, Rohini Bhatia, InterGlobe Technology president Anil Parashar and former World Bank executive Anupam Khanna, an independent director.
The company on Friday reported its highest ever quarterly profits, benefiting from the collapse of Jet Airways and showing resilience in the face of disagreement among the founders. IndiGo’s net profit stood at ₹1,203 crore in the quarter ended June, an almost 43-fold jump from Rs27 crore in the corresponding quarter last year. The airline’s chief executive officer, Ronojoy Dutta, said the surge in net profit was due to strong passenger revenues and a sharp improvement in cargo performance.