Rakesh Gangwal

Aviation sector traders on Wednesday morning were spooked. The news of Indigo’s co-founder selling a significant stake in the company sent the stock tumbling down in early trade. As per reports, IndiGo co-founder Rakesh Gangwal and his family will sell around 4% stake in inter globe aviation Ltd. But why is Gangwal reducing his stake in the biggest airline in the country and a company he co-founded? Watch the full video to find out.

IndiGo has been facing a probe by the Sebi ever since a public spat came to light between two founders of the airline,The watchdog has been conducting a thorough probe into the IndiGo matter

Shareholders’ nod was not taken for some related-party deals; some others lacked the approval of the audit panelThe results of Sebi’s preliminary investigation revive turbulence at the airline, which was rocked by a feud between its founders last year

With Gangwal absent at the meeting, shareholders were extremely upset and created a ruckus near the stageThe results of the shareholders' votes at the extraordinary general meeting is expected in the next two days

Gangwal is seeking to delete certain rules in the company's articles of association that give Bhatia the right of first refusal should Gangwal choose to sell his sharesGangwal also wants to remove an article that prevents either of the co-founders from buying publicly-listed shares in InterGlobe

The meeting is being convened following request by co-promoter Rakesh Gangwal and related entities who together hold 36.64% in IndiGoThe extraordinary general meeting would vote on changes in the articles of association

The latest development comes a fortnight after IndiGo told its shareholders that Bhatia had submitted an arbitration request against Rakesh Gangwal GroupThe documents could be used during the arbitration to bolster Bhatia’s case with respect to the alleged breach of the SHA

The meeting also comes against the backdrop of differences between promoters — Rahul Bhatia and Rakesh GangwalShares of InterGlobe Aviation rose nearly 1% to close at ₹1,736 on the BSE

Gangwal and his associates hold nearly 37% in InterGlobe Aviation, while IGE group owns around 38%Although the two groups own similar stakes, an initial agreement gave special rights to Bhatia’s company

A fragile truce at IndiGo airlines seems to be all but broken after co-promoter Rakesh Gangwal wrote to the Securities and Exchange Board of India again. Gangwal sought the market regulator's intervention on a number of issues like related party transactions, chairman Damodaran's conduct, and curbing of co-founder Rahul Bhatia's IGE Group's 'unusual controlling rights'. Gangwal's letter came days after CEO Ronojoy Dutta claimed that the dispute between the two promoters had been resolved. Watch the full video for more.