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'We are not a fractured team,' says IndiGo while admitting 'big companies have differences'

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NEW DELHI: IndiGo is not a “fractured” team and the hiring of law firms by its two promoter-cum—co-founders dates back four years when the airline went public. The budget carrier on Saturday night sought to convey this message after it became known that its promoters Rahul Bhatia and Rakesh Gangwal had hired law firms to sort out differences between them, which led to the scrip tanking 9% on Thursday.

Importantly in his Saturday statement, IndiGo CEO Ronojoy Dutta did not deny the differences. “…in any strong and well-managed company there will always be differences. And, yes, there may be differences currently on certain matters but the company has a great track record of resolving issues and coming out ahead. If the current differences were to not get resolved, you shall certainly hear about it; however, it serves no purpose speculating about it,” Dutta’s statement says. Both Gangwal and Bhatia Groups have 37-38% stake in the airline.

He, however, stressed that the issues being referred to as a fallout of the differences like hiring of law firms, frequent management-level changes, management control and the model for IndiGo to expand overseas operations are not due to that. “It is true that IGE (InterGlobe Enterprises) group is represented by law firm JSA and RG (Rakesh Gangawal) Group is represented by law firm Khaitan & Company. These law firms have been on retainer by the founders since at least the time of the IPO of the Company in 2015 and they continue to represent the promoters on various ongoing matters as it relates to their shareholding in IndiGo. ….(it) should not be presented or seen as a new revelation.”

Flying since 2006, IndiGo took pride in a very stable top management. Since last year it has seen a major churning which started with its president Aditya Ghosh and chief commercial and network brain Sanjay Kumar leaving. Along the same time a large number of expats were being brought in to man key positions. This was seen to be another area of disagreement among Bhatia and Gangwal.

Admitting management changes in recent past that saw him coming in too this January, Dutta said: “…every one of these senior leaders (who left) contributed a great deal to IndiGo… But all great companies go through periods of transition as they evolve from one phase of their growth to another and a little bit of turbulence during these transition phases is neither unusual nor unwelcome. Most importantly, the promoters and the Board have worked as a team in making these management changes.”

On management control issues between Gangwal and Bhatia, he said: “There has been some speculation that perhaps some disagreement centers round the RG Group seeking to acquire more control of the management and the board. I am authorized by Rakesh Gangwal to make the following statement on his behalf — `I am categorically and clearly stating that there is no interest or desire whatsoever on the part of the RG Group to take control of the company…. the RG Group stands by the current shareholders agreement (SHA) which, in any case, expires this October”.”

And finally the differences were reportedly on how IndiGo — which now control 47% of domestic market share — should spread its wing in the overseas market. Whether it should get wide body planes or stick to single aisles. On this issue, Dutta said: “IndiGo is an exceptionally successful company and one of the pillars that made it so successful is that it dared to have a bold vision regarding the future of aviation in India… we remain committed to our path of a rapid build-up of airline connectivity within India and to international destinations.”

Dutta ends his statement thus: “I deeply resent and wish to dispel all attempts to portray us as a fractured team at IndiGo. The truth is that we are all very much united in vision, purpose and direction as we move forward to build a world class (airline).”

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