Indigo parent settles with Sebi, pays ₹2.10 crore
NEW DELHI: Interglobe Aviation Ltd, which operates budget carrier Indigo, has paid ₹2.10 crore to the Securities and Exchange Board of India (Sebi) to settle Indigo co-founder Rakesh Gangwal’s complaints of related-party transactions and violation of corporate governance norms.
In his July 2019 complaints, following a falling out with co-founder Rahul Bhatia, Gangwal also alleged that Interglobe failed to inform the Indigo board of important information in a timely manner.
He also accused Interglobe of making misrepresentations in Indigo’s share sale documents of 16 October, 2015 and failing to make timely disclosure of information that could affect the market, according to a Sebi notification on its website on Tuesday.
After Gangwal’s complaints, Sebi sent a notice to Indigo on November 10. “Pending adjudication proceedings, the Noticee (Interglobe Aviation) proposed to settle the instant proceedings initiated against it, without admitting or denying the findings of fact and conclusions of law, through a settlement order and filed a settlement application dated December 23, 2020,” the Sebi order said.
Sebi, which had appointed an adjudicating officer in May 2020 to enquire into the matter, has disposed of the proceedings initiated against the airline. Gangwal complained of related-party transactions between the airline and another promoter group,
Interglobe Enterprise Pvt. Ltd (IGE) Group, which is helmed by the Bhatia, among other things.
Sebi also said that Interglobe Aviation failed to communicate the findings of a report by EY, engaged to review related-party transactions (RPTS) between the airline and IGE Group, to the board’s audit committee.
It added that the regulator had issued a show-cause notice to Interglobe Aviation on November 10, 2020 over several allegations. “The findings of EY report was communicated to board members by the chairman in the board meeting dated March 4, 2019,” the Sebi order said.
“The EY Report inter alia contained important information regarding an independent analysis of the RPTS undertaken by the Noticee (Indigo). Such information was necessary for the board of directors in order to fulfil their responsibilities,” the order noted.
A spokesperson of Interglobe Aviation declined to comment.