IndiGo in the country's largest private carrier with nearly 50 per cent market share on local routes

Even as a dispute rages by the day with letter-bombs being dropped by the warring promoters, IndiGo co-promoter Rahul Bhatia is unlikely to budge from his position and agree to dilute airline's control structure that gives him right to nominate chairman, CEO and other management personnel.

Sources told IANS that Mr Bhatia was ready for scrutiny of company books by any government agency as there are no deficiencies in its functioning from Company law perspective.

"The issues pertaining to related-party transactions (RPTs) and corporate governance have been raised. On pretext of this, one promoter wants to change the governance structure. But Rahul Bhatia is not going to yield," the executive said.

The feud between the two airline co-founders, Rakesh Gangwal and Mr Bhatia, came to light on July 8 after the former wrote a letter to market regulator Sebi raising issues related to RPTs and corporate governance. A copy of the letter was also marked to Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and other top government functionaries.

While Mr Gangwal and his family hold 37 per cent stake in the company, Mr Bhatia and family control 38 per cent in the country's largest private carrier with nearly 50 per cent market share on local routes.

In his letter, Mr Gangwal alleged that basic governance norms and laws were not being followed by the company apart from questionable RPTs. He said that the lapses, if not corrected, will lead to unfortunate outcomes.

Highlighting that Mr Bhatia has unusual controlling rights over IndiGo with right to appoint three out of six directors besides MD, CEO and president, he implied that such rights were not being exercised fairly.

"These controlling rights give IGE Group (InterGlobe Enterprises controlled by Mr Bhatia), a minority shareholder, significant influence over the decisions of IndiGo and there is nothing wrong in that by itself, provided such influence is used judiciously and with prudence and is in the best interest of the company," Mr Gangwal wrote.

Mr Bhatia has vehemently refuted the charges levelled by his business partner.

In a letter last month to the company directors, the travel entrepreneur wrote that it has now more clearly emerged that the real agenda of the RG Group (Rakesh Gangwal) is to dilute and diminish the controlling rights of the IGE Group and to relieve itself from its obligations under the Shareholders' Agreement and the Articles of Association.

He further attributed the rift to the 'hurt ego' of Mr Gangwal after the airline found alternative way to negotiate large purchase order without the latter being at the helm.

"In hindsight however, the company will remain eternally grateful to Mr Gangwal for having attempted t o hold the Company's business to ransom (by purposely delaying the ongoing negotiations with OEMs), as this paved the way for the Company to institutionalize an area of operations which Mr. Gangwal had kept as his exclusive preserve (to serve his far-sighted motive which has now become abundantly evident)," Mr Bhatia taunted.

Both the sides have been using strong words and spat has over the last few days turned uglier. There does not seem the dispute coming to an end anytime soon. In a statement, IndiGo has said InterGlobe Enterprises will continue to place facts (rather than smoke and mirrors) in public domain to counter Mr Gangwal's "baseless and fact free insidious allegations".

Industry experts see the ongoing differences having its impact on the airline.

Rajan Mehra, CEO of Club One Air and former India head of Qatar Airways said the recent developments suggest very deep misunderstandings between the two promoters.

"The direction in which the fight is going does not augur well for anyone," he said.

IndiGo has been the fastest growing airline in India and also remains the most profitable. It has aggressively expanded its fleet over the last 14 years ranking one of the top low-cost airlines in the world. With its fleet of over 230 aircraft, the airline offers around 1,400 daily flights connecting 55 domestic and 18 international destinations.