Mumbai, July 22 (IANS) Stock prices of InterGlobe Aviation, the parent company of budget passenger carrier IndiGo, rose on Monday after the airline said that shareholders’ approval will be sought to expand its Board to up to 10 members.
On the BSE, the company’s scrip rose to Rs 1,518.15, up Rs 54.80 or 3.74 per cent from its previous close of Rs 1,463.35.
The airline on Sunday evening said that shareholders’ approval will be sought to expand its Board of Directors to up to 10 members which will include four independent directors.
The development came on the backdrop of the recent feud between co-promoters Rakesh Gangwal and Rahul Bhatia over issues of corporate governance.
“The Board of Directors of the company, at its meeting held on July 20, 2019, has decided to amend the Articles of Association of the Company for expanding the board to up to a maximum of 10 members, including 4 independent directors,” IndiGo had said in a regulatory filing late on Sunday evening.
“The said amendment of the articles will be subject to the approval of the shareholders at the forthcoming annual general meeting of the company,” it said.
On July 19, the company said that its board has decided to seek shareholders’ approval for expanding the board to enable the induction of an independent woman director.
According to a company statement issued on Saturday: “The Board has decided to seek the approval of the shareholders at the upcoming annual general meeting for expanding the Board to enable the induction of an independent woman director.”
The decision was taken at the company’s Board meeting held on Friday-Saturday. The meet assumed significance as the airline’s co-founders are up against each other over the control of the company.
“I just want to confirm that we had a board meeting today and this board meeting will continue tomorrow as well. The Board in its meeting today had a discussion on the appointment of an independent woman director to the Board of the company,” the company’s Chief Executive Officer (CEO) Ronojoy Dutta said in a post results conference call on last Friday.
“Of course, we have to take the step to comply with the law, but in order to induct an independent woman director, we need to change the ‘Articles of Association’ of the company which now needs to be amended. We are working on this and a final decision on this subject will be made tomorrow,” he said.
According to industry sources, the company has also approached former Pepsico CEO Indra Nooyi to join its board of directors.
Currently, its board has six members, including Chairman M. Damodaran, the former Sebi chief.
The other members on the board of InterGlobe Aviation, apart from Bhatia and Gangwal, are former World Bank executive Anupam Khanna, Anil Parashar, a chartered accountant, and Rohini Bhatia, the wife of Rahul Bhatia.
After the recent allegations of “collapsing” corporate governance in the company by Gangwal, the Ministry of Corporate Affairs has sought “information or explanation” from the airline. Market regulator Sebi is also looking into the alleged governance lapses.