New Delhi: A preliminary probe by markets regulator SEBI has suggested prima-facie violations of corporate governance and listing disclosure norms in certain related party transactions involving budget carrier IndiGo's parent firm InterGlobe Aviation Ltd, sources said.
While the company said it has not received any communication from the Securities and Exchange Board of India (SEBI) in this regard, shares plunged sharply in afternoon trade on Tuesday.
IndiGo has been facing a probe by the SEBI ever since a public spat came to light between two founders of the airline, including over certain related party transactions involving one of the warring promoters.
The sources said that a preliminary probe has now suggested violation of certain listing disclosure norms as also of fair corporate governance practices at the company.
InterGlobe shares closed 4.68 percent lower at Rs 1,376.70 apiece on the BSE, after hitting an intra-day low of Rs 1,334 in afternoon trade after a sudden plunge following media reports about the Sebi probe.
"We would like to state that the news item published in some media reports is factually incorrect and the company has not received any communication from SEBI in this regard," the company said in a filing to the BSE.
This came after the exchange sought a clarification from the company on the reports.
There was no official word on the probe from SEBI, which has been conducting a thorough probe into the IndiGo matter. All agreements between the two warring founders as well as those between the company and its various investors and associates, including related parties, are being looked into by the watchdog.
The probe has suggested that some of the related party transactions could have been significant and required detailed disclosures and greater vetting by board committees comprising of independent directors, the sources said.
The differences between co-founders and co-promoters — Rakesh Gangwal and Rahul Bhatia — came to the fore in July 2019 after Gangwal sought market regulator SEBI's intervention to address alleged corporate governance lapses at the company.
In the wake of the feud, arbitration proceedings are also going overseas between the two promoters' sides.
Last month, InterGlobe Aviation's shareholders rejected a proposal of Rakesh Gangwal to amend the company's Articles of Association (AoA).
Generally, an AoA provides the regulations for operating a company.
Rakesh Gangwal (RG) Group and related entities together hold 36.64 percent stake while Bhatia and affiliates — InterGlobe Enterprises (IGE) Group — have around 38 percent shareholding in the company.
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Updated Date: Feb 25, 2020 19:24:13 IST