New Delhi, A day after the dispute between IndiGo promoters came out in the open, an internal letter of co-founder Rahul Bhatia has claimed that Rakesh Gangwal’s ego got hurt after the airline managed to negotiate large purchase order without the latter being at the helm.
Upon his refusal to join in the company’s ongoing negotiations with Original Equipment Manufacturers {OEMs), the company had proceeded to make alternate arrangements for the purpose. Bhatia said that this hurt Gangwal’s ego.
“In hindsight however, the company will remain eternally grateful to Mr Gangwal for having attempted to hold the company’s business to ransom (by purposely delaying the ongoing negotiations with OEMs), as this paved the way for the company to institutionalise 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),” Bhatia wrote on June 12 to the Board of Directors.
Preferring CFM over Pratt & Whitney engines, IndiGo had last month placed order worth $20 billion for LEAP-1A engines to power 280 Airbus A320neo and A321neo aircraft. The airline’s shift to CFM followed numerous technical glitches with Pratt & Whitney engines that led to frequent grounding of its aircraft.
Gangwal, a former US Airways CEO and an aviation veteran, is considered man behind the larger aircraft orders IndiGo has been placing since its incorporation.
IndiGo had in 2005 surprised the world by placing a mega order with Airbus. It committed to buy 100 A320 airplanes worth $6 billion at list prices. For a new airline, it was considered too big to believe.
But now that the airline has grown really big, the dispute between the two promoters could spell deep trouble for the carrier. The differences between the two had earlier been presumed to be a minor one by many industry experts but it now transpires that it has snowballed into a full-blown war.
Gangwal has already lodged complaint with market regulator Securities and Exchange Board of India, raising issues related to third party transactions and corporate governance.
In his letter to SEBI Chairman Ajay Tyagi and other top officials, Gangwal has said that IndiGo was built on the foundation of uncompromising values and principles but it has started veering off from the core principles and values of governance that made the airline what it is today.
The ongoing developments have made investors wary with the airline stock slumping 10.73 per cent to Rs 1,397.75 a piece on the BSE on Wednesday.
