New Delhi: An independent director at InterGlobe Aviation, which is grappling with promoters' feud, has called for confidence-building measures to address tremendous trust deficit that has built up on the board.
In an email to Chairman M Damodaran, non-executive independent director Anupam Khanna said that a new governance issue appears to be emerging with the approach laid out by Damodaran, especially relating to holding various meetings after the Annual General Meeting (AGM).
The communication comes against the backdrop of Damodaran's response to a letter by co-promoter Rakesh Gangwal to the board wherein the latter has said there are "serious unresolved issues" and opposed expanding the board to have 10 members.
Following the letter, Damodaran said he would be initiating a proposal for scheduling meetings of the Audit Committee (AC), Nomination and Remuneration Committee (NRC) and board, immediately after the AGM, which is scheduled to be held on August 27.
According to Khanna, the issue that remained to be resolved was about the risk of questionable decisions and has nothing to do with the competence or integrity of the independent directors.
The email from Khanna -- who is also chairman of the NRC -- was disclosed by Gangwal on Wednesday through the website 'governanceindia.com'.
"Needless to say, a tremendous trust deficit has built up that we as a board must wring out, but that will take time and we need confidence-building measures today," Khanna said.
The letter and the emails are dated August 5.
"... if there is some distance to go before issues are resolved then I believe we need to communicate the uncertainty immediately to the shareholders, financial markets and the regulator.
"After all these matters have festered for more than a year, it is our absolute fiduciary responsibility, especially as independent directors, to ensure complete transparency and to correct any misleading impressions that might have been created, inter alia by the AGM notice and agenda," Khanna said.
In response to Gangwal's latest letter, Damodaran, in his August 5 email, said the former's apprehension that Rahul Bhatia's group could push through questionable decisions after board expansion does no credit to the fiduciary responsibilities of directors.
At present, InterGlobe Aviation -- parent of the country's largest airline IndiGo -- has six board members.
The feud between Gangwal and Bhatia came into the public after Gangwal, in July, wrote to markets regulator Sebi seeking its intervention to address alleged corporate governance lapses at the company.
"In any case, what is the harm of having a guardrail as enunciated, namely no policy changes unless there are four independent directors on the board?," Khanna noted in the email.
"The safeguard is precisely for situations when the full complement of IDs is not in place and the IGE group with its numbers can ride roughshod over the opposition of all other directors.
"This has happened in the past and our fiduciary responsibility compels me that this risk must be avoided to safeguard the interests of minority shareholders as well as other stakeholders in the company and the national public," he added.
While sharing Khanna's email, Gangwal said he be allowed to correct the omission on the part of the company by sharing the
Gangwal's letter and Damodaran's email was disclosed to the stock exchanges by InterGlobe Aviation on Tuesday.
Regarding Gangwal's website, InterGlobe Aviation on Tuesday said the website has not been approved or authorised by the company.
"... and no reliance should be placed on the contents of this website as it may contain incomplete and therefore misleading information," the company had said.