'Related party transaction' issue dents IndiGo's scrip

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SME Times News Bureau | 27 Jun, 2019
Budget passenger carrier IndiGo's scrip fell around 2 per cent after one of the top executives of the company said that an administrative issue of "related party transaction" exists between the two promoters of the airline.

In an interview to a business news channel, the airline's Chief Executive Officer (CEO) Ronojoy Dutta said that "related party transaction" was the only administrative issue between IndiGo's co-founders Rahul Bhatia and Rakesh Gangwal.

A "related-party transaction" is conducted between a company and its related entities.

The company's scrip on the BSE fell 1.96 per cent or Rs 31.50 to Rs 1,575.35 from its previous close.

Earlier in May, Dutta had termed the reports of a rift between IndiGo promoters as "baseless speculation".

At that time, reports highlighted differences between IndiGo's co-founders Bhatia and Gangwal over managerial control of the firm.

In a statement Dutta had said: "I would like to forcefully address these baseless speculation as they are not in the best interests of our shareholders, our employees and the travelling public."

Further, in the same statement, Dutta had said on behalf of Gangwal: "I (Gangwal) am categorically and am clearly stating that there is no interest or desire whatsoever on the part of the RG Group to take control of the company.

"... I (Gangwal) am placing on record that the RG Group stands by the current SHA which, in any case, expires this October."