New Delhi: Asserting that the arrangement between the promoter groups has been transparent from inception at IndiGo, Rahul Bhatia group Sunday claimed that Rakesh Gangwal always limited his financial risks and was making insidious efforts to create an unseemly controversy about corporate governance. In a reflection of the deep differences between the two promoter groups, InterGlobe Enterprises (IGE) Group has now issued three statements in less than a week seeking to clarify issues and reject the allegations by Gangwal. Also Read – Maruti cuts production for 8th straight month in SepGangwal has sought markets watchdog Sebi’s intervention to address the corporate governance issues at InterGlobe Aviation — the parent of the country’s largest carrier IndiGo — where he holds around 37 per cent stake while Bhatia group has about 38 per cent shareholding. “Even more significantly, during the turbulent period of a fledgling airline, it was left to the IGE Group, as a responsible founder, to fend for IndiGo. Gangwal was missing in action at that time and there were stages where he wanted to de-risk and pushed for the business to be sold,” the group said in a statement that also provided details about investments made by the two sides. Also Read – Ensure strict implementation on ban of import of e-cigarettes: revenue to CustomsNoting that Gangwal has much to answer, the group wondered whether there is sanctity in agreements entered into by business people freely and at their own will. “Do business ethics and morals permit a contracting party to walk away from its obligations at its convenience after it has enjoyed the benefits under an agreement and pretend to be a victim?,” it said. Referring to purchase of planes from Airbus, the statement said that the IGE Group and Gangwal gave a joint undertaking of support IndiGo in November 2005, wherein both sides undertook to invest in the airline at least $50 million (which then was about Rs 200 crore), and maintain that investment until the delivery of the last aircraft. “As Gangwal was not going to take any further financial risk or obligation, IGE singly (though the undertaking to Airbus was a joint one ) took the obligation to further invest up to Rs 110 crore in IndiGo so that taken together with the then existing investment of Rs 99 crore, the conditions placed by Airbus could be met,” the group claimed. According to the statement, IGE Group continued to support the startup (IndiGo) without diluting Gangwal’s potential upside. “Kapil Bhatia and Rahul Bhatia extended personal loans to IndiGo and personal guarantees to the banks for diverse financing needs of IndiGo such as pre-delivery payments, aircraft acquisition, and working capital requirements. “Starting from financial year 2005-06 at a level of Rs 143 crore of personal guarantees by financial year 2009-10, the aggregate financial exposure of IGE, Kapil Bhatia and Rahul Bhatia was well over Rs 1,100 crore… while Gangwal was in safe harbour with equity exposure of less than Rs 15 crore,” it noted. Further, the group said that there was a “risk ratio of almost 80:1 as between the IGE Group and Gangwal”. Personal guarantees of Kapil Bhatia and Rahul Bhatia continued to be in force until end of financial year 2012 and by that time IndiGo — which Gangwal equates to a ‘paan ki dukaan’ (betel shop) — had an adequate balance sheet to support itself, the statement claimed. Kapil Bhatia is the father of Rahul Bhatia. Gangwal has raised concerns about shareholders’ agreement that provides more powers to Bhatia group and about various related party transactions. “The rights and obligations as shareholders of IndiGo were enshrined in the shareholders agreement to reflect their agreement and understandings in relation to the governance, management and operation of IndiGo… the deal was struck between seasoned business people who made their own assessment of risks, their rights, and their obligations,” the statement said.
Rajapaksa’s office said that at present only 102 Army personnel have been assigned to provide security to the former President and of this number, 80 provide security while 22 are administrative personnel. “The Government has started releasing dangerous LTTE suspects who had been held in detention under the PTA. The Rajapaksa government rehabilitated and released over 11,000 LTTE cadres and only two to three hundred hard core terrorists were kept in detention with a view to taking legal action against them. These are the terrorists who are now being released. It need not be stressed that this has placed the life of President Rajapaksa in danger. In these circumstances, it is the duty of the Government to strengthen the security arrangements for former President Rajapaksa by assigning more personnel for his security,” Rajapaksa’s office added. His office said that with the release of the most dangerous LTTE terrorists held in detention, the Government is duty bound to take suitable steps not only to protect former President Rajapaksa but also the other armed forces and civil officers who provided leadership to the war. (Colombo Gazette) Former President Mahinda Rajapaksa has sought more security and also denied reports that 500 army personnel had been assigned to him.Rajapaksa’s office said that media reports that 500 army personnel who had been assigned to the security contingent of former President Mahinda Rajapaksa had been withdrawn, are not true.