View: Dogfight inside IndiGo’s cockpit

At the heart of the wrangling within the board of directors of IndigoNSE 1.22 % is an unequal shareholders’ agreement that gives one shareholder, Rahul Bhatia, control over the company, although the other principal shareholder, Rakesh Gangwal, holds a stake only one percentage point smaller than Bhatia’s 38%. How valid are such agreements, and how long should they last?

Indigo is a successful company. There is little doubt that Bhatia has been the driver behind that success. Yes, there has been a series of transactions between the airline operation and a string of companies promoted by Bhatia. But unless these are shown to have been at variance with arm’s length norms, there is little that is inherently wrong with such transactions. As Bloomberg columnist Andy Mukherjee has pointed out, these transactions constitute a tiny portion of Indigo’s overall operations.