IiAS puts Bhatia, IndiGo board under the scanner

Institutional Investor Advisory Services India Ltd (IiAS) has faulted IndiGo promoter and managing director (MD) Rahul Bhatia for not leading from the front when the airline is facing its most challenging operational episode, even as it has sought a review of the current board structure which allows him to nominate half of the board.

- Dipali Banka & Abhishek Law

The airline's senior leadership, including chief executive officer Pieter Elbers, have faced a nationwide backlash for flight cancellations, halting the country’s booming aviation sector in the first week of December. Bhatia who founded IndiGo in 2006 along with his friend Rakesh Gangwal, owns 35.7% in Inter Globe Aviation Ltd, the airline's parent.

“[AIs the only executive director on the board and the company’s promoter, it was expected of Rahul Bhatia to lead from the front, rather than from the sidelines,” IiAS said in a note on Friday. “Given that Rahul Bhatia’s role significantly overlaps with responsibilities typically assigned to a CEO, it is unclear how the board has apportioned the responsibilities between the managing director and the CEO.”

IiAS also faulted the composition of the IndiGo board, noting that according to its Articles of Association, the Bhatia-led Inter Globe Enterprises (IGE) Group has the authority to nominate five non-independent directors, resulting in the nomination of half the board.