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Gangwal opposes resolution, picks holes in proposed board structure; chairman dismisses concerns

IGAL informed the BSE that the website where Mr. Gangwal posted his letter was not authorised by the company. Reuters

The boardroom battle between the two co-founders of IndiGo is far from over, with Rakesh Gangwal opposed to the resolution proposed to address his concerns over “unusual” powers enjoyed by Rahul Bhatia.

Early on Tuesday, Mr. Gangwal made public a letter he wrote to the board on August 5, asserting that the ‘package’ proposed to resolve issues flagged by him, which included expanding the board to include 10 members, would only further empower Mr. Bhatia.

Board of seven

He, instead, suggested a board of seven members from the existing six. In response, IndiGo’s parent company, InterGlobe Aviation Limited (IGAL), shared the reply of the chairman of the board M. Damodaran, rejecting these fears.

“All of us realised that the proposed board structure created a large loophole that gives the IGE Group additional powers that they do not have today. Essentially, when there are less than 4 independent directors, it would allow the IGE Group to pass any company policy that they want just on the basis of their board numbers being larger than all the other board members combined,” Mr. Gangwal said in his letter, which has also been sent to Ministry of Corporate Affairs, SEBI and BSE.

In this powerful position, the IGE could change the RPT policy, Mr. Gangwal has alleged.

He said that unless the loophole was resolved, he would not be able to vote in favour of the amendments to the Articles of Association.

“Seeking shareholder approval for the new board size without closing this large loophole is governance negligence and tramples on the rights of minority shareholders.”

To break this impasse, Mr. Gangwal proposed adding a woman independent director to the existing Board of six directors.

However, Mr. Damodaran responded to Mr. Gangwal’s e-mail dismissing his concerns, which was shared by IndiGo with the stock exchanges.

The reply states that the four new members would include an independent woman director, a whole-time executive director, an independent director and a nominee of the IGE Group.

This would effectively mean only one additional nominee of IGE on the Board. Mr. Damodaran wrote that the concerns raised by Mr. Gangwal “do no credit to the IDs (Independent Directors) that will be on the board, or to the fiduciary responsibilities of the directors, including those nominated by the IGE Group.”

‘No separate meetings’

Mr. Damodaran has also assured that following the annual general meeting of the shareholders, there will be separate meetings to finalise the RPT policy and appoint an independent woman director.

The IGAL also informed the BSE that the website where Mr. Gangwal posted his letter was not authorised by the company and therefore its contents should not be relied upon.

Cash flow of ₹1,000 crore from existing customers can be used to extend new home loans: bankers

Soft landing: DHFL said the that there will be no principal haircuts to any of the creditors. Reuters

Cash-strapped mortgage lender Dewan Housing Finance Corporation Ltd.’s (DHFL) plans to borrow ₹1,000 crore to ₹1,200 crore from banks every month — as part of its proposed resolution plan — may fall flat with the lenders, who may extend fresh loans only after a new promoter comes in.

According to bankers involved in the resolution of DHFL, since the mortgage finance company will get a moratorium on repayment, they won’t be extending any fresh loans.

DHFL wanted banks to lend so that it can start extending home loans to its customers.

“DHFL still has a cash flow of about ₹1,000 crore from existing customers which can be used for fresh lending since they do not have to pay interest to the banks due to the moratorium,” said a banker in the know of the developments.

“Banks will start fresh lending only after there is a new promoter,” the official said.

Talks with investors

DHFL is in talks with a few investors, and have kept banks in the loop, to sell a significant part of the promoters’ stake.

Promoters hold about 39.21% stake in DHFL. Bankers want promoters’ stake to fall below 10% after the stake sale as part of the resolution plan.

On Tuesday, the board of DHFL took on record the draft resolution plan formulated by the company in consultation with the special committee on resolution plan and its financial advisers viz. Ernst & Young, and approved the submission of the plan to the lenders, the company informed the stock exchanges.

DHFL said there would be no principal haircuts to any of the creditors, and there will be a moratorium on repayments. DHFL will also seek funding from the banks/National Housing Bank (NHB) to help commence retail funding activity, according to the plan. DHFL shares rose 32% to close the day at ₹55.40.

While banks want all the creditors, including mutual funds and insurance companies, to be part of the resolution plan, mutual funds have not yet given their consent and want approval from the markets regulator.

Banks have requested the Reserve Bank of India to take up the matter with SEBI so that the resolution plan can be implemented in totality. DHFL’s debt is about ₹80,000 crore.

Separately, the company also said that one of the joint statutory auditors of the company — Deloitte Haskins & Sells LLP — has resigned as statutory auditors with immediate effect.

Venture to build on RIL’s network, eyes 5,500 sites in 5 years

Mukesh Ambani

BP and Reliance Industries Ltd. (RIL) will form a joint venture (JV) to set up petrol pumps and retail aviation turbine fuel (ATF).

The joint venture will include a retail service station network across India, said both the companies in a joint statement without disclosing the deal amount.

RIL will hold 51% in the JV while BP will have the remaining 49% stake.

Building on RIL’s existing Indian fuel retailing network and an ATF business, the partners expect the JV to expand rapidly to help meet India’s fast-growing demand for energy and mobility.

India is expected to be the fastest-growing fuel market in the world over the next 20 years, with the number of passenger cars in the country estimated to grow almost sixfold over the period.

The JV will incorporate and build on RIL’s current fuel retailing network of over 1,400 sites across India, which the partners aim to grow rapidly to up to 5,500 sites over the next five years.

The JV will also include RIL’s aviation fuels business, which currently operates at over 30 airports across India, providing participation in this rapidly-growing market.

Mukesh Ambani, CMD, RIL and BP’s CEO Bob Dudley signed heads of the agreement for the venture on Tuesday.

Mr. Ambani said: “Our robust partnership in developing gas resources in India has now expanded to fuel retailing and aviation fuels. This transformative partnership will deepen our engagement with the consumers in further enhancing the world-class services across the country.”

Mr. Dudley said: “BP is already a large investor here and we see further attractive, strategic opportunities to support this growth.

“Together we will work to provide consumers across India the high-quality fuels, convenience retail and services they need, continuing to drive modernisation and mobility solutions across the country,” he added.

Aastha Minmet India and Juggernaut Projects plan to sell their land parcels

The Aastha group has already paid ₹32 crore out of the total ₹158 crore over the last three years.Getty Images/iStockIldo Frazao

The ₹5,574-crore settlement crisis at the National Spot Exchange Ltd. (NSEL), which came to light six years ago, could finally see some money being recovered as two of the accused entities have filed a proposal to pay ₹100 crore to settle their outstanding dues.

Aastha Minmet India and Juggernaut Projects, both belonging to the Aastha Group, have filed an application at the MPID Court, which is hearing the NSEL matters.

‘No fraudulent intention’

MPID refers to the Maharashtra Protection of Interests of Depositors (in Financial Establishments) Act, under which cases have been filed against the accused entities. While the entities have proposed to pay ₹100 crore by selling their land parcels located at Hyderabad and Cuttack, the settlement proposal also states that if there are outstanding dues after disposing the assets, the same would be repaid within 12 months of the court’s approval of the settlement plan. “We have no fraudulent intention and would like to settle the payment of ₹100 crore as proposed on behalf of Aastha Minmet India Ltd. and Juggernaut Projects Limited,” Mohit Singhal, MD, Aastha Group, told The Hindu. “In due course of the investigation, the real facts of the situation will emerge. It has been over five years and yet the liabilities are not ascertained. There has been no recovery in this case and hence our offer towards settlement is an earnest step in that direction. We can only offer but the authorities need to come forward and accept or suggest some solution,” he added.

The money trail in the case of Aastha Group, as established by the Enforcement Directorate, is pegged at ₹180 crore, while the claim by NSEL is ₹230 crore. The Bombay High Court has passed a decree while fixing the total liability of Aastha Group at ₹158 crore. The group has already paid ₹32 crore over three years and is now proposing to settle the outstanding dues of ₹126 crore by paying ₹100 crore.

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