Damodaran’s suggestion was against what was proposed by Gangwal, who had alleged that the new proposed structure of the board will only add to the powers already enjoyed by InterGlobe Enterprises (IGE), owned by fellow co-founder Rahul Bhatia.
And if the proposed structure was cleared at the AGM, it would lead to further governance issues, Gangwal had argued. He wanted the steps to be taken before the AGM.
Khanna was writing in response to Damodaran’s mail on August 5.
Damodaran, who was replying to Gangwal, had reiterated that once the amendment to IndiGo’s Articles of Association gets shareholders’ nod in the upcoming AGM, the board will proceed with its expansion.
“The fear that, in the interim, the IGE group will push through questionable decisions, does 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,” Damodaran had said.
Responding to this, Khanna said the “risk of questionable decisions has nothing to do with the competence or integrity of the independent directors. The safeguard is precisely for situations when the full complement of independent directors is not in place and IGE with its numbers can ride roughshod over the opposition of all other directors.”
Khanna added: “Needless to say, a tremendous trust deficit has built up that we as a board must wring out, but that will take time and we need confidence-building measures today.”
He further gives an instance where, as the chairman of IndiGo’s nominations and remuneration committee, Khanna was “stymied from taking proper and timely action on inducting a woman director or indeed the second independent director.”
Responding to Damodaran’s suggestion of having the meetings after the AGM on August 27, Khanna said he didn’t see any logic behind this.
“If a meeting is necessary, it should be held before the AGM,” he said.