IndiGo paid Rs 2.1 crore to settle a Sebi case over board disclosure lapses

In February 2021 InterGlobe Aviation, parent of India's largest airline IndiGo, settled a Sebi case over alleged corporate-governance violations by paying Rs 2.10 crore, through a consent order without admitting or denying the findings. The case grew out of the co-founders' public feud: Gangwal complained of governance-code breaches, related-party transactions between the airline and the IGE Group, delayed disclosure of important information to the board, and misrepresentation in the red herring prospectus. Sebi issued a show-cause notice on 10 November 2020.

At the chairman's request the company engaged EY to review five years of related-party transactions — but except for the chairman, no board member, including the audit committee, had access to the report; its findings were merely conveyed by the chairman at the 4 March 2019 board meeting. Sebi's order said the report was necessary for directors to fulfil their responsibilities and should have gone to Gangwal when he asked for it.

When Gangwal requisitioned an extraordinary general meeting on 22 May 2019 to enforce governance protocols, the board rejected it on a legal opinion from a former Supreme Court judge — received on 7 June but shared with directors six minutes before the 12 June meeting, where the Companies Act requires seven days' notice of agenda material. Sebi said that 'cannot be construed as timely'.

Gangwal's allegations also included several counts of violating regulation 23 on related-party transactions. The consent order resolved the proceedings without adjudicated findings or admission — but the payment put a price on governance failures at the top of India's biggest airline, whose co-founder dispute had already turned related-party deals and disclosure lapses into a public regulatory case.

Rs 2.10 crore in settlement charges paid to Sebi in February 2021, settling without admitting or denying the findings

An independent EY review of related-party transactions was commissioned by the chairman and seen by no other director, including the audit committee.

The board rejected a co-founder's EGM requisition based on a legal opinion circulated six minutes before the meeting, against the Companies Act's seven-day norm.

The airline faced allegations of delayed disclosure of material information and misstatements in its red herring prospectus during its rise to listing.

The co-founder feud made the governance lapses public, turning internal disclosures into a regulatory show-cause and a paid settlement.

A board that sees only what its chairman forwards is not a board: withholding an adverse report from directors converts a family feud into a regulatory case.

Sebi's consent order of 9-10 February 2021 closed the proceedings on payment of Rs 2.10 crore, with InterGlobe Aviation neither admitting nor denying the findings; the underlying co-founder dispute over governance and related-party transactions continued separately.