Explained: What & Why of IndiGo row

According to the IGE, Rakesh Gangwal has always limited its financial risk in the airline. Even when the airline operations were at risk Gangwal was missing and even pushed to sell out the business.

IndiGo promoters Rahul Bhatia and Rakesh Gangwal

Published : Jul 15, 2019, 8:01 PM IST

Updated : Jul 16, 2019, 1:02 PM IST

New Delhi: Tussle between the promoters of the IndiGo might make it's future difficult in the aviation industry as its promoters Rahul Bhatia and Rakesh Gangwal are playing the blame game on each other.

Rahul Bhatia one of the promoters said, "The InterGlobe Enterprises( IGE ) Group would have invested more equity, but given that Rakesh Gangwal did not have the appetite to invest more, IndiGo's paid-up equity capital was pegged at Rs 30 crore, the minimum required by regulations".

According to the IGE, Rakesh Gangwal has always limited its financial risk in the airline. Even when the airline operations were at risk Gangwal was missing and even pushed to sell out the business.

In the year 2005, when a conversation with the Airbus was underway for the airline to acquire it, Airbus wanted both IGE and Gangwal to support IndiGo through the joint undertaking. Both the parties undertook to invest an amount not less than Rs 200 crore.

IGE singly invested Rs 110 crore in IndiGo just to fullfill the conditions placed by Airbus. IGE also added that Gangwal's allegations about lack of corporate governance were "much ado about nothing".

Airline Co-promoter and former US Airways chief Executive Rakesh Gangwal went on record to lodge its grivences against IndiGo. He also sought regulatory intervention from SEBI to resolve the issue.

According to the IGE, Rakesh Gangwal has always limited its financial risk in the airline. Even when the airline operations were at risk Gangwal was missing and even pushed to sell out the business.

Airline Co-promoter and former US Airways chief Executive Rakesh Gangwal went on record to lodge its grivences against IndiGo. He also sought regulatory intervention from SEBI to resolve the issue.

ZCZC
PRI ECO GEN INT
.BEIJING FGN10
CHINA-ECONOMY-2NDLD GROWTH
China's GDP growth slows to 6.2 per cent in Q2, weakest in 27 years
By K J M Varma
(Eds: Updating with more inputs)
Beijing, Jul 15 (PTI) China's growth has slumped to 6.2 per cent in the second quarter of this year, its lowest level in nearly three decades, the government said Monday, as the world's second largest economy feels the pinch of a bruising trade war with the US and weak global demand.
The Gross Domestic Product (GDP) growth slid from 6.4 per cent in the first quarter of 2019, according to government data released on Monday.
While the slowdown to 6.2 per cent is a 27-year low, it raised concerns as the once resilient Chinese economy did not dip below 6.4 per cent even during the 2009 world economic crisis during which the largely export dependent country came under heavy pressure due to the steady fall in its foreign trade.
China's GDP expanded 6.3 per cent year-on-year in the first half of 2019 to about 45.09 trillion yuan (about USD 6.56 trillion), according to data released by China's National Bureau of Statistics (NBS).
The growth, however, was in line with the government's annual target range of 6.0-6.5 per cent for the whole year, down from the 6.6 per cent growth China put up in 2018.
A breakdown of the data showed output of the service sector, which accounted for 54.9 per cent of the total GDP, rose seven per cent in the first half of the year, outpacing a three per cent increase in the primary industry and a 5.8-per cent rise in the secondary industry.
Consumption appeared to play a bigger role in driving economic growth as it contributed 60.1 per cent to the economic expansion in the January-June period, which officials consider encouraging. But the concerns remain as China's imports declined by 7.3 per cent in June.
Since 2009, China has been trying hard to rejig its export dependent economy to the one more dependent on domestic consumption to halt the slowdown.
The economic data is still facing downturn pressure (in the second half of the year). While there are also many positive factors, the market vitality is gradually being stimulated, NBS spokesman Mao Shengyong told the media while releasing the data.
The economic performance was generally stable and remained within a reasonable range, with progress being made in certain areas, he said.
In the first half of the year, 7.73 million new jobs were created in urban areas, completing 67 per cent of the annual target, the data said.
At the end of the second quarter, the total number of rural migrant workers stood at 182.48 million, an increase of 2.26 million over the same period last year, up 1.3 per cent year-on-year.
Another encouraging sign was that that China's marginalised private sector provided the main driver of industrial growth, expanded by 8.3 per cent in June and 8.7 per cent in the first half of the year, compared with 6.2 per cent and 5.0 per cent for state-owned enterprises over the same periods, respectively.
China's retail sales of consumer goods rose 8.4 per cent year-on-year in the first half of 2019 to 19.52 trillion yuan (USD 2.85 trillion), the NBS data said.
Online sales surged 17.8 per cent year-on-year to 4.82 trillion yuan in the first half, 2.5 percentage points faster than the first quarter.
Retail sales in rural areas rose 9.1 per cent year-on-year, outpacing the 8.3 per cent expansion of retail sales in urban areas in the first half year.
In June, retail sales expanded by 9.8 per cent year-on-year to 3.39 trillion yuan, 1.2 percentage points higher than the previous month.
Also China's value-added industrial output, an important economic indicator, expanded six per cent year-on-year in the first half, NBS said.
But the growth rate was 0.5 percentage points lower than that recorded in the first quarter of the year, it said.
High-tech industries maintained fast expansion, with the output for high-tech manufacturing up nine per cent year-on-year, three percentage points faster than overall growth.
The value-added output of new energy vehicles and solar cells grew 34.6 per cent and 20.1 per cent, respectively.
China's value-added industrial output is used to measure the output of large companies each with annual main business revenue of more than 20 million yuan (about USD 2.9 million), according to state-run Xinhua news agency.
The US and China - the world's two largest economies - have been fighting a damaging trade war over the past year.
The US has imposed tariffs on USD 250 billion in Chinese imports, drawing retaliatory sanctions from Beijing on USD 110 billion in US products.
President Donald Trump is asking China to reduce its massive trade deficit with the US which last year climbed to over USD 539 billion. He has also asked China to workout verifiable measures for the protection of intellectual property rights, technology transfer and more access to American goods in China.
The trade war with the US has hit demand for China's goods, compounding slowing demand from the rest of the world. PTI KJV PMS
AKJ
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Last Updated : Jul 16, 2019, 1:02 PM IST

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Explained: What & Why of IndiGo row

According to the IGE, Rakesh Gangwal has always limited its financial risk in the airline. Even when the airline operations were at risk Gangwal was missing and even pushed to sell out the business.

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