SEBI Launches Inquiry Into IndiGo Parent’s Disclosure Practices as Board Faces Rising Scrutiny
The operational crisis that engulfed IndiGo following mass flight cancellations has now widened into a regulatory probe, with the Securities and Exchange Board of India (SEBI) examining whether InterGlobe Aviation, the airline’s parent company, failed to meet mandatory disclosure requirements. What began as a severe pilot duty-time limits (FDTL) breakdown has evolved into a broader corporate governance concern, drawing attention to the role of the company’s board and its oversight committees.
Sources familiar with the development confirmed that the regulator is evaluating whether IndiGo breached SEBI’s Listing Obligations and Disclosure Requirements (LODR) norms during the turbulence that led to widespread passenger disruption and reputational damage.
SEBI Examining Board Committees and Disclosures Amid IndiGo’s Operational Crisis
According to sources, SEBI is conducting a preliminary assessment and may seek formal explanations from the airline if lapses are detected. One person aware of the matter said:
“The disclosure issue is under examination, and the role of the board committees is also being scrutinised. Minutes of the relevant committees are being reviewed.”
This includes scrutiny of the Risk Management Committee (RMC) and Stakeholders Relationship Committee, both core elements of governance that are expected to anticipate operational risks and review compliance gaps.
Regulators are also assessing whether the board was aware of the impending crisis and whether management presented enough warning signals to allow timely intervention. A second source noted that the board minutes will “give a clue” about whether early signs of non-compliance were discussed, and if so, what actions—if any—were planned.
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Exchanges Conducting Parallel Review as First Line of Regulatory Oversight
Alongside SEBI, stock exchanges have been asked to independently evaluate potential disclosure lapses.
“Exchanges are the first line of regulator and must ensure that listed entities follow SEBI’s LODR norms,” one source said.
This dual-layer scrutiny underscores the severity of the concerns surrounding IndiGo’s corporate governance practices, especially given the scale at which the airline operates and the impact of the crisis on passengers and markets.
SES Raises Red Flags: Did IndiGo Fail to Disclose DGCA Show-Cause Notices?
Concerns over disclosure failures were first highlighted by JN Gupta, former SEBI Executive Director and founder of Stakeholders Empowerment Services (SES). The SES report questioned why IndiGo did not inform exchanges about DGCA’s show-cause notice dated 11 August 2025 over the alleged use of “non-approved full-flight simulators.”
SES further pointed out that a second show-cause notice issued on 6 December—during the peak of the operational crisis—also went undisclosed. The report argued that these omissions may constitute violations under LODR regulations, which require timely disclosure of material events impacting operations or business continuity.
Strong Criticism From Proxy Advisory Firms on IndiGo Board’s Role
The SES report was particularly sharp in its critique of InterGlobe Aviation’s board, arguing that governance failures contributed to the crisis. SES highlighted that a Crisis Management Group was established only after the airline had descended into chaos, raising questions about whether early warning signals were ignored.
SES asked whether the Risk Management Committee adequately reviewed potential FDTL non-compliance, noting that a board of seasoned professionals should have foreseen the operational risks associated with crew scheduling norms.
A similar stance was taken by Institutional Investor Advisory Services (IiAS), which said IndiGo’s board “failed not only in managing the crisis but also in taking responsibility for a problem largely of its own making.”
IiAS stated that the delayed formation of a crisis committee, despite mounting operational stress, reflected serious shortcomings in oversight, stakeholder accountability, and preparedness. The firm cautioned that the board’s handling of the situation could strain relations with regulators and customers.
It concluded with a pointed remark:
“Someone needs to step up and demonstrate leadership. It will be a shame if it is the regulator and not the board.”
High-Profile Board Faces Questions on Oversight and Response
InterGlobe Aviation’s board comprises several prominent figures, including:
Rahul Bhatia, Group Managing Director
Amitabh Kant, former Niti Aayog CEO
Vikram Singh Mehta, former Shell India Chairman
Pallavi Shroff, senior corporate lawyer
BS Dhanoa, former IAF Chief
M Damodaran, former SEBI Chairman
Despite this robust expertise, proxy advisors argue the board failed to anticipate the widespread cancellations triggered by pilot duty-time violations.
InterGlobe Aviation Responds: Board Says It Was Fully Engaged
In a statement issued Wednesday, Vikram Singh Mehta, IndiGo’s non-executive chairman, apologised for the disruption caused to passengers and dismissed allegations that the situation was deliberately engineered.
Mehta said claims of an uninvolved board were inaccurate:
“The Board has been closely involved with this matter for many months. Both the Board and the Risk Management Committee have received relevant information from the management on implementation of the rules.”
Emails seeking comment from SEBI and InterGlobe Aviation remained unanswered at the time of publication.
Conclusion: SEBI Probe Marks a Critical Test of Governance for IndiGo
SEBI’s examination of IndiGo’s disclosure practices represents a key moment in the evolving crisis surrounding the airline. As the regulator reviews board minutes, committee roles, and potential lapses under LODR norms, the findings could shape the future of corporate governance standards in India’s aviation sector.
For investors and regulators alike, the central question now is whether IndiGo’s board exercised adequate oversight—or whether disclosures and early warnings were missed in the lead-up to the airline’s worst operational meltdown in years.
