India’s largest airline, IndiGo, is facing turbulence following an alleged rift between its co-founders Rakesh Gangwal and Rahul Bhatia, which has also spooked the shareholders.

Bhatia holds about 38% in InterGlobe Aviation, the holding company of IndiGo, while Gangwal holds about 37%. The low-cost carrier was founded in 2006 and currently enjoys a market share of 46.9%, and a fleet of more than 200 aircraft.

Gangwal, a former executive of United Airlines and US Airways, was instrumental in the aggressive expansion of the airline, while Bhatia handled its public and regulatory affairs.

The differences between the founders relate to strategy and shareholders’ agreement. Gangwal wants the airline to remain a budget carrier and is reportedly against a tie-up with any other airline. He is also not keen on diluting his equity. Bhatia, on the other hand,  is open to a tie-up with a foreign airline, possibly a full-service carrier, Live Mint reports. The founders have now hired law firms to resolve the differences outside the courts.

Although the two founders enjoy almost equal stakes in the airline, Bhatia wields much greater control over the board and management. His holding company Inter-Globe Enterprises (IGE)has the right to appoint key managerial personnel, including the chairman, managing director, CEO and president. It also has the right to nominate three non-independent directors, one of whom will be non-retiring.

The Rakesh Gangwal (RG) Group, on the other hand, has the right to nominate just one non-independent director, who will be a non-retiring director.

Currently, IGE has operational control over the company and its management. The RG Group is required to fully comply with the shareholders’ agreement and the articles of association, and its voting during general meetings is to be dictated by IGE.

The contentious shareholders’ agreement will expire in October this year and Gangwal is keen to change some clauses and also bring changes in the articles of association. However, this will require a special resolution and 75% approval from shareholders.

IndiGo chief executive Ronojoy Dutta has tried to reassure employees by writing an email to them.

Also Read: IndiGo faces pilot shortage, flights hit