The board of AirAsia Berhad, which owns 49% of AirAsia India, refuted strongly all the allegations made in a first information report (FIR) by the Central Bureau of Investigation (CBI) that senior executives bribed Indian government officials and said it will vigorously challenge the charges.
“We question the motives of the unnamed person, persons or organisation that lodged this FIR but we will cooperate fully with the Indian authorities in accordance with due process provided in law,” the Malaysian airline said in a statement.
Tata Sons owns 49% in AirAsia India and AirAsia India chairman S Ramadorai and director R Venkataramanan own the remaining 2%.
CBI has accused AirAsia India, AirAsia Berhad, and senior executives, including Group CEO Tan Sri Tony Fernandes and Deputy Group CEO Bo Lingam, and unnamed government officials, among others, for allegedly bribing government officials to secure permission to fly abroad.
The board of AirAsia Berhad said it supported Fernandes and blamed former CEO of AirAsia India for engaging firms that are under the CBI’s radar in the case.
CNBCTV18.com had reported on June 4 that it was Fernandes who asked Chandilya to hire HNR to act as an agent to assist in the airline’s “regulatory and corporate affairs liaising”, a euphemism for lobbying.
The statement has refuted all the key charges by CBI. Edited excerpts:
AirAsia India was indirectly controlled and operated by AirAsia Berhad via the Brand Licensing Agreement (BLA) between the parties thus violating the Foreign Investment Promotion Board norms which require substantial ownership and effective control to be in the hands of Indian nationals;
AirAsia Berhad’s response: This has been refuted by no less than the Director General of India’s Directorate General of Civil Aviation who extensively reviewed the BLA and in a report dated February 8, 2017 filed in the High Court of Delhi stated that he did not find that the terms and conditions laid down in BLA “dilute the substantial ownership and effective control of AirAsia India being vested with Indian nationals.” Allegation 2:
Unknown public servants have engaged in a criminal conspiracy involving AirAsia Berhad, AirAsia India, Fernandes, Lingam, four other named parties and unknown public servants and unknown private persons to expedite the approval process and change in aviation policies to suit AirAsia India by lobbying with stakeholders in the Government of India through non transparent means.
AirAsia Berhad’s response: All required approvals were obtained through normal channels and it took more than a year to get these approvals. Given Tata’s more than 100 years track record and that of AirAsia’s reputation, we refute any inference of impropriety in obtaining these approvals. AirAsia India as with others in the aviation industry lobbied the government of India to remove the 5/20 rule (which prevented flying abroad) that inhibits competition and the development of a healthy aviation sector that ensures for the benefit of the Indian consumer but this was done in compliance with the law and certainly without any unlawful payments. Further, AAGB has had an internal review and concluded that there has been no wrongdoing by either Fernandes or Lingam. Allegation 3:
Sham contracts were entered into with Travel and Total Food Services, HNR Trading Pte Ltd and DTA Consulting, which were utilised for paying bribes to unknown public servants.
AirAsia Berhad’s response: Apart from the contract with HNR Trading Pte Ltd, the contracts referred to in the FIR were entered in the ordinary course of business for services rendered on normal commercial terms. All contracts entered into by AirAsia India at the relevant time were under the watch of the then CEO, Mittu Chandiliya. AirAsia India has lodged an FIR against Mr Mittu Chandiliya in 2017 over the contract with HNR Trading Pte Ltd which was unauthorised by the company. AirAsia India has also submitted a forensic audit report by a leading accounting firm in India to show that funds were illegally siphoned out of the compan y through that unauthorised contract. We believe that the Bangalore police are still investigating although much time has lapsed.