AirAsia strongly refutes India CBI allegations

PETALING JAYA: AirAsia Group Bhd (AAGB) lambasted the Indian Central Bureau of Investigation’s (CBI) first information report (FIR) lodged against the low-cost airline, based on information from an unnamed “reliable source.”
“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,” it said in a filing with the stock exchange.
AAGB refuted strongly all the allegations made in the FIR as baseless, unsupported and unjustified and will vigorously challenge these allegations.
The FIR claimed that unknown public servants have engaged in a criminal conspiracy involving AAGB, AirAsia India, group CEO Tan Sri Tony Fernandes, deputy CEO Bo 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 Indian government through non-transparent means.
AAGB explained that its move, together with other aviation players, to lobby the Indian government to remove the 5/20 rule was done in compliance with the law and without any unlawful payments. The 5/20 rule inhibits competition and the development of a healthy aviation sector that endures for the benefit of the Indian consumer.
“Further, AAGB has had an internal review and concluded that there has been no wrongdoing by either Fernandes or Lingam.”
AAGB said the joint venture with Tata Sons Ltd to set up its low cost carrier in India carrying the AirAsia brand, was primarily due to the sterling reputation and integrity of Tata Sons in India.
“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 Investments Ltd holds 49% equity in AirAsia India, while the remaining 51% is owned by Tata Sons (49%) and two individuals on the board (2%) who are Indian nationals.
AAGB reiterated that all the allegations in the FIR are unfounded and are without any rational basis and are wholly inconceivable in the context of corporate governance norms in Malaysia.
“Accordingly AAGB denies all allegations of wrongdoing and will pursue all legal remedies available to address these allegations.”
Meanwhile, AAGB said AirAsia India lodged an FIR against former CEO Mittu Chandilya last year over the contract with HNR Trading Pte Ltd which was unauthorised by the company.
It also submitted a forensic audit report by an accounting firm in India to show that funds were illegally siphoned out of the company through that unauthorised contract.
“We believe that the Bangalore police are still investigating although much time has lapsed.”