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AirAsia Group: Lobbying for 5/20 norm removal done without any unlawful payments

By: PTI | New Delhi |

Published: June 19, 2018 5:06:18 pm

AirAsia Group: Lobbying for 5/20 norm removal done without any unlawful payments The CBI has filed an FIR in the AirAsia case where Tony Fernades and Bo Lingam are among those named in it. (File)

Malaysian carrier AirAsia Group Berhad Tuesday said that lobbying for the removal of 5/20 norm was done without making any “unlawful payments” and all the required approvals for its Indian joint venture with Tatas were obtained through normal channels.

The latest statement comes against the backdrop of the CBI probing AirAsia and other officials, including Group CEO Tony Fernandes, for allegedly trying to manipulate government policies through corrupt means to get an international licence for AirAsia India.

In a detailed statement, the AirAsia Group Berhad’s (AAGB) said it had entered into the joint venture with Tata Sons Ltd to set up the low-cost carrier in India under the AirAsia brand “primarily because of the sterling reputation and integrity of Tata Sons Ltd in India”.

The Malaysian group holds 49 per cent stake in AirAsia India while the rest is with the Tatas. Two per cent shareholding is with two Tata group officials.

“All required approvals were obtained through normal channels and it took more than a year to get these approvals.

“… AirAsia India as with others in the aviation industry lobbied the government of India to remove the 5/20 rule that inhibits competition and the development of a healthy aviation sector that enures for the benefit of the Indian consumer but this was done in compliance with the law and certainly without any unlawful payments,” AAGB said.

The 5/20 norm — which required local airlines to be in operation for at least five years and a minimum fleet of 20 planes in order to start overseas operations — was done away with in 2016. AirAsia India started operations in 2014.

The AAGB also said an internal review was carried out and that there has been no wrongdoing by either AirAsia Group CEO Tony Fernandes or Deputy Group CEO Bo Lingam.

The CBI has filed an FIR in the AirAsia case where Tony Fernades and Bo Lingam are among those named in it. The board of AAGB has refuted all the allegations made in the FIR as “baseless, unsupported and unjustified” and would vigorously challenge them, as per the statement.

“We question the motives of the unnamed person, persons or organisation that lodged this FIR but we will co-operate fully with the Indian authorities in accordance with due process provided in law,” it added.

The statement also mentioned about alleged sham contracts entered into with Travel and Total Food Services, HNR Trading Pte Ltd and DTA Consulting which was utilised for paying bribes to unknown public servants.

“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 Mittu Chandiliya in 2017 over the contract with HNR Trading Pte Ltd which was unauthorised by the company,” the statement said.

According to the statement, 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 company through that unauthorised contract.

Noting that all the allegations are wholly inconceivable in the context of corporate governance norms in Malaysia, the AAGB said it would pursue all legal remedies available to address them.

Last month, AirAsia India said it would be “incongruous” to allege that the control of the airline is not in accordance with foreign exchange investment laws.

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