AirAsia CEO Tony Fernandes seems to have landed himself in a soup. The Malaysia-born aviation tycoon, who wanted his Indian airline venture to fly internationally, was on Tuesday named in an FIR filed by the CBI. The central investigative agency has booked nine individuals on charges of corruption and criminal conspiracy.
The accused, according to the CBI, allgedly bribed government officials to secure international flying permit for AirAisa India at a time when 5/20 rule was in place. The rule, that came into effect in 2004, mandated airlines to have five years of experience and a minimum of 20 aircraft-fleet to fly on international routes.
The CBI has said that the payments to the tune of Rs 12.28 crore were remitted to India to lobby with public servants during the UPA rule. The investigating agency alleged that the AirAsia Group has also violated rules set by the now defunct FIPB (Foreign Investment Promotion Board) and FDI (Foreign Direct Investment) norms by giving management control to a foreign entity, and making AirAsia India a de-facto subsidiary of AirAsia Group in the process.
"We have filed a case against Air Asia chief Tony Fernandes, his colleagues and government officers over procuring licences illegally," CBI official RK Gaur had told AFP. So far, CBI sleuths have raided AirAsia offices in Delhi, Mumbai, Bengaluru and Gurugram.
The no-frills carrier is a joint venture between Tata Sons and AirAsia Berhad. The airline started operations in 2013 and currently has a fleet of 18 Airbus A320s. In 2016, as part of the new aviation policy, the government scrapped the controversial 5/20 norm, paving way for domestic airlines to fly overseas provided they deploy 20 planes or 20 per cent of their total capacity for domestic operations. The move benefited AirAsia India and Vistara.
Among those named in the FIR include top Tata Trusts executive R Venkataramanan. According to a report in The Economic Times, Venkataramanan, who is also a Director at AirAsia, allegedly gave personal assurances from the then civil aviation minister Ajit Singh. "Met Mr Ajit Singh a short while ago. He said approvals should come soon and that our planning should be on the basis of the 5/20 rule getting scrapped," Venkat reportedly wrote to top AirAsia executive Tharumalingam Kanagalingam, who is also named in the CBI FIR.
Meanwhile, AirAsia India has refuted any wrong doing and is co-operating with all regulators and agencies to present the correct facts. "In November 2016, AirAsia India had initiated criminal charges against its ex-CEO and had also commenced civil proceedings in Bangalore for such irregularities. We hope to bring early resolution to all such issues," Shuva Mandal, Director at AirAsia India said in an official statement.
The agency has also named Rajender Dubey, Director of Singapore-based HNR Trading Pte Ltd, Sunil Kapur, Chairman Total Food Services, Mumbai and Deepak Talwar, Principal and Founder DTA Consulting, New Delhi and the company HNR Trading as alleged lobbyists who used their influence to get 5/20 rule relaxed "before General Elections of 2014."
The airline has been facing headwinds in the country for quite some time. The market share of AirAsia India stood at 5 per cent in April. Recently, the airline's CEO and MD Amar Abrol resigned from his position, and is reportedly moving back to the group headquarters in Malaysia to work on other projects. Two years ago, a Deloitte Touche investigation into Air-Asia India unearthed irregularities in the financial transactions of about Rs 22 crore involving its former CEO Mittu Chandilya.
Last year, ousted Tata Sons Chairman Cyrus Mistry had alleged that Venkatramanan wanted to cover up the murky transactions at AirAsia India.
Fernandes, whose entrepreneurial journey is somewhat akin to Richard Branson, was in the music business before he decided to buy debt-ridden AirAsia. He has worked at Branson's Virgin Communications and Warner Music.