Arun Bhatia, the owner of Delhi-based investment firm Telstra Tradeplace, has claimed AirAsia India (Bengaluru International) is effectively controlled by AirAsia (AK, Kuala Lumpur International) in contravention of Indian investment laws.
Speaking to The Economic Times, Bhatia said the Malaysian budget carrier's CEO Mittu Chandilya acted on the instruction of AirAsia Group's founder and CEO Tony Fernandes, and was in fact solely a figurehead. He also claimed that his concerns about the airline's poor financial performance and AirAsia's associated 'back-end' insurance and MRO contracts had either been dismissed or simply ignored by other shareholders.
"I was promised at the last board meeting in November that the issues I have complained against would be resolved. They haven't been resolved and hence I decided not to attend," he said adding that as an interim measure, he would pursue his concerns through either the courts or through the Indian government.
Bhatia also noted that his original 21% shareholding in the company had been whittled down to 10% in August after he refused to participate in a cash call. Though the Malaysians and Tata contributed, Bhatia justified his refusal on the grounds that the carrier had failed to make a return on its initial USD30 million investment. He has also refused in a the latest call for investment, this time for USD22 million.
"I will neither invest further nor use the right of first refusal this time until the airline improves its performance and I am given details of all the matters I have raised," he said.
Given the airline's alleged poor performance and growing strains in his relationship with the other two investors, Bhatia said he would look to exit AirAsia India albeit at a premium.
Unsurprisingly, the LCC has denied Bhatia's claims insisting it is a board-driven company with no single shareholder calling the shots.
Founded in 2013, AirAsia India operates six A320-200s on flights to ten destinations across India.
