AirAsia Group has "vigorously" denied allegations of bribery and corruption levelled by India's Central Bureau of Investigation (CBI) against its AirAsia India (Bengaluru International) unit and several executives.
On Tuesday, May 29, the CBI said it had registered a case against the LCC for colluding with the former United Progressive Alliance (UPA) government to alter India's "5/20" rules and, at the same time, violate effective-control regulations. The former govern an Indian carrier's ability to launch commercial international flights.
According to the CBI, those named in the case include Group Chief Executive Officer (CEO), Tony Fernandes, as well as several other executives and then government officials.
The law enforcement agency alleges that the accused conspired with the intent to help AirAsia India/Private Airlines (India) Ltd. to expedite the approval process and change national aviation policies to suit their needs. It further alleged that the then Foreign Investment Promotion Board (FIPB), as well as foreign investment caps, were violated by these individuals by giving effective control of AirAsia India to a foreign entity by making the said Private Airlines (India) Ltd. a de-facto subsidiary indirectly rather than a joint venture.
"It was also alleged that the said company of Bengaluru (AirAsia India) had used several persons at the behest of said Group Controller in lobbying unspecified officials in the Ministry of Civil Aviation for said company to gain favourable decisions," it said.
The CBI then claimed that AirAsia India paid the aforementioned civil servants bribes in return for the granting of an Air Operator's Permit (AOP) as well as an international scheduled air transport service licence. An effort was allegedly made in the Ministry of Civil Aviation to remove/amend the 5/20 rule as well.
Since the opening of the case, the CBI said searches had been carried out at five places in Delhi, Mumbai, and Bangalore during which time various unspecified documents were seized.
AirAsia Group has since denied the CBI's accusations and contentions, adding that it believes the accusations to be "trumped up", "baseless", and motivated by considerations that as yet remain unknown.
"Allegations concerning indirect foreign control of AirAsia India Limited have been fully investigated and the Director General of Civil Aviation had effectively ruled that the operations and management of AirAsia India Limited ("AAIL") was in accordance with FEMA (Foreign Exchange Management Act) as well as FDI (Foreign Direct Investment) Regulations," the Group sai in a Bursa Malaysia disclosure.
"AirAsia completely denies these accusations, and will vigorously defend itself against these to the fullest extent of law. Legal action to protect AirAsia and its interests against these allegations will be taken against any person who is known to have maliciously and frivolously instigated, and or smeared the good reputation of individuals and shareholders of AirAAsia India."
