The group said it would pursue all legal remedies to address the allegations against AirAsia Bhd, AirAsia India Pte Ltd, AAGB Group CEO Tony Fernandes and his deputy Bo Lingam, which it described as “baseless, unsupported and unjustified”.
This follows reports by the media in India that the Central Bureau of Investigation (CBI) has registered an FIR against the parties named above 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,” AAGB said in a statement today.
Among the allegations is that unnamed public servants had engaged in a criminal conspiracy involving AirAsia Bhd, AirAsia India, Fernandes, Lingam, and four other named parties and unknown private persons to expedite the approval process and change in aviation policies to suit AirAsia India.
This was reportedly by lobbying stakeholders in the Indian government through non-transparent means.
The group said all required approvals were secured through normal channels and took over a year to obtain.
AAGB also said it had entered into a joint venture with Tata Sons Ltd to set up a low-cost carrier in India mainly due to the latter’s “sterling reputation and integrity”.
AirAsia Investments Ltd holds 49% equity interest in AirAsia India while the controlling share of 51% is held by Indian entities, namely Tata Sons Ltd (49%) and two individuals on the board (2%) who are Indian nationals.
“Given Tata’s more than 100-year track record and that of AirAsia’s reputation, we refute any inference of impropriety in obtaining these approvals,” the group said.
AirAsia India had lobbied the Indian government to remove the 5/20 rule – the requirement that domestic carriers must have five years of operational experience and at least 20 aircraft in order to fly overseas.
AAGB said this was done in compliance with the law, without any unlawful payments.
The group added that it had done an internal review and concluded that there was no wrongdoing by either Fernandes or Lingam.
On the allegation that sham contracts were entered into with Travel and Total Food Services, HNR Trading Pte Ltd and DTA Consulting to bribe unknown public servants, the group said apart from the contract with HNR Trading, the contracts referred to in the FIR were entered in the ordinary course of business for services rendered on normal commercial terms.
On the deal with HNR Trading, it said AirAsia India lodged an FIR last year against its then-CEO, Mittu Chandiliya, over the “unauthorised” contract, as at the relevant time all contracts signed by the carrier were under his watch.
The group said AirAsia India had 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. It said it believed the Bangalore police were still investigating although much time had lapsed.
Another allegation in the FIR is that AirAsia India is indirectly controlled and operated by AirAsia Bhd via the brand licensing agreement (BLA) between the parties, thus violating the Foreign Investment Promotion Board norms that require substantial ownership and effective control to be in the hands of Indian nationals.
AAGB said this had been refuted by the director-general (DG) of India’s Directorate General of Civil Aviation.
In a report dated Feb 8, 2017, filed in the Delhi High Court, the DG said he did not find that the terms and conditions laid down in the BLA “dilute the substantial ownership and effective control of AirAsia India being vested with Indian nationals”.