AirAsia named in UK's bribery case against Rolls-Royce

Nigel Aw

Modified 22 Jan 2017, 5:31 am

UK's Serious Fraud Office (SFO) has named AirAsia Group as one of several foreign parties involved in bribery cases with jet engine manufacturer Rolls-Royce PLC.

AirAsia Group, in an immediate response, told Malaysiakini that it had complied with procedures in its dealing with Rolls-Royce.

The bribery in the AirAsia deal was one of 12 charges brought against Rolls-Royce after a four-year investigation into its dealings with clients in Indonesia, Thailand, India, Nigeria, Russia, China and Malaysia.

Rolls-Royce, in a Deferred Prosecution Agreement with the SFO on Tuesday, agreed to a disgorgement of 258.17 million pounds (RM1.42 billion) in illegal profits and an additional 239.08 million pounds (RM1.32 bilion) in financial penalty.

The profit disgorged from Rolls Royce's deal with AirAsia amounted to 17.08 million pounds (RM94.03 million).

In his judgment over the matter, Queen's Bench Division president Brian Leveson said that Rolls-Royce employees "took steps to pressure both junior sales and internal compliance personnel to create and approve corrupt arrangements" in the Malaysia case.

According to the Statement of Facts filed with the Crown Court at Southwark, Rolls-Royce failed to prevent its employees from providing an AirAsia Group executive with credits worth US$3.2 million (RM14.2 million) for the maintenance of a private jet.

This was despite Rolls-Royce employees believing that the credits would lead the AirAsia Group executive to perform his function "improperly".

"This financial advantage was given at the request of the AirAsia group executive, in return for showing favour towards Rolls-Royce in the purchase of products and services provided by Rolls-Royce and its subsidiaries, including Total Care Agreement services to be supplied to AirAsia X, a subsidiary of AirAsia Group," it said.

The document said the credits for the private jet used by the AirAsia group executive was solicited through an AirAsia X senior employee in 2011.

It also alleged that there was an attempt to conceal the fact that the credits, given to AirAsia X in 2013, would be used for the the private jet, which was unrelated to the AirAsia Group.

The document did not name who the AirAsia Group executive was.

AirAsia denies deal was concealed

AirAsia Group head of communications Audrey Progastama Petriny, in a statement to Malaysiakini, said AirAsia and AirAsia X board of directors and management were kept informed at all times of the transactions relating to the jet.

"The upkeep for which was also clearly spelt out in the annual reports for both companies and AirAsia X initial public offering prospectus," she said.

Petriny said the credits were obtained according to procedure and used to offset the operational costs of the corporate jet which was used by senior AirAsia X executives for business travel.

"The cost of maintaining and operating the aircraft has been fully borne by AirAsia and AirAsia X.

"AirAsia Berhad has acquired the aircraft in 2016 as announced on the Malaysian bourse," she said.

In June last year, AirAsia Berhad reportedly purchased a Bombardier BD-700-1A10 Global Express which had been used by AirAsia Berhad executive chairperson Kamarudin Meranun and group chief executive officer Tony Fernandes since 2012.

The private jet (photo) was purchased from Caterhamjet Global Ltd (CJG), a company in which Kamaruddin and Fernandes held a 18.56 percent indirect stake and is also a member of the Tune group.

According to the details of the case, an AirAsia X senior employee had approached a Rolls-Royce employee in August 2011 about the maintenance of a new private jet which the AirAsia Group executive was planning to purchase.

In November 2011, a Rolls Royce senior employee who met with the AirAsia Group executive reported that the latter was "very offended" due to the high Corporate Care rate that was offered for his new Global jet...

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