AirAsia India denies wrongdoing in India case
Published:  May 30, 2018 1:55 AM
Updated: 6:18 AM

UPDATED 2.15PM | AirAsia India has laid blame on a former chief executive officer for the investigation of the company by the Indian federal police over irregularities in the granting of its aviation licence in the country.

This comes after it was revealed the Central Bureau of Investigation (CBI) was pursuing a case against AirAsia Group Bhd CEO Tony Fernandes on the matter.

In a statement, Air Asia India Ltd (AAIL) director Shuva Mandal denied the police complaint in the case, in which several parties involved in a joint venture with Fernandes are alleged to have attempted to influence or circumvent the country's aviation policy pertaining to international carriers operating domestically.

Instead, Mandal reportedly stated that a former CEO, who was not named, was responsible and AAIL had initiated criminal proceedings against the latter two years ago.

"AirAsia India Ltd (AAIL) refutes any wrongdoing and is cooperating with all regulators and agencies to present the correct facts.

"In November 2016, AAIL 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, ” Mandal said.

AAIL added that it was cooperating with the investigators.

It was reported that the police had searched AAIL's offices in Delhi and Mumbai.

In Kuala Lumpur, Reuters reported that shares of AirAsia Group Bhd fell as much as 4.2 percent early today after India federal police filed a case against the airline and Fernandes.

Malaysia's wider market was down 1.9 percent.

Indian police announced yesterday that they have filed a case against the airline, Fernandes and its domestic entity AirAsia India, over allegations of corruption and breaking rules in obtaining a flying licence.

Joint venture deal with Tata

The low-budget airline had, in 2014, launched domestic flight operations in India in a joint venture with conglomerate Tata Sons Ltd, forming AirAsia India, which is based in Bangalore.

Aside from the alleged violation of India’s aviation policy, Reuters reported that the CBI was also investigating if the airline and third parties allegedly bribed government officials so as to allow AirAsia India to fly international routes.

"In its complaint, the CBI said the airline, Fernandes and others 'chose to beat the legal frameworks and policies of the aviation sector of India' and lobbied government officials 'to secure mandatory approvals, some of them through non-transparent means'," the Reuters report said.

The policy in question pertains to a pre-2017 ruling, at the time the JV was inked, which stipulates that companies such as AirAsia India would be granted international licences provided that they operated domestically first for five years and maintained a fleet of 20 aircraft.

However, in 2016, this rule was relaxed to allow airlines to fly internationally, as long as they maintained either 20 aircraft or 20 percent capacity on local routes.

Fernandes has yet to respond to Malaysiakini's request for comment.

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