AirAsia calls CBI allegations in FIR “baseless”

Low-cost Malaysian airline AirAsia Group Berhad has denied the allegations that it flouted rules in procuring an international flying licence in India and starting operations. The group has called the allegations in the first information report prepared by the Central Bureau of Investigation (CBI) “baseless, unsupported and unjustified”.

“We question the motives of the unnamed person, persons or organisation that lodged this FIR but we will co-operate fully with the Indian authorities in accordance with due process provided in law,” the company said in a statement.

The CBI in its FIR has accused group CEO Tony Fernandes and deputy CEO Bo Lingam of allegedly flouting aviation norms for getting international flying licences as well as starting operations in India.

The company said that the allegations have been nullified by the aviation regulator Directorate General of Civil Aviation (DGCA) in its report last year. This has been refuted by no less than the Director General of India’s Directorate General of Civil Aviation who extensively reviewed the Brand Licensing Agreement (BLA) and in a report dated 8 February 2017 filed in the High Court of Delhi stated that he did not find that the terms and conditions laid down in BLA “dilute the substantial ownership and effective control of AirAsia India being vested with Indian nationals”.

While admitting that it did lobby for removal of aviation rule 5/20, the company added it did not resort to any impropriety in obtaining the approvals. “All required approvals were obtained through normal channels and it took more than a year to get these approvals. AirAsia India, as with others in the aviation industry, lobbied the Government of India to remove the 5/20 rule that inhibits competition and the development of a healthy aviation sector that ensures the benefit of the Indian consumer but this was done in compliance with the law and certainly without any unlawful payments,” it said. The 5/20 norm mandated that an airline have at least five years of domestic experience and 20 aircraft to get an international licence. In 2016, the government removed the five-year clause.

The company has also clarified that except its business with Singapore-based trading company HNR Trading Pte Ltd, the airline’s other agreements named in the FIR were “entered in the ordinary course of business for services rendered on normal commercial terms”. The airline also noted that it has filed a case against former CEO of AirAsia India, Mittu Chandiliya in 2017, which was being investigated by the Bengaluru police. “All contracts entered into by AirAsia India at the relevant time were under the watch of the then CEO, Mittu Chandilya. AirAsia India has lodged an FIR against Mr Mittu Chandilya in 2017 over the contract with HNR Trading Pte Ltd, which was unauthorised by the company. AirAsia India has 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. We believe that the Bengaluru police are still investigating although much time has lapsed,” it said in its statement.

Last month, the CBI had filed a case against AirAsia Group head Tony Fernandes, deputy group CEO Tharumalingam Kanagalingam, Tata Trusts head and AirAsia India director R. Venkataramanan, Travel Food Services chairman Sunil Kapur, aviation consultant Deepak Talwar, and HNR director Rajendra Dubey for allegedly flouting aviation norms to get clearances in India in 2013.