AirAsia: Tata Trusts’ Venkat denies charges

AirAsia India director R. Venkataramanan, a Tata Group veteran, has denied all allegations a day after the Central Bureau of Investigation (CBI) registered a case against the low-cost airline’s global CEO Tony Fernandes and the company’s India executives for alleged corruption and wrongfully obtaining its flying licence in India.

Venkataramanan—who is also the managing trustee of Tata Trusts, the majority shareholder in Tata Sons—said the accusations made by the CBI has its roots in the "baseless allegations made by Mr. Cyrus P Mistry and the Shapoor Pallonji Group against Tata Trusts Trustees (me included) and Tata Sons in his revenge legal actions". AirAsia India is a joint venture between Malaysia-based AirAsia and Tata Sons, and started operations in India in 2014. Former Tata Sons chairman Mistry is in a legal battle with the Tata Sons following his sudden exit in 2016.

"In my capacity as non-executive director of Air Asia India Limited, I have been wrongly named as an accused by the CBI on operational matters where I had little or no role to play," Venkataramanan said in a statement on Wednesday. "Emails purportedly written by me have been circulated in the media in the context of the issue of 5/20 in the aviation sector. This has been a much-debated policy matter and Air Asia India was one of the many airlines that had formally sought a review of this policy," he added.

The 5/20 rule was a norm of India’s aviation ministry that stipulated a minimum five years of operational experience, and a fleet of at least 20 aircraft, before a domestic carrier can obtain an international flying licence in the country. It was replaced in 2016 with a new law that took away the five-year waiting time. The CBI in its FIR registered on Tuesday said that unknown officials from the Ministry of Civil Aviation and Foreign Investment Promotion Board (FIPB) entered into “criminal conspiracy” with Venkataramanan, Fernandes and others to expedite the approval process to benefit AirAsia. The FIR noted that “Venkataramanan was involved in lobbying with stakeholders in the Government of India to secure mandatory approvals, some of them through non-transparent means”. A copy of the FIR was reviewed by Fortune India.

The CBI had also accused AirAsia of breaking the law by indirectly controlling the India entity, AirAsia India. AirAsia India, on Wednesday, refuted the charge, saying the allegations were “fully investigated by the Director General of Civil Aviation (DGCA) and the DGCA has passed a detailed and reasoned 12-page order to this effect on February 8, 2017”.

In a filing to the Malaysian stock exchange, AirAsia said it “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 AAIL,” the company added.