MALAYSIA: AirAsia Once More Denies India Corruption Allegations

The AirAsia Group has again refuted any wrongdoing in its dealings with the Indian government over its AirAsia India unit, following allegations of corruption filed in a first information report (FIR) with the Indian police.

In a statement on Bursa Malaysia, AirAsia says it has conducted an internal review and found that there had been no wrongdoing by group chief executive Tony Fernandes and deputy group chief executive Bo Lingam - the two parties at the centre of the allegations.

The statement follows widespread media coverage concerning the alleged police report, based on information from an unnamed reliable source.

The Board of Directors of AirAsia Group refutes strongly all the allegations made in the FIR as baseless, unsupported and unjustified and will vigorously challenge these allegations.

Among the allegations in the report includes claims that AirAsia India was indirectly controlled and operated by Malaysia AirAsia via a brand licensing agreement, violating India's Foreign Investment Promotion Board norms which requires substantial ownership and effective control by Indian nationals.

AirAsia has since refuted this, backed by a report from the Indian Director General of Civil Aviation that the terms and conditions did not dilute substantial ownership and effective control by Indian nationals.

Another allegation says Fernandes and Lingam, along with four named parties and unknown public servants tried to expedite the approval process and change the former 5/20 rule through non transparent means.

The then 5/20 rule required domestic carriers to have five years of operational experience and at least 20 aircraft before they could operate international routes.

All required approvals were obtained through normal channels and it took more than a year to get these approvals, we refute any inference of impropriety in obtaining 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 for the benefit of the Indian consumer.

But this was done in compliance with the law and certainly without any unlawful payments.

On 30 May, India's Central Bureau of Investigation had launched investigations into AirAsia India, related to accusations of bribery and violation of the country's aviation laws.


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