Tony Fernandes, the Malaysian Indian CEO of AirAsia group, who is facing corruption charges in India, has stepped aside from the company. Fernandes is facing corruption charges in many countries including India and Britain. The decision to step aside from the post of CEO came after Britain’s Serious Fraud Office (SFO) released the details of probe in the Airbus bribery case, in which the French company has agreed on 4 billion dollars settlement.
“We are relinquishing our executive roles with immediate effect for a period of two months, or such other period that the companies may deem fit,” Fernandes and executive chairman Kamarudin Meranun said in a statement.
Fernandes, Malaysia’s own Vijay Mallya in terms of flamboyance is facing corruption charges in India, Malaysian, and United Kingdom. He and AirAsia’s executive chairman Kamarudin Meranun were paid handsomely and their sports team was awarded 50 million dollars sponsorship by Airbus in return of 180 aircrafts order by AirAsia.
The shares of AirAsia plummeted by 10 percent on the “double whammy” of Coronavirus and resignation of the CEO on backdrop of corruption charges.
ED probes AirAsia for criminal misconduct, summons Tony Fernandes https://t.co/leiJmpUczS
— Subramanian Swamy (@Swamy39) January 17, 2020
Enforcement Directorate, the Indian investigation agency for financial crimes, has already launched a case for criminal misconduct against AirAsia and summoned Tony Fernandes. The investigation agency has summoned whole former and current top brass of AirAsia under Prevention of Money Laundering Act (PMLA). ED has found the irregularities of funds as well as criminal misconduct by AirAsia management when it was lobbying for license to start services in India.
The case is also being investigated by CBI is a separate probe. CBI filed FIR in May 2018 for the violation occurred between 2013 and 2016, ahead of government eased the curbs on local airlines starting overseas flights in 2016. Majority stake in AirAsia India is owned by Tata Sons (51 percent) and the rest is owned by AirAsia; the company operates 175 daily flights across 20 destinations over the countries around the world.
In 2016, Subramanian Swamy- one of India’s foremost crusaders against corruption- approached Delhi High Court, seeking suspension of license to AirAsia, and the court directed inquiry against the company to aviation regulator in November 2016. Swamy was joined in court by Federation of Indian Airlines comprising IndiGo, Jet Airways, GoAir and SpiceJet.
“It is further revealed that the shareholders and Indian partners at the joint venture, including the board members, were not only aware of these intentions but also consciously ensured violating the then FIPB (foreign investment promotion board) norms; hence violation of FDI norms were prima-facie found by giving effective management control to a foreign entity,” reads the FIR filed by ED in May 2018.
Subramanian Swamy has repeatedly written to PM Modi as well as to former Prime Minister Manmohan Singh, seeking probe against two airlines units of Tata Group- AirAsia India and Vistara.
Cyrus Mistry, the former chairman of Tata Group, has also flagged the violation of FDI norms and bribery payment to the government officials to the joint venture.
The decision by Tony to step aside from the post of CEO of AirAsia adds another feather in Swamy’s hat; Swamy has been relentlessly pursuing case against AirAsia, Tony Fernandes, and other corrupt officials from the government as well as private players. As Fernandes has stepped aside from the CEO post, the Indian government might ask for the extradition of Fernandes to face the criminal offence charges by ED.