India police investigate AirAsia boss Tony Fernandes in bribes probe

Tony Fernandes, the chief of AirAsia Group Bhd, is being investigated by the Indian federal police for allegedly paying bribes to influence local policy

PUBLISHED : Wednesday, 30 May, 2018, 10:52am
UPDATED : Wednesday, 30 May, 2018, 9:52pm

Indian police said they have filed a case against AirAsia Group Bhd, the airline’s CEO Tony Fernandes and its domestic entity AirAsia India, over allegations of corruption and breaking rules in obtaining a flying licence.

The Central Bureau of Investigation (CBI) accused the airline, some of its employees and third parties of violating India’s foreign direct investment rules while obtaining the licence, and of bribing government officials in an attempt to get regulations relaxed to allow AirAsia India to fly international routes.

AirAsia India said in a statement it refuted any allegations of wrongdoing and was cooperating with all regulators and agencies “to present the correct facts”.

On Twitter, Fernandes did not directly address the accusations but complained about media who reported without fact-checking.

The police investigation is a blow for the budget airline, which has been planning to add new jets to its Indian fleet as it seeks to expand in one of the world’s fastest-growing aviation markets.

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 Malaysian low-cost carrier in 2014 launched domestic flight operations in India along with local joint venture partner Tata Sons.

At the time, India’s aviation rules required AirAsia India to operate in the domestic market for a period of five years and have a fleet of 20 aircraft before it was allowed to fly international routes.

India in 2017 relaxed the rules by abolishing the five-year clause.

According to the complaint, Fernandes wanted the airline’s Indian operation to be able to fly internationally from day one.

The CBI has alleged that bribes were paid to government officials “for securing permit for operation of international scheduled air transport services”.

The complaint listed five other individuals and a Singapore-based company, along with unidentified government officials.

A CBI spokesman said it was conducting searches at AirAsia’s offices, including in Delhi and Mumbai, without elaborating.

Fernandes has had a difficult few weeks. He has apologised for supporting former Malaysian Prime Minister Najib Razak, whose long-ruling coalition was ousted in May 9 elections.

Fernandes said he bowed to government pressure and believed his endorsement would help protect jobs.

Additional reporting by Bloomberg and Associated Press