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CBI alleges scam in AirAsia clearance during UPA government

CBI alleges scam in AirAsia clearance during UPA government

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AirAsia Group CEO Tony Fernandes. (Photo: IANS)
New Delhi, May 29 (IANS) Targeting yet another alleged wrongdoing during the UPA regime, the CBI has named AirAsia Group CEO Tony Fernandes and others in a criminal case of violating FDI norms in giving effective management to a foreign entity through FIPB clearance in 2013 and attempt to bribe for tweaking rules to get licence for its joint venture to operate international flights.
The CBI FIR also names "unknown public servants" of the Civil Aviation Ministry, the then Foreign Investment Promotion Board, R. Venkataramanan, Director AirAsia, the the AirAsia Group Deputy CEO T. Kanagalingam alias Bo Lingam.
The FIR also alleges that in December 2014, Sunil Kapoor, who runs an in-flight catering company, along with Bo Lingam handed over a packet containing Rs 50 lakhs to facilitate the removal of the rule that required five years domestic flying experience and 20 aircraft to get licence to fly internationally.
The CBI said it had received information that AirAsia India was indirectly controlled and operated by AirAsia Group and particularly AirAsia Berhad, violating the norms of the then FIPB.
This structure was directly formalised through a "Brand Licence Agreement" signed by AirAsia represented by Fernandes and AirAsia Berhad represented by Bo Lingam on April 17, 2013 which indirectly made AirAsia India a de facto subsidiary rather than a joint venture.
As per the then FDI policy, foreign airlines were allowed to own up to 49 per cent of shares in domestic airlines but effective management control must remain with the Indian partner.
"It is further revealed that the shareholders and Indian partners of the joint venture, including the board members, were not only aware of these intentions but also consciously ensured violating the then FIPB norms. Hence, violation of FDI norms were prima facie found by giving effective management to a foreign entity.
The FIR alleges that Fernandes wanted the airline venture to be able to fly internationally from Day One and their local Indian partner Tata Sons Ltd through their nominee Venkataramanan would lobby to get all government approvals including the then FIPB clearance and amendment/removal the existing 5/20 rules of international civil aviation.
It also names several others as playing a liasion role and that a secret cabinet note was sent in February 2014 to the cabinet to amend/remove 5/20 rule. The proposal, however, could not be approved since elections were already announced.
In its reaction, AirAsia said it refutes any wrongdoing and was cooperating with all regulators and agencies to present "correct facts".
In November 2016, A.A. Aiyar had initiated criminal charges against its ex CEO and also commenced civil proceedings in Bengaluru for such irregularities.
"We hope to bring early resolution to all such issues," an AirAsia spokesperson said.
--IANS
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(This story was auto-published from a syndicated feed. No part of the story has been edited by The Quint.)

(This story was auto-published from a syndicated feed. No part of the story has been edited by The Quint.)

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