The CBI case against Air Asia’s Tony Fernandes explained
The CBI booked Group CEO of Air Asia Tony Fernandes for allegedly trying to manipulate government policies through corrupt means to get an international licence for its Indian venture Air Asia India Limited, officials said.
Along with Fernandes, Tharumalingam Kanagalingam also known as Bo Lingam, former Deputy Group CEO of Malaysia-based Air Asia Berhad, and R Venkataramanan, Director Air Asia India Ltd, Bengaluru besides companies Air Asia India Pvt Ltd and Air Asia Berhad have also been named as accused in the case.
'The case has been registered under 120-B (criminal conspiracy) under the IPC and sections 13(2) read with 13 (1) (d) of the Prevention of Corruption Act. The searches took place at five locations in Delhi NCR, Mumbai and Bengaluru,' CBI spokesperson RK Gaur said today.
The agency has alleged that Venkataramanan was lobbying in the government to secure mandatory approvals, some of them through 'non-transparent means', including the then Foreign Investment Promotion Board (FIPB) clearance, No Objection Certificate and the attempt for removal or modification of 5/20 rule.
It is alleged that to be eligible for international operations, the company was required to have five years of experience and fleet of 20 aircraft as per 5/20 rule.
The company is yet to get international flying permit as it currently has only 18 aircraft, they said.
Fernandes wanted it to fly internationally from the day of getting flying permit granted in May, 2014, it alleged.
He and his local Indian partner Tata Sons through their nominee Venkatramanan would lobby in government to get all approvals including FIPB clearance and amend or removal of existing 5/20 rule for international operations, the FIR has alleged.
The agency has also named Rajender Dubey, Director of Singapore-based HNR Trading pte Ltd, Sunil Kapur, Chairman Total Food Services, Mumbai and Deepak Talwar, Principal and Founder DTA consulting, New Delhi and the company HNR Trading as alleged lobbyists who used their influence to get 5/20 rule relaxed 'before General Elections of 2014'.
It is alleged that Dubey was instrumental in seeking appointments and facilitating meetings for officials of AAIL with officials in the ministry for getting clearances.
The agency has alleged that Kapur in the month of December, 2014 at the coffee shop in the Four Season, Mumbai Hotel along with Bo Lingam handed over a closed packet containing cash of Rs 50 lakhs to one Sriram, which was given by Bo Lingam to facilitate the removal of the 5/20 rule.
In return the catering contract for the airlines was given to Kapur as a 'quid pro quo', it has alleged.
The FIR has alleged that a secret note was sent on February 27, 2014 to Cabinet to amend rule followed by a supplementary note on March 05, 2014 which was not approved since Election Commission had announced Lok Sabha general elections on March 5, 2014.
It is alleged that next year Air Asia (lndia) Limited remitted about Rs 12.28 crore to HNR Trading Pte. Ltd. Of Dubey for a ?sham contract? on the basis of a bogus agreement on plain papers.
This money was allegedly utilised for paying bribe to unknown public servants of and others for securing permit for international operations through Talwar and Kapur who acted lobbying agents, the FIR said.
'Air Asia India Limited refutes any wrong doing and is co-operating with all regulators and agencies to present the correct facts. In November, 2016 AAIL had initiated criminal charges against its ex-CEO and had also commenced civil proceedings for such irregularities. We hope to bring early resolution to all such issues,' Shuva Mandal, Director, Air Asia India Limited said in a statement.
According to the foreign direct investment policy between 2013-14, foreign airlines were allowed to own only 49 per cent shares in domestic airlines but effective management control must remain with the Indian partner, the agency said.
It is alleged that Air Asia India Ltd--a joint venture between Tata sons and Malaysian company Air Asia Berhad--was indirectly controlled and operated by the Malaysia group and particularly Air Asia, Berhad violating existing various norms of erstwhile Foreign Investment Promotion Board, now defunct.
Fernandes and Bo Lingam had "indirectly formalised" the structure through a "Brand License Agreement" between Air Asia (lndia) Ltd. (represented by Fernandes) and Air Asia, Berhad (represented by BO Lingam) on April 17, 2013 which indirectly made Air Asia (lndia) Ltd. A de-facto subsidiary rather than a joint venture.
'lt is further revealed that the shareholders and Indian partners in the joint venture, including the board members, were not only aware of these intentions but also consciously ensured violation of existing FIPB norms, hence violation of FDI norms were prima-facie found by giving effective management control to a foreign entity,' the agency FIR said.