AirAsia’s Fernandes, airline’s chairman, caught up in Airbus corruption investigation

CEO and chairman step down temporarily and deny all allegations as probes continue in Malaysia, Britain and India.

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AirAsia’s CEO Tony Fernandes and the airline’s chairman, Kamarudin Meranun, have stepped aside from their positions in the wake of allegations they participated in corrupt deals that involved Airbus and that the airline was paid a bribe of US$50 million to order planes from Airbus.

Airbus has already agreed to pay nearly US$4 billion in penalties in the US, France and the UK over the bribery and corruption probe, with some analysts saying the Airbus agreement with prosecutors in those jurisdictions is the end of Act One of the corruption scandal and Act Two is now starting in which airlines that were part of the scheme will see their ties to Airbus tested.

Airbus CEO Guillaume Faury (F,L) and AirAsia Group Executive Chairman Kamarudin Meranun (F,R) exchange documents after signing Aircraft Purchase Agreement in Kuala Lumpur on 30 August 2019. CEO Tony Fernandes is second from left. (PHOTO: Shutterstock)

Fernandes and Meranun, through AirAsia, issued a statement Monday (3 February), in which the two said “we categorically deny any and all allegations of wrongdoing or misconduct on our part as directors of AirAsia. We would not harm the very companies that we spent our entire lives building up to their present global status. So as to facilitate a full and independent investigation by AirAsia, 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.”

This is not the only legal jeopardy in which Fernandes is ensnared. Regulators in India have demanded he appear for the country’s Directorate of Enforcement to answer charges that the airline tried to strong-arm the government and the directorate has filed money laundering charges against AirAsia officials. The charges were originally filed in May 2018 and said AirAsia officials tried to manipulate government policies through corrupt means to get an international licence for its Indian venture, AirAsia India.

AirAsia is also under investigation in Malaysia for possible securities fraud and British authorities are looking into a 2012 sponsorship agreement between the now-defunct Caterham Formula 1 racing team, founded by Fernandes, and Airbus’s then-parent, EADS.

Britain’s Serious Fraud Office (SFO) alleged that between October 2013 and January 2015, EADS paid US$50 million to sponsor a sports team that was jointly owned by two people described as AirAsia Executive 1 and Executive 2. It said Airbus employees offered an additional US$55 million, though no payment was made. Fernandes bought Caterham together with Kamarudin in 2011. The SFO said Executives 1 and 2 were “key decision makers in AirAsia and AirAsia X, and were rewarded in respect of the order of 180 aircraft from Airbus”, according to a Reuters report.

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