AirAsia group chief Tony Fernandes. (File Photo | AFP)
NEW DELHI: In its hurry to go international, low-budget airline AirAsia India lobbied hard and paid bribes, the Central Bureau of Investigation (CBI) said in its FIR.
Among those named in the FIR are senior management officials of AirAsia, including group CEO Tony Fernandes, and unnamed officers of the civil aviation ministry and the erstwhile Foreign Investment Promotion Board. R Venkataramanan, director AirAsia (lndia), and Tharumalingam Kanagalingam, deputy group CEO of AirAsia Berhad, Malaysia have also been named in the FIR.
The main charges against the company are that it tried to influence government officials to remove a clause in the aviation policy, the 5/20 rule, which says a carrier should have five years experience in running domestic operations and a fleet size of 20 aircraft for it to apply for permit to fly international.
AirAsia India, founded in 2013, allegedly spent 13 crore to lobby with government officials for a favourable decision. Reports say a Cabinet note was floated in February 2014 to amend the 5/20 rule but it did not move forward as the model code of conduct for the Lok Sabha elections kicked in. The five-year requirement was removed in 2016 by the NDA government.
The CBI also charged the airline with flouting FDI norms by making AirAsia India a de facto subsidiary indirectly rather than a JV. “This structure was indirectly formalised through a ‘Brand License Agreement’ signed between AirAsia (lndia) (represented by Tony Fernandes) and AirAsia, Berhad (represented by Tharumalingam Kanagalingam) in 2013. As per the then FDI policy, foreign airlines can own up to 49 per cent shares in domestic airlines but management control must remain with the Indian partner,” CBI said in its FIR. AirAsia refuted the charges in the FIR.
Charges against AirAsia
Lobbied with govt officials to change aviation policy to dilute the 5/20 rule
Bribed public servants to secure permits for international operations
Flouted FIPB and FDI norms by ceding management control to a foreign entity, and making AirAsia India a de facto subsidiary indirectly rather than a joint venture
Those named in the FIR
AirAsia Group CEO Tony Fernandes; Travel Food Services chairman Sunil Kapur; AirAsia Director R Venkataraman; aviation consultant Deepak Talwar; director of Singapore-based SNR Trading Rajendra Dubey; and unidentified public servants including former officials of Civil Aviation Ministry, erstwhile FIPB
What is 5/20 rule
An airline company should have at least five years experience and 20 aircraft before it can start international operations from India