NEW DELHI: One of India’s newest carriers — AirAsia India, which is a joint venture between Tata Sons and Malaysia’s AirAsia — is likely to face turbulence in the near future. The Enforcement Directorate (ED) has summoned AsiaAsia India’s chief executive officer Tony Fernandes and some others from the top management (past and present) for questioning in connection with a money laundering case.
The ED officials said Fernandes has been summoned on January 20, while a few others have been asked to depose in the following days. The name includes AirAsia Group president Tharumalingam Kanagalingam, who is also known as Bo Lingam; businessman Arun Bhatia, who held substantial equity in the airline; senior group executive S Ramadorai, as well as former CEOs Naresh Algan and Mittu Chandiliya.
The agency had registered a case against the airline and its officials under the Prevention of Money Laundering Act (PMLA) in 2018, as there were allegations that AirAsia tried to manipulate government policies, primarily the 5/20 rule, through corrupt means to get international licence for its Indian venture.
The 5/20 rule stipulates that a national carrier should have five years of operational experience and a fleet of minimum 20 aircraft to be eligible to fly overseas.
At the time the case was registered, AirAsia had only 18 aircraft. The rule was replaced with 0/20 rule by the Cabinet in June 2016. According to a CBI FIR, Fernandes wanted AirAsia India to fly internationally from the day it was granted a flying permit, in May 2014.
The ED is also probing this case under the Foreign Exchange Management Act (FEMA). Investigation in the case was initiated after the ousted Tata Group chairman Cyrus Mistry alleged that the firm carried out fraudulent transactions worth Rs 22 crore, involving non-existent entities in India and Singapore.
Corrupt complaint
The ED case says AirAsia Ltd tried to manipulate government policies, primarily the 5/20 rule, through corrupt means to get an international licence for its Indian venture.