AirAsia Group Bhd (AAGB) chief executive officer Tan Sri Tony Fernandes and executive chairman Datuk Kamarudin Meranun have relinquished their executive positions with immediate effect for two months following allegations that the airline received a US$50 million bribe from aircraft manufacturer Airbus.
Bernama, Malaysia’s national news agency, reported the company informed Bursa Malaysia (Malaysia Stock Exchange) that a non-executive independent board committee formed by AAGB’s board of directors has decided to retain Fernandes and Kamarudin as advisors to the company during the two-month period.
The committee comprises the non-executive members of the board.
The company has appointed Tharumalingam Kanagalingam as the acting CEO of AAGB in the interim on the recommendation of the committee.
Fernandes and Kamarudin are redesignated as non-independent non-executive board members of AAGB.
In a joint statement issued this morning (4 February), both Fernandes and Kamarudin “categorically deny all allegations of wrongdoing or misconduct on our part as executives and directors of AirAsia.”
It explained that Caterham F1, the company alleged to have been sponsored improperly by Airbus, was at the relevant time a Formula 1 racing team that had gone round the globe promoting, among others, AirAsia, AirAsia X, GE and Airbus.
It added that throughout the period Fernandes and Kamarudin were shareholders in Caterham, the company made no profits and was eventually disposed for £1 in 2014 – reiterating this was “a branding exercise and not a venture to make profits.”
On 31 January 2020, Airbus SE and the the U.K. Serious Fraud Office (SFO) entered into a Deferred Prosecution Agreement. In return for a suspension of prosecution by the SFO, Airbus has agreed to pay a significant fine and costs to the SFO and also agreed to a statement of facts that appears to implicate executives of AirAsia.
The two AirAsia’s top executives have claimed the SFO, during the four-year investigation regarding the Airbus scandal, did not once reach out to them or AirAsia (as stated in their press release of 1 February 2020), for any explanation or clarification.
This was a clear violation of the fundamental legal principle of fairness and access to justice, they asserted.
“So as to facilitate a full and independent inquiry by AirAsia we are relinquishing our executive roles with immediate effect for an initial period of two months, which may be extended at the discretion of the AirAsia Board as they deem fit based on the prevailing circumstances then.
“At the request of the Board of AirAsia we have agreed to continue to assist AirAsia in an advisory capacity as and when required,” they added.
Fernandes and Kamarudin also said they “welcome any investigation by the authorities as that is the only way we will receive the fairness and access to justice denied us by the SFO process to date. We will extend our fullest cooperation to them.”
The Securities Commission Malaysia (SC) had said that it would examine the statement of facts in the case of Regina vs Airbus SE, which disclosed several allegations against both companies.
The Malaysian Anti Corruption Commission (MACC) has also initiated an investigation into allegations against both companies by contacting authorities in the United Kingdom.
Meanwhile, the Malaysian Aviation Commission (Mavcom) said in a statement it would assess whether the two executives of AirAsia Group and AirAsia X have breached its regulations.
The two airlines, which are holders of air service licences issued by the commission, are subject to the Malaysian Aviation Commission Act 2015 and the commission’s guidelines.
“The allegations touch on the jurisdictions of multiple agencies in Malaysia and, therefore, the commission will cooperate and work with all relevant authorities on this matter,” it added.
To recap, in the earlier statement from AirAsia issued on 1 February the carrier denied the bribery allegations. Part of it reads: “The entering into of each aircraft purchase agreement was never made by any single individual decision, but instead arrived at through careful evaluation, deliberation and the collective decision of the board members after taking into account technical specifications, aircraft flight performance and operating economics.
“The superiority and reliability of the aircraft and increasingly attractive pricing being offered to maintain our competitive edge in the airline business were key considerations. As a customer of Airbus since 2005, AirAsia never made purchase decisions that were premised on an Airbus sponsorship”.
It was referring to the article, AirAsia directors/staff got RM240mil bribe from Airbus, court docs say, on the focusmalaysia.my website and other articles in the press regarding the Airbus SE-SFO “Deferred Prosecution Agreement”. (Read the full statement here).
• Featured image credit (AirAsia’s Airbus A320 Neo aircraft): AirAsia