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Venkataramanan appears before ED in AirAsia probe

Enforcement Directorate is probing an allegation of money laundering against AirAsia Bhd for which India’s former director R Venkataramanan was called for probe. AirAsia BHd's Former CEO Tony Fernandes, Venkataramanan and others are also being investigated by the CBI on charges of criminal conspiracy under the Prevention of Corruption Act.

, ET Bureau|
Last Updated: Feb 11, 2020, 06.56 AM IST
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New Delhi: AirAsia India’s former director R Venkataramanan on Monday appeared before the Enforcement Directorate that is probing an allegation of money laundering against the airline’s part owner, Malaysia-based AirAsia Bhd, people with direct knowledge of the matter said.

Venkataramanan was the Tata Sons nominee on the board of AirAsia India, a joint venture between the Indian conglomerate and AirAsia Bhd. He stepped down as the managing trustee of the Tata Trusts in March last year and later exited AirAsia India.

Meanwhile, AirAsia Bhd’s former CEO Tony Fernandes, who was issued summons twice by the ED, hasn’t yet joined the probe. He was last asked to appear before the agency on February 5. AirAsia’s former deputy group CEO Tharumalingam Kanagalingam, who was called on February 3, also did not turn up.

AirAsia declined to comment. Fernandes could not be reached for comment despite repeated attempts.

ED sources said fresh summons would be issued to Fernandes and other top executives linked to AirAsia Bhd. Fernandes last week temporarily stepped down from his position at the Malaysian airline pending a probe into allegations that Airbus paid him and another executive a bribe of $50 million to secure aircraft orders.

Fernandes, Venkataramanan and others are also being investigated by the Central Bureau of Investigation on charges of criminal conspiracy under the Prevention of Corruption Act. The CBI registered a first information report in May 2018 after the ED filed the money-laundering case.

In a statement issued last month, a spokesperson for Tata Sons had said: “Venkataramanan was a nonexecutive nominee director of Tata Sons on the board of AirAsia India Ltd … based on due enquiry undertaken by AirAsia India Ltd, there has been no wrongdoing by R Venkataramanan.”

The CBI said in the FIR that the directors were involved in wrongdoing.

“The shareholders and Indian partners at the joint venture, including the board members, were not only aware of these intentions but also consciously violated the then FIPB (Foreign Investment Promotion Board) norms,” the FIR said.

The role of some bureaucrats has also come under the CBI’s scanner. “Source information” meetings with government servants were arranged by lobbyists hired by Fernandes and kickbacks running into crores of rupees were paid, according to the FIR. The CBI alleges that a conspiracy was hatched to get the so-called 5/20 rule amended during the second term (2009-14) of the Congress-led United Progressive Alliance government. At the time, Indian carriers could fly overseas only if they had been operating for five years and had 20 planes. The 5/20 rule was relaxed in June 2016, scrapping the five-year requirement.

AirAsia sought the FIPB’s approval for its investment in February 2013 and received it in April that year, despite irregularities in its application, the CBI has said. The FIPB ignored violation of foreign direct investment rules, as AirAsia India was indirectly controlled and operated by AirAsia, it has said. The rules stipulate that domestic carriers must be controlled locally.

The company structure was formalised on April 17, 2013, indirectly making AirAsia India a “de-facto subsidiary rather than a joint venture”, the CBI has alleged.

The company had denied the accusations in a 2018 press statement.

“AirAsia India Ltd (AAIL) refutes any wrongdoing and is cooperating with all regulators and agencies to present the correct facts,” it had said. In its FIR, the CBI has also named Rajender Dubey, the director of Singapore-based HNR Trading Pvt Ltd; Sunil Kapur, chairman, Total Food Services, Mumbai; Deepak Talwar, principal and founder, DTA Consulting, New Delhi; and HNR Trading as alleged lobbyists who used their influence to get the 5/20 rule relaxed before the general elections of 2014.

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