ED May Issue Fresh Summons To AirAsia’s Tony Fernandes

The Enforcement Directorate (ED) is likely to issue a fresh summons to AirAsia Bhd’s former CEO Tony Fernandes and other top executives of linked to the airline.

Incidentally, Fernandes, who was issued summons twice by the ED, is yet to join the ED probe. AirAsia’s former deputy group CEO Tharumalingam Kanagalingam, who was also summoned by the ED on February 3, has not turned up yet.

However, AirAsia India’s former director R Venkataramanan appeared before the ED recently in connection with an investigation into allegations of money laundering against the airline’s Malaysia-based part owner AirAsia Bhd.

It may be recalled that Venkataramanan was the nominee of Tata Sons on the board of AirAsia India, a joint venture between the Tatas and AirAsia Bhd. He had stepped down as managing trustee of the Tata Trusts in March 2019, and later exited AirAsia India.

Incidentally, Fernandes, Venkataramanan and others are also being investigated by the Central Bureau of Investigation (CBI) on charges of criminal conspiracy under the Prevention of Corruption Act.

The CBI had registered a first information report in May 2018 after the ED filed its money-laundering case and alleged in its First Information Report (FIR) that the directors of AirAsia 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 Foreign Investment Promotion Board (FIPB) norms,” the CBI FIR stated.

AirAsia had 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 stated.

The FIPB ignored violation of foreign direct investment rules, as AirAsia India was indirectly controlled and operated by AirAsia, the CBI has stated. FIPB norms stipulate that domestic carriers must be controlled locally.

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