Malaysia securities regulator to probe if AirAsia broke rules in Airbus deals

KUALA LUMPUR • Malaysia's securities regulator said yesterday it will examine whether AirAsia Group and its unit AirAsia X broke securities laws, after UK prosecutors accused executives of receiving bribes from Airbus for buying planes.

The allegations came to light last Friday when Airbus agreed to a record US$4 billion (S$5.5 billion) settlement with France, Britain and the United States. Prosecutors said it had bribed public officials and hidden payments as part of a pattern of worldwide corruption. The company admitted guilt to crimes that spanned 13 years and involved countries from Russia to China.

Britain's Serious Fraud Office (SFO) said last Friday that between October 2013 and January 2015, Airbus's then-parent EADS paid US$50 million to sponsor a sports team that was jointly owned by two people described as AirAsia Executive 1 and Executive 2.

The SFO said the executives were rewarded for an aircraft order from Airbus, an allegation AirAsia denied late on Saturday.

"The Securities Commission Malaysia will examine the allegations and review all available evidence to determine if there is any breach of securities laws," Datuk Syed Zaid Albar, the regulator's chairman, said in a statement.

Directors who act with the intent to cause wrongful loss to their listed firms can face jail or fines, he said.

Malaysia's anti-graft agency has already launched a separate investigation into the allegations.

The Malaysian Anti-Corruption Commission is in touch with the United Kingdom authorities on the matter, Chief Commissioner Latheefa Koya said in a statement on Saturday.

AirAsia said in its Saturday statement that it had not been involved with the SFO's investigation of Airbus nor given opportunity to provide clarification. It said it "vigorously rejects" all allegations of wrongdoing.

"AirAsia executives negotiated rigorously in the interests of the company and had at all times acted in good faith," it said, adding that the company and its executives will cooperate with the Malaysian anti-graft agency and the authorities.

Reached for comment by Reuters yesterday, the company pointed to the statement that said it would fully cooperate with "relevant authorities where required". Airbus said it had no comment.

AirAsia, Asia's largest budget airline group, runs an all-Airbus fleet of 274 planes.

The Malaysian probe adds to the troubles of AirAsia founder Tony Fernandes, who has been summoned by India's court to face allegations that he paid bribes to influence local policy. The company has previously denied wrongdoing.

REUTERS, BLOOMBERG