AirAsia CEO and chairman to step aside

Airline, authorities investigating allegations Airbus paid $68m bribe to win orders from carrier

KUALA LUMPUR • AirAsia Group CEO Tony Fernandes and chairman Kamarudin Meranun will step aside for at least two months while the airline and the authorities investigate allegations that Airbus paid a bribe of US$50 million (S$68.4 million) to win plane orders from the company.

A committee comprising the non-executive members of AirAsia's board will review the allegations and take any necessary action, Asia's biggest budget airline said yesterday.

Mr Fernandes, one of the aviation industry's best-known executives, and Mr Kamarudin will remain advisers, however, "in view of the current difficult economic circumstances facing the airline industry", the company added.

Senior company executive Tharumalingam Kanagalingam will be the acting CEO, with the changes effective immediately.

In a joint statement, Mr Fernandes and Mr Kamarudin denied any allegations of wrongdoing or misconduct as directors of AirAsia.

"We would not harm the very companies that we spent our entire lives building up to their present global status," they said.

Shares of Malaysia's AirAsia Group and unit AirAsia X fell yesterday, after the allegations by Britain's Serious Fraud Office (SFO) came to light last Friday.

AirAsia shares fell as much as 11 per cent to RM1.27 - their lowest since May 2016 - while those of AirAsia X tanked 12 per cent to their all-time low of 11.5 Malaysian sen.

Malaysia's anti-graft agency is also investigating the allegations.

AirAsia has said it never made any purchase decisions that were premised on Airbus sponsorship, and that it would fully cooperate with the Malaysian Anti-Corruption Commission. Malaysia's Securities Commission said on Sunday it would also examine whether AirAsia broke securities laws.

The allegations were revealed as part of a record US$4 billion settlement Airbus agreed with France, Britain and the United States.


Shares of AirAsia Group and unit AirAsia X fell yesterday, after the allegations by Britain's Serious Fraud Office came to light last Friday. AirAsia shares fell as much as 11 per cent to RM1.27 - their lowest since May 2016. PHOTO: BLOOMBERG

Prosecutors said the company had bribed public officials and hidden payments as part of a pattern of worldwide corruption.

"This agreement and the contents were arrived at without any reference to us; neither were any explanations sought from us," Mr Fernandes and Mr Kamarudin said in their statement. "This is in clear violation of fundamental legal principles of fairness."

Airbus said at the weekend it would not comment on the Malaysian investigations.

REUTERS

A version of this article appeared in the print edition of The Straits Times on February 04, 2020, with the headline 'AirAsia CEO and chairman to step aside'. Print Edition | Subscribe