Monday, October 26, 2020

Malaysia AirAsia CEO Tony Fernandes step aside in Airbus bribery investigation

-

AirAsia Group (AIRA.KL) CEO Tony Fernandes and Chairman Kamarudin Meranun will step aside for at least two months while the airline and authorities investigate allegations Airbus paid a bribe of $50 million (38.17 million pounds) 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 on Monday.

Fernandes, one of the aviation industry’s best known executives, and 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.

- Advertisement -

In a joint statement, Fernandes and 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 AirAsia and unit AirAsia X (AIRX.KL) fell on Monday after the allegations by Britain’s Serious Fraud Office (SFO) came to light on Friday. AirAsia stock fell as much as 11% to 1.27 ringgit, their lowest since May 2016, while AirAsia X dropped 12% to an 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 (AIR.PA) sponsorship, and that it would fully cooperate with the Malaysian Anti-Corruption Commission (MACC).

- Advertisement -

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 $4 billion settlement Airbus agreed with France, Britain and the United States. 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,” Fernandes and 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.

The SFO’s allegations concern a 2012 sponsorship agreement between the now-defunct Caterham Formula 1 racing team, founded by Fernandes, and Airbus’s then-parent, EADS.

The SFO said on Friday that between October 2013 and January 2015, EADS paid $50 million to sponsor a sports team which was jointly owned by two people described as AirAsia Executive 1 and Executive 2. It said Airbus employees offered an additional $55 million, though no payment was made.

Fernandes bought Caterham together with Kamarudin in 2011.

The SFO said Executives 1 and 2 were “key decision makers in AirAsia and AirAsia X, and were rewarded in respect of the order of 180 aircraft from Airbus”.

Analysts said the accusation against AirAsia comes at a particularly bad time as airlines grapple with a slowdown in business because of the fast-spreading coronavirus epidemic that has killed more than 300 people in China and disrupted air travel.

TA Securities downgraded AirAsia Group stock to “sell” from “buy”.

Source: Reuters

MUST READ

Julius Baer to deny two former CEOs their bonuses over money laundering scandal

Julius Baer will withhold millions of francs in bonuses from its former chief executives Boris Collardi and Bernhard Hodler, as a result of a...

Goldman Sachs executives to cover part payments of $3 billion fines in 1MDB scandal

Nine current or former Goldman Sachs executives, including CEO David Solomon, will have to pay back hundreds of millions of dollars in compensation over...

Goldman Sachs agrees $3 billion settlement with US DoJ over 1MDB corruption scandal

Goldman Sachs has agreed to pay nearly $3bn (£2.3bn) in the US to end a probe of its role in Malaysia's 1MDB corruption scandal. The...

Hong Kong fines Goldman Sachs $350 million over 1MDB scandal

Goldman Sachs ignored multiple red flags over the multibillion-dollar fundraisings it arranged for state fund 1Malaysia Development Berhad, Hong Kong’s financial regulator said on...

Texas attorney general Ken Paxton fires top aide who accused him of bribery

Lacey Mase, one of the top aides who accused Texas Attorney General Ken Paxton of crimes including bribery and abuse of office, has been fired, she told The...

Subscribe For More

Get our daily notification on the latest financial crimes news around the World

Advertisement
Advertisement

Latest News

This Week

Swiss court upholds money-laundering conviction of ex-Ukrainian lawmaker Martynenko

A Swiss court has upheld the conviction of former Ukrainian lawmaker Mykola Martynenko for laundering via Swiss banks millions of dollars worth of kickbacks...

Ex-managers of Security firm pleads guilty in Santa Clara County concealed gun permit bribery scandal

Two former managers of a Silicon Valley international security firm pleaded guilty Monday to charges related to a bribery scheme to obtain concealed firearms...

Fundraiser Elliott Broidy pleads guilty in foreign agent case linked to 1MDB

Major Republican Party and Trump fundraiser Elliott Broidy pleaded guilty Tuesday to acting as an unregistered foreign agent, admitting to accepting millions...

Former Malawi minister sentenced to six years in prison over passport corruption scandal

A court in Malawi’s capital Lilongwe on Thursday sentenced a former home minister to six years in prison after he was found guilty in...
Advertisement

Adblock Detected!

Our website is made possible by displaying online advertisements to our visitors. Please consider supporting us by whitelisting our website.

Enable Notifications    Ok No thanks