Tuesday, June 19, 2018

Ex-CEO Mittu Chandilya challenges AirAsia brand-licensing deal

New Delhi: Even as a meeting of the Air Asia India board is expected on Tuesday, lawyers of former Air Asia India Chief Executive Officer (CEO) Mittu Chandilya say the brand-licensing agreement signed between Air Asia Berhad group CEO Tony Fernandes, representing the Indian joint venture, and T Kanagalingam, who was then chief operating officer of Air Asia Berhad, represents a “conflict of interest” because both held top positions in the same airline.

The lawyers say Air Asia India needs to revoke the licensing agreement so that management control moves from Malaysia to India, as required by FDI guidelines. Under the FDI rules for aviation, while foreign carriers can hold up to 49 per cent in a joint venture, the management of the firm has to be in Indian hands.
Srinivas Mohanty, Chandilya’s lawyer, points out: “There is a conflict of interest in the licensing agreement as the two signatories of the document are both from the same company — Air Asia Berhad. Both of them have become judges in their own cause. So any change in management control from Malaysia to India would require a revocation of this agreement. We will take up this matter up in court.”

Emails to Air Asia Berhad and Air Asia India did not elicit any response. However, the board meeting is expected to discuss restructuring the management. The company has to appoint a CEO.

Mohanty says based on the brand-licensing contract, signed in April 2013, the licensee (Air Asia India) had to observe and comply with the requirements to be determined by Air Asia in virtually all key areas.
19/06/18 Surajeet Dasgupta/Business Standard

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