AirAsia Group Bhd. shares fell to their lowest level in six months after India said it’s investigating Chief Executive Officer Tony Fernandes and other officials for allegedly paying bribes to influence local policy.
India’s Central Bureau of Investigation said Tuesday the budget airline’s executives bribed Indian officials through middlemen to sway government decisions on aviation, including obtaining a flying permit for the local unit and approvals to operate internationally. While emails and calls to Fernandes elicited no response, the company denied any wrongdoing in a statement Wednesday.
AirAsia’s stock fell 7 percent to 3.08 ringgit on Wednesday, the lowest closing price since Nov. 28. It slid as much as 11 percent earlier in the day in Kuala Lumpur.
The probe poses uncertainties to AirAsia’s expansion plans. Fernandes has identified India as one of the main pillars of his pan-Asian dream as he seeks to capture a share of a market dominated by Gulf-based carriers and Air India. With the India unit, he’s planning more domestic flights, while international operations are on the cards early next year.
“AirAsia vigorously denies all accusations and contentions,” the company said in a stock exchange filing. The carrier will defend itself, it said. R. Venkataramanan, a Tata Group veteran and a non-executive director of AirAsia India who was also named in the police report, said in a separate statement he was “wrongly named as an accused.”
On Tuesday, AirAsia’s India unit also denied any wrongdoing and and said it was cooperating with authorities. The company began criminal and civil proceedings against a former chief executive officer in 2016 and hopes to bring an “early resolution to all such issues,” Shuva Mandal, the unit’s director, said in an emailed statement.
29/05/18 Shruti Srivastava and Anurag Kotoky/Bloomberg
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India’s Central Bureau of Investigation said Tuesday the budget airline’s executives bribed Indian officials through middlemen to sway government decisions on aviation, including obtaining a flying permit for the local unit and approvals to operate internationally. While emails and calls to Fernandes elicited no response, the company denied any wrongdoing in a statement Wednesday.
AirAsia’s stock fell 7 percent to 3.08 ringgit on Wednesday, the lowest closing price since Nov. 28. It slid as much as 11 percent earlier in the day in Kuala Lumpur.
The probe poses uncertainties to AirAsia’s expansion plans. Fernandes has identified India as one of the main pillars of his pan-Asian dream as he seeks to capture a share of a market dominated by Gulf-based carriers and Air India. With the India unit, he’s planning more domestic flights, while international operations are on the cards early next year.
“AirAsia vigorously denies all accusations and contentions,” the company said in a stock exchange filing. The carrier will defend itself, it said. R. Venkataramanan, a Tata Group veteran and a non-executive director of AirAsia India who was also named in the police report, said in a separate statement he was “wrongly named as an accused.”
On Tuesday, AirAsia’s India unit also denied any wrongdoing and and said it was cooperating with authorities. The company began criminal and civil proceedings against a former chief executive officer in 2016 and hopes to bring an “early resolution to all such issues,” Shuva Mandal, the unit’s director, said in an emailed statement.
29/05/18 Shruti Srivastava and Anurag Kotoky/Bloomberg
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