Contributor - Asia

Jennifer Meszaros

AirAsia&nbsp;co-founders&nbsp;CEO Tony Fernandes and chairman Kamarudin Meranun&nbsp;will step down from their executive roles temporarily over alleged bribery involving the sale of Airbus aircraft, the Malaysian airline said Monday. The move comes just days after the airframe maker reached a record-breaking $4 billion bribery settlement with U.S., French, and British authorities, ending a four-year investigation into a string of corruption allegations.

 


According to documents filed in the Airbus case, AirAsia and its long-haul affiliate, AirAsia X, allegedly accepted an “improper payment” of $50 million from Airbus between October 2013 and January 2015 in return for a 180-aircraft order, later amended to 135. The documents also revealed that Airbus had offered an additional $55 million to AirAsia executives that it ultimately did not pay due to “heightened scrutiny of [business partner] engagements”&nbsp;instituted in October 2014 by an internal watchdog committee at the European airframer.

 


The fresh allegations center around a 2012 sports sponsorship agreement involving the now-defunct Caterham Formula 1 racing team, which Fernandes and Meranun jointly owned. According to Britain’s Serious Fraud Office (SFO), Airbus paid $50 million to “directors and/or employees” of both airlines to sponsor Caterham. In a company statement released on Saturday, AirAsia denied any wrongdoing, calling Airbus’s sponsorship of Caterham “a well-known and widely publicized manner bringing branding and other benefits” to the French aircraft manufacturer.&nbsp;

 


Shares of AirAsia and AirAsia X plummeted 11 and 12 percent, respectively, on Monday following the SFO’s allegations on Friday. According to a company statement, Fernandes and Meranun will step aside from their roles for at least two months but will remain advisers. Senior AirAsia executive Tharumalingam Kanagalingam will serve as the airline’s acting CEO, effectively immediately, while a committee comprising non-executive board members of the company’s board reviews the allegations and “take any necessary action.” Meanwhile, Malaysia’s anti-graft agencies—the Malaysian Anti-Corruption Commission (MACC) and Malaysia’s Securities Commission—have both launched their own investigations to determine whether AirAsia and its affiliate broke securities laws.

 


In a separate development, Sri Lanka on Sunday said it would launch its own probe into bribery allegations involving Airbus and its state-owned carrier. According to the SFO, Airbus had hired the wife of a SriLankan Airlines executive to serve as the airframe maker’s intermediary and had misled Britain’s UKEF export credit agency&nbsp;over her name and gender, while paying $2 million&nbsp;to her company. On Monday, authorities moved to issue a warrant for the arrest of SriLankan Airlines’ former CEO, Kapila Chandrasena, and his wife on money laundering charges.

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AirAsia Boss To Step Down Amid Bribery Probe

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