Kamarudin, Tony Fernandes to relinquish executive posts amid Airbus bribery probe

  • Kamarudin, Tony Fernandes to relinquish executive posts amid Airbus bribery probe

Kamarudin, Tony Fernandes to relinquish executive posts amid Airbus bribery probe

AirAsia Group 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 US$50 million (S$68.4 million) to win plane orders from the company.

This means Fernandes, who was chief executive officer cum executive director, has been redesignated as non-executive director, while Kamarudin, who was AirAsia's executive chairman, is now the company's non-executive chairman.

Senior company executive Tharumalingam Kanagalingam will be the acting CEO, with the changes effective immediately. This is in clear violation of fundamental legal principles of fairness.

In the statement, AirAsia said that all dealings leading to the purchase of planes had been "undertaken directly with Airbus on an arm's length basis, and without the involvement of any third parties or intermediaries". We would not harm the very companies that we spent our entire lives building up to their present global status.

It said Fernandes and Kamarudin had been retained by the board committee of non-executive independent directors to be advisors to the company during the two-month period, "in view of the current hard economic circumstances facing the airline industry".

"So, as to facilitate a full and independent investigation by AirAsia, we are relinquishing our executive roles with immediate effect for a period of two months, or such other period that the companies may deem fit", they said.

"The entering into of each aircraft purchase agreement was never made by any single individual decision, but instead arrived at through careful evaluation, deliberation and the collective decision of the board members after taking into account technical specifications, aircraft flight performance and operating economics", AirAsia said in a statement on Sunday.

Both Kamarudin and Tony Fernandes said they will nonetheless continue to assist AirAsia in an advisory capacity as and when required and welcome any investigations by the authorities.

AirAsia has said it will fully cooperate with Malaysia's Anti-Corruption Commission, which is working alongside Britain's Serious Fraud Office (SFO) probing the claims.

Both AAGB and AirAsia X Bhd plunged in active trade after the report on bribery probe surfaced.

Airbus allegedly provided the US$50 million in the form of a sponsorship for a sports team owned by the two executives. AirAsia X, meanwhile, fell 1 sen or 7.69% to close at 12 sen, giving it a market capitalisation of RM497.78 million.

The Securities Commission Malaysia had said that it will examine the statement of facts in the British case vs Airbus SE which disclosed several allegations against both companies.

Yesterday, AirAsia said it was neither involved "in any way whatsoever" with the United Kingdom 's investigation of Airbus, nor given any opportunity to provide any information or clarification to the United Kingdom authorities.

The company said Kamarudin and Fernandes have notified the committee of their decision.

Three Malaysian authorities are now probing the allegations, namely the Securities Commission, the Malaysian Anti-Corruption Commission, and the Malaysian Aviation Commission.