Sources told Moneycontrol that the ED summons could be in regards to an alleged FEMA violation and that its Delhi investigation cell is currently investigating the case
The Enforcement Directorate (ED) has summoned the entire top management of AirAsia, including its Malaysia-based CEO Tony Fernandes, in connection with a scam.
Officials said while Fernandes has been summoned on January 20, few others have also been asked to depose for questioning in the following days. The fresh summons have been issued to take the probe forward, they added.
The case relates to an alleged violation of norms by Group President Tharumalingam Kanagalingam also known as Bo Lingam, Arun Bhatia who held substantial stake in the airline, former Chairman S Ramadorai, Senior Group Executive Naresh Algan and ex-CEO Mittu Chandiliya for relaxation of the 5/20 rule to secure a licence to operate internationally as well as a violation of Foreign Investment Promotion Board (FIPB) rules for its Indian venture Air Asia India.
Investigation in the case was initiated on the basis of the claims of ousted Tata Group Chairman Cyrus Mistry's allegation that fraudulent transactions of Rs 22 crore, involving non-existent entities in India and Singapore, were carried out in an instance involving the airline.
For an airline to qualify to operate internationally, it had to meet the 5/20 rule, which mandates it to complete five years and possess 20 aircraft. The company didn't fulfil that requirement.
The Central Bureau of Investigation (CBI) had filed a case in June 2018 alleging that senior management of Air Asia had conspired with government officials in 2012 to secure FIPB clearance. Fernandes had allegedly lobbied with government servants for clearances, removal of existing 5/20 rule of aviation and change in regulatory policies, it alleged.
The investigation agency said a secret note was sent to Cabinet in February 2014 to amend the 5/20 rule, followed by a supplementary note on March 5 but the Election Commission of India didn't approve the same as dates for the general elections were already announced.
CBI said around Rs 12.18 crore was paid to a Singapore-based shell company HNK Tradings and a sham contract was signed with it.
Based on the first information report (FIR) filed by the CBI, the ED filed a case under Prevention of Money Laundering Act, 2002 (PMLA)
AirAsia India (AAIL) had refuted any wrong-doing and said the company was co-operating with all regulators and agencies to present the correct facts.Sources told Moneycontrol that the ED summons could be in regards to an alleged FEMA violation and that its Delhi investigation cell is currently investigating the case.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.