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It's a redux as Tatas' Venkataraman says AirAsia probe rooted in Cyrus Mistry’s 'baseless charges'

Venkataramanan is responsible for management and oversight of all the Tata Trusts, Sir Dorabji Tata Trust being the largest of these

May 31, 2018 / 11:40 AM IST

The bitter battle of 2016 between Tata Sons and its former Chairman Cyrus Mistry is back. This follows the May 29 filing of a case by the Central Bureau of Investigation probe against Malaysia’s AirAsia for allegedly entering into a criminal conspiracy with the United Progressive Alliance government in 2013-14. The latest fire comes from Ramachandran Venkataramanan, Managing Trustee of the Sir Dorabji Tata Trust and non-executive director of AirAsia India. He is one of the nine mentioned in the CBI file.

“It is commonly known that the present accusations qua Air Asia India find their root in baseless allegations made by Mr. Cyrus P Mistry and the Shapoor Pallonji Group against Tata Trusts Trustees (me included) and Tata Sons in his ‘revenge’ legal actions,” a press statement, sent by Tatas’ public relations agency, quoted Venkataramanan as saying.

Venkataramanan is responsible for management and oversight of all the Tata Trusts, Sir Dorabji Tata Trust being the largest of these. Sir Dorabji Tata Trust and Sir Ratan Tata Trust are two of the largest Tata trusts, all of which collectively hold 66 percent stake in Tata Sons, the holding company of all Tata Group companies. The Law graduate from Mumbai University holds 1.5 percent stake in AirAsia India.

The CBI’s First Information Report alleges that officials of AirAsia and its Indian unit connived with officials in the aviation ministry to get the then prevailing rule of 5/20 scrapped to secure a licence for the airline to fly overseas from India. Tony Fernandes, the maverick chief executive officer of AirAsia Berhad, and company executive Tharumalingam Kanagalingam are also named in the FIR.

Under the 5/20 rule, any airline from India, keen to operate overseas flights, should have been operating for five years and had to have 20 planes in its fleet.

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It is also alleged that AirAsia India was effectively controlled by its Malaysian parent in violation of the Indian laws that forbid foreign control of a local airline.

CBI’s FIR relies on emails exchanged between officials of AirAsia, its Indian unit and Tata Sons.

In one such email, Venkataramanan is alleged to have written to Kanagalingam, ”Met Mr Ajit Singh a short while ago. He said approvals should come soon and that our planning should be on the basis of the 5/20 rule getting scrapped.”

Defending the licence given to AirAsia, Venkataramanan said in the press release that it was one of the many airlines that had sought a review of the policy.

“I reiterate that all allegations of wrong doing or illegality against me are baseless. These motivated allegations are part of the smear campaign run to discredit me and the work being done by the Tata Trusts, which contribute Rs 1,200 crores each year to philanthropic activities. Despite, Mr Cyrus Mistry and his company’ efforts to discredit the Trusts, we resolve to enhance the quality of life of our people,” Venkataramanan said in his media statement.

It may be added here that the 5/20 rule was a very unreasonable and restrictive one and clearly favoured the existing airlines by limiting the competition in the sector till it was scrapped.

Mistry had accused Venkat, as he is popularly known, of two counts. These included asking Tata Capital to give loans to Chennai-based entrepreneur C Sivasankaran that turned bad and of hiding fraudulent transactions in AirAsia India.

In a separate statement, AirAsia on Wednesday said the regulator Directorate General of Civil Aviation had in February 2017 found it to be in compliance with all the Indian laws. It said it would cooperate with the relevant authorities to facilitate an early conclusion of this matter.
Moneycontrol News
first published: May 31, 2018 11:40 am

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