AirAsia India is on the Enforcement Directorate’s radar after former Tata Sons Chairman Cyrus Mistry, in a letter to the board in October last year, highlighted financial problems and management shortcoming in the airline. In an interview with BusinessLine , AirAsia India CEO Amar Abrol shares the airline’s position with regard to several charges made against it. Excerpts:

What is the status regarding the investigations carried out by the ED?

As far as we are concerned, we are fully cooperating with the ED. They have not asked for any additional information so far. But whenever they do, we will continue to fully cooperate with them.

They sent us a notice in December and we responded accordingly. Even with regard to the case by Subramanian Swamy, whenever the court hearing comes up, we will respond accordingly.

Isn’t it a bit of coincidence that soon after Cyrus Mistry wrote a letter to the Tata Sons’ board about financial mismanagement, you released a statement that an internal probe had been carried out on the financial fraud?

We sent out the first statement on October 31 last year. We said we are pursuing an investigation with regard to a certain transaction. Every company has one thing or the other under scrutiny internally.

Since that information made it to the press, we said it is an internal matter and that we will take action as deemed necessary, with present or past employees. Subsequently, we received the ED notice, but they did not specify what they are looking for. They wanted a host of documents and we complied with their request.

When was this internal investigation carried out? Was it carried out when the then CEO was in office?

It was done in the normal course. It was an internal matter. It came to light during the statutory audit. Certain transactions were highlighted and the board said it needs to be probed.

So, it ordered for a special audit. Certain transactions were found to be dubious. Once the board took the decision, we filed a formal complaint with the Bengaluru Police.

Has the former CEO been named in the complaint?

The board of AirAsia India is pursuing an investigation. Since the matter is sub judice, there is no further information at the moment.

In spite of the fact that Tata Sons and its friends own a majority stake of 51 per cent in AirAsia India, there are reports that it is actually AirAsia Berhad which runs the airline.

See, it is a board-run company, and we comply with all the provisions of the Companies Act. I drive the day-to day-operations of the airline, and all effective decisions are made by me under the watchful eyes of the board. We have, in fact, more than quarterly board meetings. The control resides here. There is a proper delegation of authority with limits identified. Every decision is made in a transparent manner.

One of the investigations being carried out against the airline is that several norms were violated while setting up the airline…

We were granted the AOP (Air Operator Permit) by the regulator, DGCA (Directorate General of Civil Aviation).

So, obviously, enough due diligence was carried out before giving us the AOP and granting us the licence to carry out our operations. Whatever documents were required at that stage, they were submitted. The DGCA was asked to look into the brand-licensing agreement and the regulator is looking into it. It has to make submissions, and then we will wait for the courts to decide… We are very clear we have done no wrong. We continue to invest. When I took over, there were 690 employees, and as of December, it has gone up to 1,048.

Another charge against the airline is that most of the aircraft in your fleet are leased from AirAsia Berhad’s leasing company and hence the Malaysian partner benefits the most...

We don’t lease their aircraft. For aircraft number nine, 10, 11 and 12, the RFP (Request For Proposal) has been sent out to 30 leasing companies and some of them have responded.

There is a full team which carries out the evaluation. We make decisions which is good for the airline. Whatever is decided is fully shared with the board. The board is very, very careful that they get the bang for the buck.

Certainly, the shareholders want to make sure that we are spending the money appropriately.

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