Malaysia Probes AirAsia Corruption Allegation in Airbus Deal
(Bloomberg) -- Malaysia’s anti-graft agency said it’s already investigating corruption allegations surrounding AirAsia Group Bhd. as detailed in Airbus SE’s record $4 billion bribery settlement.
The Malaysian Anti-Corruption Commission is in touch with U.K. authorities on the matter, Chief Commissioner Latheefa Koya said in a statement on Saturday. Documents filed in the Airbus case said the planemaker paid $50 million in sponsorships to a sports team jointly owned by two AirAsia executives as a reward for an order for 180 aircraft, later amended to 135. The executives were not named.
AirAsia “vigorously rejects” all allegations of wrongdoing, it said in a statement. “AirAsia executives negotiated rigorously in the interests of the company and had at all times acted in good faith,” it said, adding the company and its executives will fully cooperate with the Malaysian anti-graft agency and relevant authorities.
Airbus’s $4 billion settlement is the biggest corporate bribery case on record. The company admitted guilt to crimes that spanned 13 years and involved countries from Russia to China.
The Malaysian probe adds to the troubles of AirAsia founder Tony Fernandes, who has also been summoned by India’s court to face allegations that he paid bribes to influence local policy. The company has previously denied wrongdoing.
The reference to AirAsia in the Airbus documents centers around a sponsorship deal for an unidentified sports team. The papers state that payments made from October 2013 onward were intended to influence AirAsia executives to act improperly. After a meeting with AirAsia, a very senior Airbus employee reported back to other senior employees that the carrier was willing to take the aircraft starting in 2015 but that the executive was “insisting on the early payment of his sponsorship.” Another senior employee wrote in a subsequent message that the deal would involve Airbus advancing $20 million of the payment, while another deal for A330 aircraft would involve another $30 million.
In 2009, Fernandes together with AirAsia Group Chairman Kamarudin Meranun and Nasaruddin Nasimuddin, chairman of car assembler Naza Group, pitched in to found Caterham Formula One Team, which later counted Airbus among its sponsors. By 2015, the team started auctioning its assets after failing to find a buyer.
Airbus’s sponsorship of the sports team was “a well-known and widely publicized matter bringing branding and other benefits to Airbus,” AirAsia said in the statement on Saturday, without naming F1.
“As AirAsia and its executives have no visibility on Airbus’ internal processes, we cannot comment on or be associated with any alleged failures or lapses on the part of Airbus to comply with its own policies or applicable legal requirements,” the airline said.
The Airbus documents show that at one point external analysis was obtained regarding the value of the sponsorship, which a very senior employee in compliance at Airbus considered when he strongly advised making the contribution transparent to the AirAsia management “to mitigate the risk of being accused of conspiracy on transfer value from the airline to the majority shareholder private interests.”
The documents also detail another $55 million of promised payment relating to an order of 50 A330-900neo aircraft bought by AirAsia. After the order was announced in 2014, an AirAsia executive emailed an Airbus senior employee stating, “We have kept our side of the deal...pls don’t let us down.” But Airbus then initiated a review of third-party relationships which led to the payment never being made.
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