CBI To File Report On Alleged Lobbying By AirAsia To Get International Flying Rights
A model AirAsia Bhd. aircraft. (Photographer: Fabrice Dimier/Bloomberg)

CBI To File Report On Alleged Lobbying By AirAsia To Get International Flying Rights

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The Delhi High Court on Thursday asked the Central Bureau of Investigation to file a report relating to alleged lobbying by AirAsia India while trying to get international flying rights in violation of foreign investment norms and dismissed a plea by Bharatiya Janata Party leader Subramanian Swamy seeking interim stay on the airline’s application.

A bench of Chief Justice DN Patel and Justice C Hari Shankar directed the agency to file the report in a sealed cover and listed the matter for final disposal on Sept. 26. The court said: “We are not inclined to grant the stay prayed for...” and dismissed Swamy’s application in which he has sought a stay on the AirAsia India’s plea for an international licence to fly internationally.

The application was filed in a pending petition challenging the Foreign Investment Promotion Board clearance granted by the Centre to AirAsia (India) Pvt Ltd. The court noted that an interim order was passed in Feb. 2014, declining a similar relief to Swamy on the ground that the court did not have the power to judge an economic policy of the government.

In the other application seeking to know the status of the investigation in the criminal case, Swamy has said he had sent a complaint and letters to the CBI in March and July, last year regarding the investigation against AirAsia for alleged criminal breach of trust and misappropriation.

The plea said as per media reports, the CBI has been probing AirAsia India Pvt. Ltd. in connection with the alleged corruption in attempts to get an international operation clearance from the government. Besides CBI, the Enforcement Directorate has lodged a money laundering case against some of the officials of AirAsia in the matter.

The application said the investigation conducted by the CBI was very relevant and crucial for adjudication of this petition since it has raised questions on the decisions and issues which are being probed by the agency. The Centre had earlier denied that there was any violation of FDI norms while granting approval to low-cost carrier AirAsia (India) Pvt Ltd—a joint venture of Tata Group and Malaysia-based AirAsia Berhad.

It had filed the affidavit in response to Swamy’s another application in which he has alleged that Foreign Direct Investment norms were violated while granting approval to set up AirAsia India. It had said that FDI was permissible in an existing airline as well as a new venture.

On the issue of grant of international flying rights to AirAsia, the government had said it will take a decision after considering all aspects of the matter as well as the rules and laid down policy in this regard, and there was no need to pass an order putting on hold the low-cost airline's application.

The government has contended that Swamy's application was "devoid of any merit" and "it may be dismissed". In his application, Swamy has claimed that since the legality and validity of the principal permission -- for flying domestic routes-- granted to AirAsia India has been challenged in the court, the airline ought not to be granted rights to fly internationally.

He has sought directions to the Union of India not to process the application of AirAsia until the final disposal of the main petition in which the principal permission has been challenged. Swamy had earlier argued that the flying rights granted to the carrier was in violation of the government's policy on foreign investment.

He had said that according to the policy, foreign investment was allowed only in existing airlines and was not meant for floating or starting a new airline, like AirAsia India. The BJP MP had also alleged that there were questionable transactions in connection with the setting up of AirAsia India.

The Federation of Indian Airlines had earlier alleged that the Directorate General of Civil Aviation was "deliberately turning a blind eye" to the issue. Malaysia's largest budget-carrier AirAsia had set up the joint venture, AirAsia India, with the Tata Group and Telestra Tradeplace to launch the regional airline in the country.

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