 "ED summons AirAsia India over alleged FEMA violation")
The Enforcement Directorate (ED) has issued summons to AirAsia India in connection with alleged violations of Rs 22 crore under Foreign Exchange Management Act (FEMA).
Confirming the development, a top ED official told Business Standard that the representative of AirAsia has been asked to be present before it next week in Mumbai.
“We have initiated the probe in the matter under Section 3 of the FEMA. Primarily, the focus is to see the irregularities in the said transactions involving non-existent parties in India and Singapore,” said the official cited above.
In an e-mail response, an AirAsia spokesperson said, “We have not received any official communication yet. If and when we do, the company will take appropriate steps.”
The move comes in the wake of Cyrus Mistry’s revelation of a Rs 22 crore “fraud” in AirAsia India and subsequent complaint by BJP MP Subramanian Swamy seeking an investigation.
AirAsia India is a joint venture between Tata Sons and Malaysia’s AirAsia Berhad. Both own 49 per cent each in the airline, while the remaining two per cent is owned by chairman S Ramadorai and Director R Venkataramanan, who is also a managing trustee of Tata Trusts.
In a letter to the Tata Sons board on October 25, Mistry had alleged fraudulent transactions of Rs 22 crore had taken place at the airline involving non-existent parties in India and Singapore. He had written that despite forensic investigation revelations, executive trustee Venkataramanan, who is on the board of AirAsia and a shareholder in the company, considered these transactions as non-material and did not encourage further study.
“It was only at the insistence of independent directors, one of whom immediately submitted his resignation, that the board decided belatedly to file a first information report (FIR),” he had said.
After Mistry's allegations, the forensic audit carried out by Deloitte revealed amongst other things, questionable payments of Rs 12.28 crore by the airline to Singapore-based HNR Trading for liaisoning with the government.
Additionally, a payment of Rs 10 crore was made to an entity called Link Media Immigration Services Pvt Ltd for media services.
But, the audit found no such company registered with the corporate affairs ministry and site visits to listed addresses revealed no such business establishment.
The forensic audit was ordered following complaints of misappropriation of funds by former executives of the airline and an internal audit. Following the complaints, an internal audit was ordered by the airline’s management.
AirAsia india in rough weather
- The probe will also look at a specific transaction of Rs 12 crore, of Rs 22 crore, made to a Singaporean firm
- “It was only at the insistence of independent directors, one of whom immediately submitted his resignation, that the board decided belatedly to file a first information report (FIR),” Mistry had said
- After Mistry’s allegations, the forensic audit by Deloitte revealed questionable payments of Rs 12.28 crore to Singapore-based HNR Trading for liaisoning with the government
- Additionally, a payment of Rs 10 crore was made to an entity called Link Media Immigration Services Pvt Ltd for media services
