An audit investigation into the alleged “fraudulent transactions of Rs 22 crore” in Tata Group’s aviation joint venture with AirAsia as mentioned by ousted Tata Group chairman Cyrus Mistry is already underway, senior company officials told HT.
“It may have come before the world now but the audit investigation has been going on for a long time. What is very clear is that Mr Ratan Tata wasn’t involved in the operational decisions taken by AirAsia India (AAI), which has its own board and chief executive and chief financial officer,” said an official, who did not wish to be named.
The AirAsia India spokesperson did not comment for the story.
Mistry, in his letter to the directors of Tata Sons, had indicated that he did not want the group to enter aviation.
“My pushback was hard but futile. However, I was able to extract a promise of no debt to be raised at the level of the JV as well as limiting Tata Sons investment to 30% of the $30 million equity,” he said in the letter.
However, earlier this year, the Tata Group increased its stake in AirAsia India to 49%. Two of the airline’s directors, S Ramadorai and R Venkataramanan, hold 2% stake. The remaining 49% is held by AirAsia.
Tata Group officials, however, said the return of Ratan Tata as interim chairman did not mean that the conglomerate will further increase their stake in AirAsia India.
“His (Ratan Tata’s) love for aviation is well known, but the airline is working fine and there are no plans to increase stake,” one official said.
The aviation ministry, meanwhile, is keeping a close watch on the developments at AirAsia India following the disclosures made by Mistry.
“We are waiting for any input from any quarter,” civil aviation secretary RN Choubey said. “We have not received anything so far.”
However, an aviation ministry official said: “If anything new is brought to our attention, appropriate authorities will look into it.”
The Federation of Indian Airlines, which represents IndiGo, Jet Airways, SpiceJet and GoAir, has complained to the government that AirAsia India is controlled by the foreign partner. The Brand License Agreement signed between AirAsia India and AirAsia Bhd on April 17, 2013, and reported by HT on April 12, raises questions on whether the airline has broken rules by giving away effective control to its foreign partner.
“The matter is in court. The next hearing is on November 7. The court will go by evidence,” said a ministry official.