Report: AirAsia board greenlit Fernandes’ multi-million sponsorship deal to boost brand’s image in 2010

KUALA LUMPUR, Feb 19 — A plan by AirAsia Group chief executive Tan Sri Tony Fernandes for the airline to sponsor a Formula 1 racing team to boost its brand globally was approved by the company’s directors back in 2010, reported The Star. 

Citing unnamed sources, the report asserted that the board had given the green light to Fernandes and for amounts in access of US$250 million (RM1.03 billion) to be channeled towards sponsoring the racing team in efforts to make AirAsia a globally recognisable brand. 

This is in light of the recent bribery allegations brought against AirAsia by UK’s Serious Fraud Office (SFO) concerning their purchase dealings with aircraft manufacturers Airbus. 

The allegations include the airline purchasing planes at bloated prices, and that agreements between AirAsia and Airbus over purchase orders were improperly linked to a sponsorship deal by the aircraft maker towards the now defunct racing team which was jointly owned by Fernandes and his executive chairman Datuk Kamarudin Meranun. 

Both Fernandes and Kamarudin have since relinquished their positions within the airline for a period of two months to allow an independent probe by the management into the offences that were allegedly committed between 2013 and 2015. 

The allegations were made public after it was reported that Airbus and SFO had reached a settlement of around €3.6 billion (RM16.18 billion) with the aircraft manufacturers admitting to bribery across its global business dealings.

Reports included how SFO had accused the AirAsia and AirAsia X executives of receiving the US$50 million (RM207 million) bribe from Airbus as part of the deal to secure an order for 180 aircrafts.

It was reported that official documents also claimed to have revealed that Airbus employees had tried to pay an additional US$55 million (RM228 million) to the AirAsia and AirAsia X’s directors and/or employees but could not do so as there was a freeze on payments to agents and intermediaries on October 2014.

The Star report today detailed that among the documents were emails, which have since been made public, of communications between Airbus and key decision makers of AirAsia and AirAsia X. 

The report, quoting its source, claims the released documents showed mismatches between the period when the offences were allegedly committed and the dates that appeared in the corresponding emails. 

It claimed some of the emails within the documents were from before 2013 and hence insignificant to the allegations, as it was a period when AirAsia had already secured sponsorship deals from Airbus and involves and amount of US66 million (RM274 million). 

Today’s The Star report details how AirAsia and Airbus had in June 2011 announced a US18.2 billion (RM75.7billion) deal for 200 airplanes, with some aviation experts who weighed in said the decision was necessary for the airline while some suggested it was barely sufficient. 

The question was then raised whether or not Fernandes had committed any wrongdoing considering Airbus’ recent admittance, or did he overbuy planes for his airline as supposed inducement to secure sponsorship deals from the manufacturer. 

It was also suggested by the source that an audit be conducted on the purchase of those planes to establish whether the price paid was fair or overpriced, with external rumours suggesting that AirAsia had paid amounts below the average market price to buy the planes. 

“Perhaps Airbus should allow Fernandes to disclose the price of the planes he acquired for the AirAsia group, and compare it to the price Airbus sold its aircraft to other airlines at that time,” suggested the source. 

Another factor pointed out in The Star’s report was the inconsistent track record of the SFO, who had levied charges against several big named corporations but have also lost a number of them in court. 

Among the cases highlighted was when SFO accused former Tesco executives of being behind a major accounting scandal within the company only to have their case thrown out by a judge last year, who deemed the case too weak to face a jury. 

In 2018, SFO also lost their case against Barclays Bank in both the lower and higher courts when their charges surrounding a Qatar fundraising was thrown out. 

The report claims that in 2017, UK prime minister Theresa May at during her helm had tried to dissolve the SFO to be absorbed by the National Crime Agency.

A spokesman to AirAsia and AirAsia X refused to comment on the story when contacted by Malay Mail.