Thursday, July 25, 2013

AirAsia, Tata JV deal fraught with illegalities: Swamy

The joint venture between Malaysian low-cost carrier AirAsia and Tata Group has been challenged in the Supreme Court by Subramanian Swamy. In a public interest litigation Swamy has sought cancellation of Foreign Investment Promotional Board (FIPB) clearance to AirAsia.
In an interview with CNBC-TV18, Swamy said that much talked about AirAsia deal is fraught with illegalities. Swamy alleged that only because of the commerce ministries’ huge pressure the civil aviation have decided not to pressure its point relating to allowing foreign direct investment only in existing airlines and not in new joint ventures.
Swamy also raised issue on definitions of effective control and ownership. AirAsia India is a joint venture of Asia’s largest low-cost airline AirAsia Bhd, Tata Sons Ltd and Arun Bhatia of Telestra Tradeplace Pvt Ltd. Tata Sons has a 30% stake in Air Asia India, with Arun Bhatia of Telestra Tradeplace owning 21%.
“Bhatia has some business connections with Fernandes. So, they can collude. So, this is not effective control,” Swamy alleged.
25/07/13 moneycontrol.com