One of India's oldest philanthropic organisations was raided by the Central Bureau of Investigation (CBI) for the first time in a century. It's a big deal because the organisation in question is Tata Trusts, which owns two-third of the stock holding of Tata Sons, the apex company of the Tata group of companies.
"In about 100 year history of Tata Trusts it's for the first time that an investigation agency entered the building," a person with direct knowledge of the matter told The Economic Times. During the search, the CBI seized the laptop, iPhone and computer hard drives of Tata Trusts' executive R. Venkataramanan, who is also a director of AirAsia India, along with all the other accused named in the AirAsia case.
Sources added that the sleuths also seized Venkataramanan's SIM card and personal computer hard drive along with "documents unrelated to AirAsia or Venkataramanan". In addition, the CBI reportedly also raided the Bengaluru office of AirAsia and seized computer hard drives belonging to the airline.
In case you missed the big news, the CBI filed an FIR on Tuesday accusing AirAsia India, its officials as well as AirAsia Berhad of trying to manipulate government policies through corrupt means in order to bag an international licence for the domestic airline. The FIR named Group CEO of AirAsia Tony Fernandes, Tharumalingam Kanagalingam, the former Deputy Group CEO of Malaysia-based AirAsia Berhad, Venkataramanan as well as several others. According to the Tata Trusts website, Venkataramanan is "responsible for management and oversight of all the Tata Trusts".
The accused, according to the CBI, allegedly bribed government officials to secure the international flying permit for AirAsia India at a time when the 5/20 rule was in place. The rule, which came into effect in 2004, mandated airlines to have five years of experience as well as a minimum 20 aircraft-fleet to be eligible to fly on international routes. In 2016, this rule was partially eased as part of the new aviation policy, paving way for domestic airlines to fly overseas provided they deploy 20 planes or 20 per cent of their total capacity for domestic operations with no limit on years in operation. The eased norms benefited AirAsia India and Vistara, both partly owned by the Tata Group.
The CBI has alleged that payments to the tune of Rs 12.28 crore were remitted to India to lobby with public servants to tweak government policies during the UPA rule. It further alleged that the AirAsia Group has violated rules set by the now defunct Foreign Investment Promotion Board as well as foreign direct investment (FDI) norms by giving management control to a foreign entity, and making AirAsia India a de-facto subsidiary of AirAsia Group in the process.
To remind you, AirAsia India is a joint venture between the Tatas, which owns a 51 per cent stake, and Malaysia's AirAsia Berhad. According to the FDI policy between 2013-14, foreign airlines were allowed to own only 49 per cent shares in domestic airlines but effective management control must remain with the Indian partner, the agency claimed, whereas the domestic airline was being indirectly controlled and operated by the Malaysia group.
It further alleged that a secret note was sent on February 27, 2014 to Cabinet to amend rule followed by a supplementary note on March 05, 2014 which was not approved since Election Commission had announced Lok Sabha general elections on March 5, 2014.
Fernandes, who is currently in Malaysia, has been summoned to appear before the CBI on June 6. The report added that Fernandes has approached his lawyers seeking an opinion on whether Indian investigation agencies' jurisdiction extends till Malaysia. For the record, the two countries have signed a treaty on "mutual assistance in criminal matters", put up on the CBI website.
It's not just the CBI that is looking into the matter. Yesterday, the Enforcement Directorate (ED) also registered a criminal case of money-laundering against AirAsia officials and the other accused above. According to officials, ED pressed sections of the Prevention of Money Laundering Act (PMLA) to probe whether the alleged tainted funds were used to create illegal assets and it has taken cognisance of the CBI FIR to lodge its own case.
The agency, they added, will go into the money trail of the accused and the entire deal and a joint probe by the two agencies is expected to henceforth go forward in the case.
The agency's office in Mumbai is already probing a separate case against AirAsia and its executives under the Foreign Exchange Management Act, which was initiated on the basis of the claims made by the ousted Tata Group chairman Cyrus Mistry. The latter had alleged that fraudulent transactions of Rs 22 crore, involving non-existent entities in India and Singapore, were carried out in an instance involving the airline.
With PTI inputs