Business

AirAsia’s Fernandes denies Airbus bribe involving his former F1 team

KUALA LUMPUR: AirAsia's Tony Fernandes yesterday denied that a now-defunct Formula 1 racing team formerly co-owned by him had any links to a bribery scandal involving the Malaysian airline's only plane supplier, Airbus.

Mr Fernandes, one of the aviation industry's best-known faces, on Monday stepped aside as chief executive of Asia's biggest budget airline for at least two months, as the authorities investigate allegations that Airbus paid a bribe of US$50 million (S$68.5 million) through sponsorship of the Caterham F1 team to win orders from AirAsia.

AirAsia chairman Kamarudin Meranun stepped down along with Mr Fernandes, though both will remain advisers. The AirAsia co-founders, who bought Caterham in 2011, issued a joint statement yesterday reiterating they did nothing wrong.

Shares of AirAsia fell 5 per cent as the stock market opened in Kuala Lumpur yesterday. Those of long-haul subsidiary AirAsia X lost 8 per cent.

Malaysia's MIDF Research downgraded its recommendation on AirAsia stock to "neutral" from "buy" yesterday whereas AmInvestment Bank maintained its "sell" rating.

"We find it difficult to argue for a case that 'business as usual' will prevail in the absence of the direct involvement of Fernandes and Kamarudin in the management and decision-making process of the company," AmInvestment Bank said in a client note.

"The duo are the founding members, visionaries and key strategists for the group. This could not have happened at a worse time, amid the Wuhan conoravirus epidemic that is severely hurting the demand for air travel (which is partially offset by plunging prices of crude oil, and hence jet fuel)." - REUTERS

BUSINESS & FINANCE