AirAsia denies link to Rolls-Royce bribery scandal

air-asia-rolls-royce-1

PETALING JAYA: Low-cost carrier AirAsia has denied allegations of corruption linked to the recent bribery investigation which saw Rolls-Royce paying authorities in three countries a total of US$808 million in fines, Financial Times (FT) reported.

The inquiry by the United Kingdom’s Serious Fraud Office (SFO), which led to the aircraft engine maker admitting it had paid more than US$35 million in bribes in order to win contracts, had also alleged that Rolls-Royce employees had bribed an AirAsia executive with a US$3.2 million (RM14.2 million) discount for the maintenance of a private jet owned by Tune Group.

In its inquiry, the UK SFO alleged that Rolls-Royce did not prevent its staff from offering the discount to an AirAsia executive, “despite those (Rolls-Royce) employees believing that, in consequence, the AirAsia executive intended to perform a relevant function improperly.”

According to FT, SFO had alleged that the request for the “discount” was made by the AirAsia executive in return for “showing favour” towards Rolls-Royce in the purchase of products and services.

In response to the allegations, the Sepang-based budget airline, said it had “followed all procedures” in order to get the discounts given by Rolls-Royce for the maintenance of the private jet used by its top executives for business travel.

It added that the credits were used to offset the operational costs of the corporate jet used by senior executives of AirAsia X – the carrier’s long-haul arm.

“AirAsia and AirAsia X board of directors and management were kept informed at all times of transactions relating to the jet, the upkeep for which was also clearly spelt out in the annual reports for both companies and AirAsia X initial public offering prospectus,” the airline said, according to FT.

Rolls-Royce’s settlement payment of US$808 million will ensure it is not prosecuted any further, as long as it abides by the terms of the settlement.

However, according to FT, UK and US investigators are expected to launch criminal charges against the individuals involved in Rolls-Royce in the coming months.

Another aspect to the allegation, FT reported, is that the discount given by Rolls-Royce also coincided with the negotiation by AirAsia with an aircraft manufacturer whose planes were fitted with Rolls-Royce engines, and for which the British company would provide servicing.

The UK SFO inquiry also alleged that the purpose for the discounts was only made known to a single senior employee at AirAsia.

In its defence, Rolls-Royce had revealed to the UK SFO a message by its compliance department warning against providing the discount, saying it could not grant the AirAsia executive preferential rates on a personal aircraft just because of the business the two companies were transacting.

“The two should not be linked as there are both legal and ethical implications to doing so,” the Rolls-Royce compliance department had said, FT reported.

Last week, investigations begun in both Thailand and Indonesia related to executives of both countries’ respective national carriers linked to the Rolls-Royce bribery scandal.