Business

AirAsia boss had board’s approval to boost brand through sponsorship – report

AirAsia Group chief executive officer Tan Sri Tony Fernandes

Ahirul Ahirudin
Written by Ahirul Ahirudin

KUALA LUMPUR – February 19, 2020: The sponsorship of a Formula 1 racing team by AirAsia Group was apparently approved by the company’s directors back in 2010.

The Star today reported that the AirAsia board had approved an amount of up to $250 million (RM1.03 billion) for the airline’s chief executive Tan Sri Tony Fernandes to boost its brand through sponsorships.

The report raised doubt on an allegation arising from a recent settlement between UK Serious Fraud Office’s (SFO) and Airbus concerning a $50 million (RM207 million) sponsorship of the Caterham Formula 1 racing team, which was alleged to be part of a deal involving an order of 180 aircraft by AirAsia.

Some of the documents released after the settlement include trail of emails that showed interactions between Airbus and key decision makers of AirAsia.

The AirAsia Group had rejected the allegation of wrongdoing which was said to have taken place between 2013 and 2015.

The Star quoted a source who pointed out that based on the document released, there was a timeline mismatch as the content of the emails released before October 2013 were not part of the charge against Airbus.

“Thus, how can emails for sponsorships that had already happened from 2010 to 2011 be used as evidence for sponsorships in 2013 to 2015?” asked the source.

The report also noted that prior to October 2013, AirAsia already secured sponsorships totalling $66 million (RM274.4 million).

It also detailed how Airasia and Airbus had in June 2011 announced a US18.2 billion (RM75.7 billion) deal for 200 airplanes, which analysts at that time deemed to be a necessary deal.

The source was also quoted in the report as saying that an independent audit, commissioned by the AirAsia’s board should determine on whether the pricing secured from Airbus were fair or overpriced.

“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 that that time,” said the source.

The Star report also pointed out how SFO had an inconsistent track record as it has lost a number of high profile cases in the courts.

The SFO’s charges against former Tesco executives, accused of being the masterminds behind a major accounting scandal, were thrown out last December after a judge deemed the case too “weak” to face a jury.

The SFO also saw its case against Barclays bank, over a Qatar fundraising, dismissed by the court in 2018. The SFO later lost a high court appeal to reinstate those charges.

Until 2017, former UK prime minister Theresa May had tried to abolish the SFO. She intended to have the SFO absorbed by the larger National Crime Agency.

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Ahirul Ahirudin

Ahirul Ahirudin