$4 billion was paid as a settlement. But that was just the beginning.
What Happened?
Air Asia’s CEO Tony Fernandes and Executive Chairman Kamarudin Meranun have stepped down from their positions for at least two months.
Why This Happened?
Because of the investigation into Airbus.
For over 10 years, the French and British authorities have been probing Airbus for alleged corruption over jet sales. Also, the U.S investigated the company over suspected violations of US export controls. Last week, Airbus agreed to pay up to 3.6 billion euros to settle the investigation.
However, AirAsia was also named in a bribery investigation by Britain’s Serious Fraud Office (SFO). It is alleged that Airbus paid $50 million as sponsorship for a sports team owned by two unnamed AirAsia executives. In return for this favour, AirAsia bought 180 aircraft from Airbus.
What Is The Impact?
The company’s shares are falling. Rapidly.
On Tuesday opening trade, shares of AirAsia plunged over 5%. They declined over 10% in Kuala Lumpur on Monday. The reason behind the fall in shares could be attributed to concerns about the airline’s governance. Also, this investigation is coming at a time when the company is struggling with flight cancellations due to the coronavirus epidemic.
One Scandal. Many Branches.
As per a document from the UK Crown Court, that Airbus hired and disguised around 5 million euros in payments to a close relative of a government official in Ghana. Once this news broke, the country said that it will “conduct a prompt inquiry to determine the complicity or otherwise of any Ghanaian government official, past or present,”. This news has sparked a political storm in Ghana and has also led to speculation on which government officials took the bribe from Airbus.
The document by SFO also said that Airbus had hired the wife of a SriLankan Airlines executive as its intermediary and misled export credit agency UKEF over her name and gender. Airbus also paid $2 million to the intermediary’s company. The office of President Gotabaya Rajapaksa said that Sri Lanka will conduct “a comprehensive investigation into reports of allegations over financial irregularities”.
In conclusion, we would like to say that Airbus paying 3.6 billion euros is definitely not the end of the bribery problem. The impact on AirAsia, Ghana and Sri Lanka are just a beginning and the more the investigation widens, the more details we would know about the depth of the Airbus bribery scandal.
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