(The Star/ANN) - PETALING JAYA: Shares of AIRASIA Group Bhd continued to suffer from recent setbacks, with nearly RM940mil being wiped off from its market capitalisation between Jan 31 to Feb 4.
The decision by its founders to temporarily relinquish their executive posts due to the alleged Airbus corruption controversy, in addition to the continuing novel coronavirus outbreak in just two days, pushed down the stock by 10.16% or 13 sen to RM1.15 yesterday.
Meanwhile, its long-haul subsidiary, AirAsia X Bhd, saw its share price falling by 4.17% or 0.5 sen to a record-low of 11.5 sen.
Over the last 12 months, the share prices of AirAsia Group and AirAsia X have dropped by 44.14% and 61% respectively.
Both companies were recently mired in the allegations by the United Kingdom’s Serious Fraud Office (SFO) that aircraft maker Airbus had bribed the officials of AirAsia Group and AirAsia X US$50 million (about RM206mil) in the form of sports sponsorship to secure plane orders. The UK SFO allegations concerned a 2012 US$50mil sponsorship between Caterham Formula 1 racing team, which was founded by Tan Sri Tony Fernandes, and Airbus’s former parent, EADS.
For context, Fernandes is the chief executive officer of AirAsia Group.
In a statement issued yesterday, Fernandes and Datuk Kamarudin Meranun, who is the airline’s executive chairman, have categorically denied all allegations of wrongdoing or misconduct.
Both of them were also the founders of AirAsia Group.
“We refer to the Deferred Prosecution Agreement entered into by Airbus SE and the SFO on Jan 31,2020. In return for a suspension of prosecution by the SFO, Airbus has agreed to pay a significant fine and costs to the SFO and also agreed to a statement of facts that appears to implicate executives of AirAsia.
“The investigation by the SFO which reportedly took four years did not even once reach out to us (nor AirAsia, as stated in their press release of Feb 1,2020) for any explanation or clarification. This is a clear violation of the fundamental legal principle of fairness and access to justice.
“We categorically deny all allegations of wrongdoing or misconduct on our part as executives and directors of AirAsia. Caterham F1, the company alleged to have been sponsored improperly by Airbus was at the relevant time a Formula 1 Racing team that had gone round the globe promoting amongst others AirAsia, AirAsia X, GE and Airbus.
“Throughout the period we were shareholders in Caterham, the company made no profits and was eventually disposed for 1 pound sterling in 2014. From start to finish this was a branding exercise and not a venture to make profits, ” they said.
Both Fernandes and Kamarudin welcomed any investigation by the authorities, pointing out that it is the only way for them to receive “the fairness and access to justice denied by the SFO process to date”.
On Feb 1, the Malaysian Anti-Corruption Commission confirmed that it has already initiated investigations into corruption allegations involving AirAsia executives.
Meanwhile, on Feb 2, Securities Commission Malaysia chairman Datuk Syed Zaid Syed Jaafar Albar said that the commission will probe allegations against AirAsia Group and AirAsia X to determine if there is any breach of securities laws.
Commenting on the Airbus corruption controversy, MIDF Research opined that the negative development could be an overall sentiment dampener to AirAsia Group, especially in an operating environment that is already facing headwinds.
“Until the outcome of the investigations are known, precautions have to be taken in valuing the company as any adverse findings could pose an impact to the airline’s reputation and potential financial penalties.
“Nevertheless, if the allegations are found to be untrue, this will serve as a golden opportunity for both co-founders to strengthen their trustworthiness back in the company and subsequently, the airline industry, ” it said in a note yesterday.
