AirAsia executives step aside to clear their names

BANGKOK, 6 February 2020; Airbus SE has agreed to pay a fine and costs amounting to EUR991 million in the UK, and in total, EUR3.6 billion as part the world’s largest global resolution for bribery, involving authorities in France and the United States.

The UK’s Serious Fraud Office has entered into a record-breaking Deferred Prosecution Agreement (DPA) with the global aerospace company Airbus SE following approval by Dame Victoria Sharp, president of the Queen’s Bench Division, announced  31 January.

The announcement comes a little under four years after the SFO began investigating the company over allegations that it had used external consultants to bribe customers to buy its civilian and military aircraft.

The indictment, which has been suspended for the term of the DPA, covers five counts of failure to prevent bribery. The conduct involves Airbus’ commercial and defence & Space divisions.

The conduct covered by the UK DPA took place across five jurisdictions: Sri Lanka, Malaysia, Indonesia, Taiwan and Ghana between 2011 and 2015.

The Judge ruled in a public hearing at the Royal Courts of Justice that the total sum (EUR983.97m plus the SFO’s costs of €6.9m) reflected the gravity of the conduct, the full cooperation of Airbus SE in the investigation.

As part of the DPA, the company has agreed to full cooperation with the SFO and its law enforcement partners in any future investigations and prosecutions. If the company does not honour the conditions of the DPA the prosecution may resume.  

Airbus SE has also reached a Convention Judiciaire d’Intérêt Public with the Parquet National Financier (PNF) and a Deferred Prosecution Agreement with the US Department of Justice and US Department of State.

In total, these agreements together with the SFO DPA require Airbus SE to pay approximately EUR3.6 billion (including EUR2,083,137,455 to the PNF and EUR525,655,000 to the US authorities) at the exchange rate at the time of payment.

In her judgment, Dame Victoria Sharp said: “The seriousness of the criminality in this case hardly needs to be spelt out. As is acknowledged on all sides, it was grave. The conduct took place over many years. It is no exaggeration to describe the investigation it gave rise to as worldwide, extending into every continent in which Airbus operates.”

The UK’s SFO director Lisa Osofsky said: “Airbus paid bribes through agents around the world to stack the decks in its favour and win contracts around the globe. Corruption like this undermines free trade and fair development, and it is to Airbus’s credit that it has admitted its culpability.

The SFO announced its investigation into Airbus back in August 2016, and the DPA ruling will now be in force until 31 January 2023.

Airbus SE is a Dutch and French domiciled company, registered in the Netherlands.

Meanwhile, the spotlight shone on Malaysia’s leading airline when local media reported the bribery allegations set out by the SFO involved two unnamed senior AirAsia executives according to prosecutors from the United Kingdom’s Serious Fraud Office.

SFO alleged that between October 2013 and January 2015, US$50 million was paid to sponsor a sports team that was jointly owned by two people described as AirAsia Executive 1 and Executive 2. It said Airbus employees offered an additional US$55 million, though no payment was made.

Statement by AirAsia executives

AirAsia CEO and its founder and chairman have vigorously denied the allegations that they received bribes of USD50 million. They have temporarily stepped aside to fight the accusations. 

In a statement released Tuesday the two top executives, Kamarudin Meranun and Tony Fernandes said:

“We refer to the Deferred Prosecution Agreement entered into by Airbus SE and the U.K. Serious Fraud Office (SFO) on 31 January 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 1 February 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 around 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 of for 1 pound sterling in 2014. From start to finish, this was a branding exercise and not a venture to make profits.

“So as to facilitate a full and independent inquiry by AirAsia, we are relinquishing our executive roles with immediate effect for an initial period of two months which may be extended at the discretion of the AirAsia Board as they deem fit based on the prevailing circumstances then.

At the request of the Board of AirAsia, we have agreed to continue to assist AirAsia in an advisory capacity as and when required.

“Finally, we welcome any investigation by the authorities as that is the only way we will receive the fairness and access to justice denied us by the SFO process to date. We will extend our fullest cooperation to them,” Kamarudin Meranun and Tony Fernandes concluded.

(Statement published in full without edits)