SOME of the right actions the board needs to take are happening at AirAsia. Tan Sri Tony Fernandes and Datuk Kamarudin Meranun, both implicated in an RM204 mil bribery scandal involving the purchase of Airbus planes, relinquished their executive roles last night for two months, or such other period as the company deems necessary.
“We categorically deny any and all allegations of wrongdoing or misconduct on our part as directors of AirAsia. We would not harm the very companies that we spent our entire lives building up to their present global status.”
This then is the difficult part – the investigations. Airbus via their court-sanctioned settlement with the UK’s Serious Fraud Office has admitted bribing AirAsia officials and is paying huge penalties amounting to some four billion Euros in three jurisdictions.
The RM204 mil payment as sponsorship to Caterham, as pointed out in press reports, quite clearly implicates Fernandes and Kamarudin who owned the F1 company.
It will be a tough investigation involving legal issues and establishing facts. It will be beyond the capability of the non-executive directors of which four of the remaining five are “independent” and one “non-independent”.
They will thus have to appoint reputable independent outside investigators whose brief must be to investigate independently and fairly, and whose responsibility should be to all shareholders of AirAsia. If that is done, then there is a fair chance that whatever the outcome, it will be accepted in good faith.
Often, independent directors, although they have a fiduciary duty to be independent, are not because of long-standing relationships with some shareholders who may have sought them out to be directors.
The other five directors besides the duo are all non-executive directors. The non-independent director is Datuk Abdel Aziz @ Abdul Aziz bin Abu Bakar. The others, all of whom are independent non-executive directors are Datuk Mohamed Khadar Merican, who is also chairman of the audit committee, Datuk Fam Lee Ee, Stuart L Dean and Noor Neelofa Mohd Noor.
On their shoulders will rest the independence of the investigations and they must bear in mind their fiduciary duties.
There is a further complication. Three bodies have already said they have started their own investigations and these will have in addition the cooperation of the UK authorities. They are the Securities Commission, the MACC and aviation commission Mavcom.
There will be four layers of clearing involved including AirAsia’s board. And if the duo doesn’t clear all eventually, there will be further questions for AirAsia and its future. While uncertainty remains, the tentative steps towards resolution have been taken. – Feb 4, 2020