Prime Minister, you are oh so wrong over AirAsia bribes

By P Gunasegaram

PRIME Minister Tun Dr Mahathir Mohamad got it terribly wrong when he jumped to AirAsia’s defence today over the RM204 mil bribery scandal involving Airbus and AirAsia. He has got his bearings way off the mark. 

In reported remarks in both Free Malaysia Today( “Nothing wrong in seeking an offset”) and Malaysiakini (“PM on AirAsia’s graft probe: Offset is not bribery”), Mahathir said there is nothing wrong with an offset in a business transaction provided the money is not pocketed.

The prime minister said normally, when the government procures equipment, they would ask for an offset. “And whether you regard an offset as bribery, that’s up to you,” he told reporters after an event in Kuala Lumpur, FMT reported.

Malaysiakini reported: “For instance, when we buy an aircraft we ask for offset. It is up to you to decide whether the offset is a (form of) bribery. For me, we don’t want to buy something expensive, we cannot accept this.

“If the money we obtain does not go into our own pockets but instead is meant for a certain purpose, then it becomes an offset and this is not bribery. That’s my view.”

But here’s where Mahathir got it wrong: The offset that AirAsia got, according to court documents, in a deal which Airbus made with the UK Serious Fraud Office (SFO), went not to AirAsia, but to a sports company owned by AirAsia officials in return for the purchase of 180 planes. He should have known this.

Since AirAsia itself did not own any shares in this sports company, and if the accounts in the court documents are true, then it went into some other company’s pockets, not AirAsia’s. That would be wrong, and therefore it is oh so wrong for the PM to effectively condone such an offence so publicly.

This is especially so since there are three investigative authorities – the MACC, the Securities Commission, and the Malaysian Aviation Commission investigating the allegations in the court documents. The non-executive directors of AirAsia are also in the process of investigating this matter.  

It comes too at a rather inappropriate time when the bribery court case involving the wife of the former prime minister is ongoing where she is charged with pocketing some RM187.5 mil in return for facilitating an RM1.25 bil solar hybrid power project. That’s 15% of the project value but smaller in absolute terms than the alleged bribe of RM205 mil involving Airbus and AirAsia.

Any statement that the PM makes over something as serious as this can be misinterpreted to mean that no offence has been committed in his view and therefore can be seen as not-so-subtle pressure on those whose duty it is to investigate this case fairly without fear or favour. 

The least that Mahathir should have done before making a comment such as this is to ascertain that he is aware of the facts of the case and the key legal points involved so that no wrong statement is made in this high-profile issue.

Also, as prime minister, he should be taking care to ensure that such “offsets” do not occur in government but should be made through a direct cut in prices so that there is no leeway for anyone to benefit from “offsets” which can be directed to many different places. 

According to British prosecutors from the SFO, Airbus employees also attempted to pay an additional US$55 mil to the directors and/or employees of AirAsia and AirAsia X but were prevented by an October 2014 freeze on payments to agents and intermediaries.

According to a Reuters report on Feb 1, the allegations concern a 2012 sponsorship agreement between the now-defunct Caterham Formula 1 racing team, founded by AirAsia CEO Tan Sri Tony Fernandes, and Airbus’ then-parent, EADS.

Fernandes and fellow AirAsia co-founder Datuk Kamarudin Meranun, also a shareholder then of Caterham and executive chairman of AirAsia, relinquished their executive roles on Feb 3 for two months to allow for investigations into the matter.  But they remain as non-executive directors and advisers. – Feb 6, 2020

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