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AirAsia Money Laundering Case: ED Collects FDI Approval Documents From Commerce Ministry

AirAsia money laundering case: ED investigators collected up a number of documents last week from the as part of the investigation

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AirAsia Money Laundering Case: ED Collects FDI Approval Documents From Commerce Ministry

AirAsia, being a Malaysian airline, needed FDI approvals to launch airline in India

The enforcement directorate (ED) has collected documents from the commerce and industry ministry's department of industrial policy and promotion (DIPP) relating to FDI clearances. A senior official told Press Trust of India that ED investigators collected up a number of documents last week from the Department of Industrial Policy and Promotion (DIPP) as part of the investigation. The DIPP deals with rules and norms pertaining to foreign direct investment (FDI). Air Asia being a Malaysian airline needed FDI approvals from the then FIPB board to launch airline in India .The files collected by the enforcement directorate relate to the same approvals granted to the air carrier that allowed it to fly in Indian skies.

Allegations of FDI through corrupt means: There are essentially two allegations against Air Asia. The first is that the Malaysian air carrier got licence to fly in India by seeking FDI permission through corrupt means. ED said it will go into the money trail of the accused and the entire deal and a joint probe by the CBI and ED is expected to go forward in the case.

Bypassing 5/20 rule: The second allegation pertains to seeking international licence to fly abroad by lobbying for change in government policies. The Air Asia director Venkataramanan allegedly lobbied in the government to secure mandatory approvals, and the attempt for removal or modification of 5/20 rule. The 5/20 rule implied that to be able to fly abroad, the airlines must be operational for five years and have a fleet of 20 aircraft as per the 5/20 rule.

Case filed by CBI: The CBI, in its criminal FIR, had booked Group CEO of Air Asia Tony Fernandes, Tharumalingam Kanagalingam also known as Bo Lingam, former Deputy Group CEO of Malaysia-based Air Asia Berhad, and R Venkataramanan, Director Air Asia India Ltd, Bengaluru, besides companies Air Asia India Pvt Ltd and Air Asia Berhad. The CBI filed case under various provisions of Indian Penal Code and the Prevention of Corruption Act. (Also Read: CBI Questions Businessman Sunil Kapur In Air Asia Probe)

According to the CBI, the Malaysia-headquartered AirAsia got approvals from the finance ministry's foreign investment board February in 2013 and received the air operating permit in May 2014. The CBI is probing the role of two UPA ministers in the AirAsia case.

ED files a case: Following CBI's FIR, the enforcement directorate (ED) also pressed sections of the Prevention of Money Laundering Act (PMLA) to probe if alleged tainted funds were used to create illegal assets and it has taken cognisance of the CBI FIR to lodge its own case.

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Cyrus Mistry allegations: The ED's Mumbai office has been probing a separate case against the AirAsia and its executives under the Foreign Exchange Management Act (FEMA). This probe in the case, registered last year, was initiated on the basis of the claims of ousted Tata Group chairman Cyrus Mistry's allegation that fraudulent transactions of Rs 22 crore, involving non-existent entities in India and Singapore, were carried out in an instance involving the airline.

AirAsia denies charges: Air Asia had denied any wrongdoing after the CBI filed the case and carried out raids at multiple premises. It is alleged that Air Asia India Ltd -- a joint venture between Tata sons and Malaysian company Air Asia Berhad -- was indirectly controlled and operated by the Malaysia group and particularly Air Asia, Berhad violating various existing norms of erstwhile FIPB, now defunct. (With PTI inputs)

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