India police investigate AirAsia boss Tony Fernandes

Photo of AirAsia's CEO Tony Fernandes taken in March 2015. (Photo: AFP/Peter Parks)

The Central Bureau of Investigation (CBI) said it was probing allegations that Fernandes lobbied Indian officials for favourable treatment regarding licences for his low-cost carrier.

"We have filed a case against Air Asia chief Tony Fernandes, his colleagues and government officers over procuring licences illegally," CBI official R.K. Gaur told AFP.

Officers had raided AirAsia offices in major Indian cities as part of its investigation, he added.

Fernandes was accused by investigators of campaigning to have aviation regulations relaxed in his favour, the Press Trust of India (PTI) reported.

One of these was the so-called 5/20 rule stipulating that companies must have five years of domestic experience and a fleet of 20 aircraft before being eligible to operate abroad.

Besides Fernandes, investigators also named an AirAsia director, an aviation consultant and unidentified Indian government officials in its preliminary case, PTI reported.

AirAsia and its local joint venture partner Tata Sons launched domestic flight operations in India in 2014 by offering eye-catching promotional fares to lure budget travellers.

Fernandes, a millionaire ex-music executive, has styled himself as Asia's answer to British tycoon Richard Branson.

The company ran into trouble this month when Air Asia India's CEO Amar Abrol stepped down, citing personal reasons.

The no-frills airline currently operates flights from its bases in Bengaluru and Delhi to several cities including Goa, Jaipur and Kochi.

Bloomberg, citing the company’s India unit director Shuva Mandal, said Air Asia denied any wrongdoing and is cooperating with authorities.

In an emailed statement the company said it began criminal and civil proceedings against a former chief executive officer in 2016 and hopes to bring an “early resolution to all such issues,” according to Bloomberg.

Shares of AirAsia Group Bhd fell as much as 4.2 per cent early on Wednesday. Malaysia's wider market was down 1.9 per cent.