Court asks govt to reply on AirAsia-Tata airline within 4 weeks
Delhi HC admits Subramanian Swamy’s petition seeking to quash AirAsia India clearance to start an airline
First Published: Wed, Sep 18 2013. 01 28 PM IST
Foreign investments in airlines were meant to be allowed for existing airlines and not start-ups such as AirAsia India, says Subaramanian Swamy. Photo: AFP
New Delhi: The Delhi high court on Wednesday admitted a petition by Bharatiya Janata Party (BJP) leader Subramanian Swamy seeking the quashing of the clearance granted to AirAsia India Pvt. Ltd to start an airline, saying the government had overlooked several issues related to foreign control and policy in granting it.
The court has given the government four weeks to respond to the petition.
“It’s a illegal project. Not only I want the court to quash it but also the officers who passed it in FIPB (Foreign Investment Promotion Board), overruling ministry of aviation—they should be prosecuted under the corruption act,” Swamy said in an interview after the case was admitted in court.
AirAsia India is a new airline company in which Malaysia’s AirAsia Bhd has a 49% stake, Tata Sons has 30%, and Arun Bhatia’s Telestra Tradeplace Pvt. Ltd owns the rest.
Swamy said foreign investments in airlines were meant to be allowed for existing airlines and not start-ups such as AirAsia India. “They have no business to be there. In four weeks, all the four respondents must file why they kept quiet on this illegality.”
The four respondents are AirAsia, Indian finance ministry, aviation ministry and commerce ministry.
Swamy’s previous allegations against the government on alleged irregularities in the allotment of spectrum to telcos and in the deal between Jet Airways (India) Ltd and Etihad Airways PJSC have blown up into controversies that continue to embarrass the ruling Congress party.
In the AirAsia case, Swamy says the government’s clearance to AirAsia India is in violation of a September policy that allowed foreign airlines to invest in Indian airlines.
At the time, this was interpreted to mean that the investment would be in existing Indian airlines, which later was clarified by some arms of the government to include both existing and new airlines.
In the petition, Swamy has asked the court to prohibit the government “from taking any action contrary to the applicable FDI (foreign direct investment) policy as per Press Note No. 6 of 2012 read with DGCA Guidelines dated 01.03.2013 or from granting any approval for foreign investment by a foreign airlines in a greenfield airline project”.
In any investment in an Indian airline by a foreign carrier, control has to remain with Indian nationals, Swamy said.
In AirAsia’s case, however, the Indian owners Tata and Telestra are bound by clauses in their agreements that would leave control with Malaysia’s AirAsia, he said.
“Malaysia was ‘silent’ in respect of details that were otherwise mandatorily required to be examined and considered by the approving authority,” he said, referring to the agreement presented by AirAsia India to FIPB.
Swamy said it was “amply clear from the construct of the shareholder’s arrangements” that while the majority shareholding of 51% is divided between Tata Sons and Telestra, the effective control lies with the foreign investor.