New Delhi, July 26 () : AirAsia’s joint venture with Tata Sons Ltd and Arun Bhatia of Telestra Trade Place Pvt Ltd clearance by Foreign Investment Promotion Board (FIPB) is to be challenged by Janata Party President Dr. Subramanian Swamy in the Supreme Court. The case will come up for hearing on Monday.
Swamy states that the FDI norms have been for those airlines already in operation and not for new ventures. The civil aviation ministry had taken this stance but the commerce and industry ministry put pressure to clear the investment. The civil aviation Minister had stated that more clarity was needed on the FDI rules about the new venture and later backtracked.
Swami points out yet another anomaly. The effective control has to be with an Indian. Here the Indian part is Tata and Bhatia. Tata has only 30% share and similarly Bhatia has 20%. Bhatia has business links with AirAsia’s Tony Fernandes and when it comes to voting, they can collude, says Swamy.
FIPB had on March 7 cleared AirAsia’s JV proposal to launch a domestic airline in India. Later, Ratan Tata and Tony Fernandes met Ajit Singh and applied for NOC. They gave the list of top management personnel to Home Ministry for security clearance.
After the clearance, the aviation ministry will give the permit to fly. The FIPB on the Commerce ministry interpretation of FDI rules passed in Parliament cleared it on a use of a comma in a paragraph that gave even new ventures eligible for foreign investment. The FDI document will now be open to SC interpretation.
AirAsia parted ways with All Nippon in its Japanese operations. It had to terminate the JV within a year of operation from Narita airport in Tokyo. The airlines planned to cease flying from Japan in October. However, in a new move Feranandes has indicated that he could be in business with a new partner.