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Swamy drags AirAsia to court

New Delhi, Sep 19 (): AirAsia’s deal to invest in a new airline with Indian partners Tata Sons and Telstra Tradeplace Pvt Ltd through the FDI route is in violation of the rules and Foreign Investment Promotion Board (FIPB) clearing it despite objection from civil aviation should be cancelled, said Subramanian Swamy in a petition before the Delhi High Court.

The court admitted Swamy’s petition and has asked the government to file a reply within four weeks. The petitioner said the government overlooked issues related to foreign control. The Union Government, civil aviation ministry, FIPB and Commerce ministry are respondents.

The new company has Malaysia’s entity holding a 49 % stake, Indian partners Tata Sons with 30%, and Arun Bhatia Telstra with 21%. FDI rules say that irrespective of the stake by foreign investors, the control should be with Indian partners. Swamy says that FDI in aviation is for existing airlines and not for starting a fresh one. He wants the FIPB officials who cleared it be booked under corruption act.

Swamy’s request to stay the AirAsia India’s application before the civil aviation ministry was not granted.

AirAsia termed the PIL as motivated and premature since no clearance was granted and the aim was to make the deal look shady. The motivation angle stems from the low cost IndiGo and Kingfisher who wanted the Federation of Indian Airlines to take up a similar charge with civil aviation.

SpiceJet and Jet Airways did not support it. The longer the entry of AirAsia gets delayed, the operational airlines will benefit. Swamy had blown open the 2G spectrum and raised doubts on Jet- Etihad deal.

Some wings of the Government misinterpreted the FDI policy to allow investments in new airlines. He said that 51% is divided between two Indian investors while the Malaysian partner single-handedly holds 49%. The agreement is also silent on many mandatory requirements.

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