MUMBAI:
Tata Sons may emerge as the controlling shareholder in
AirAsia India by acquiring stakes held by airline’s chairman
S Ramadorai and non-executive director
R Venkataramanan, people directly aware of the matter said. The share purchase from the two board members comes at a time when the low-cost airline joint venture is plagued by rule-rigging allegations and senior management exits.
Tata Sons, the holding company of the $103-billion Tata Group helmed by N Chandrasekaran, is likely to snap up the shares as part of a clean-up and consolidation act. Ramadorai, former TCS CEO, owns 0.5 per cent in the no-frills carrier, while Venkataramanan, CEO of
Tata Trusts, holds 1.5 per cent. The transaction, when done, will make Tata Sons the largest shareholder of the low-cost airline, increasing its stake from 49 per cent to 51 per cent. The remaining 49 per cent is held by Malaysia’s AirAsia.
In March 2016, Ramadorai and Venkataramanan had acquired AirAsia India shares from businessman Arun Bhatia, whose son is married to steel tycoon L N Mittal’s daughter.
The proposed stake-buy will tighten Tata Sons’ grip over the four-year-old AirAsia India and will reaffirm its commitment to the aviation business. Earlier this year, Venkataramanan, along with AirAsia India, was named in a corruption case by CBI for allegedly breaking rules in obtaining a flying licence. Both Venkataramanan and AirAsia India had refuted the investigative agency’s allegations of wrongdoing.
The board of Tata Sons had discussed acquiring Ramadorai and Venkataramanan’s stakes in AirAsia India, but no deadline has been set to close the transaction, said one of the persons. A Tata Sons spokesperson declined to comment on the story, while Ramadorai and Venkataramanan didn’t respond to text messages and e-mails.
The rule-rigging allegations, along with other issues like losses and vacuum at the top level, have derailed AirAsia India’s plans to launch international flights and an initial public offering. In January, AirAsia Malaysia’s CEO Tony Fernandes had said that it plans to take the joint venture public. The low-cost airline has 16 planes and according to rules, a domestic carrier can start flying overseas once it has 20 aircraft.
AirAsia India has been without a CEO for the last four months after Amar Abrol quit, citing personal reasons. Since it started operations, AirAsia Malaysia has been choosing the CEO for the joint venture. Before Abrol, Fernandes had hand-picked Mittu Chandilya to pilot AirAsia India. Besides AirAsia India, Tata Sons has interests in Vistara where it holds 51 per cent. Vistara, which began operations in 2015, is expected to fly international this winter.
