Report: Tata Sons plans to raise stake in AirAsia India
PETALING JAYA: Indian conglomerate Tata Sons is reportedly planning to raise its stake in AirAsia India to become the controlling shareholder in the budget carrier.
According to The Times of India, Tata Sons is looking to buy an additional 2% stake in AirAsia India to raise its interest to 51% as part of a clean-up and consolidation exercise act.
“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,” the The Times of India reported.
“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,” it added.
Quoting sources directly aware of the matter, The Times of India said Tata Sons could emerge as the controlling shareholder in AirAsia India by buying the stakes owned by the airline’s chairman S. Ramadorai and non-executive director R. Venkataramanan.
Ramadorai and Venkataramanan respectively own a 0.5% and 1.5% stake in AirAsia India.
AirAsia Group Bhd (AAGB) remaining 49% in AirAsia India.
According to the report, the board of Tata owns the Sons had discussed about buying Ramadorai and Venkataramanan’s stakes in AirAsia India, but no deadline has been set to close the transaction.
The Times of India noted that Tata Sons spokesperson had declined to comment on the story, while Ramadorai and Venkataramanan did not respond to text messages and e-mails.
AAGB had declined comment when contacted.
It was reported that Ramadorai and Venkataramanan had acquired their stakes in AirAsia India from businessman Arun Bhatia in March 2016.
India’s Central Bureau of Investigation had named Venkataramanan and AirAsia India early this year in a corruption case for allegedly breaking rules in obtaining a flying licence. Both had since refuted allegations of wrongdoing.
Separately, since the resignation of Amar Abrol, AirAsia India has been without a CEO for the last four months.
It was reported that AirAsia Malaysia group CEO Tan Sri Tony Fernandes has been the one selecting the CEO for AirAsia India since the latter started in 2013.
Before Amar, Fernandes named Mittu Chandilya as the head of AirAsia India.