AAX forms board committee as worries heighten over scandal

The committee will review the allegations related to AAX and take any necessary action based on the review

by NUR HANANI AZMAN / pic by BLOOMBERG

THE board of directors of AirAsia X Bhd (AAX) has formed a board committee comprising non-executive members, with the exception of Datuk Kamarudin Meranun and Tan Sri Dr Tony Fernandes (picture).

The company said the committee will review the allegations related to AAX and take any necessary action based on the review, which includes the appointment of an independent expert.

“An updated announcement will be made upon the finalisation of the said appointment. All matters in relation to this review will be managed and handled by the committee,” AAX told the stock exchange.

AXX was mentioned in the approved judgement and statement of facts in relation to Regina v Airbus SE dated Jan 31, 2020.

AAX’s sister company AirAsia Group Bhd has also been implicated in the bribery allegation scandal.

The bribery allegation has hit AirAsia hard. The low-cost carrier already saw about RM1.54 billion of its market capitalisation erased and its co-founders taking a garden leave from their executive positions for two months.

The heavy selling witnessed since Monday came to a halt yesterday after the counter rose one sen to RM1.16 with 192.5 million shares transacted.

AAX’s share price also rose one sen or 4.35% to 0.12 sen with 33.9 million shares traded. AirAsia was valued at RM3.88 billion, while its sister, the long-haul company stood at RM518.52 million as at yesterday.

Future negative outcomes following investigations by the Malaysian Anti-Corruption Commission (MACC) are expected to hurt AirAsia’s share price even more.

The aviation consultancy Endau Analytics head of Malaysia Shukor Yusof said the allegations made by the UK Serious Fraud Office are very serious and they are reflected by investors who have dumped the stock.

“We have to wait and see what MACC and Malaysian Aviation Commission do. Anything negative is likely to hurt its market capitalisation.

“There is a possibility that the share price will lose more. But it is not only due to the scandal. Airline shares are being unwound due to the coronavirus outbreak,” he told The Malaysian Reserve (TMR).

Kamarudin’s and Fernandes’ decision to temporarily step down from their executive roles did little to boost investors’ confidence which has been shaken by the coronavirus outbreak. The outbreak which started in Wuhan, China, has already cost global carriers huge losses.

TA Securities Holdings Bhd senior analyst Tan Kam Meng said the probe against the two executives is a big negative surprise. He also advised investors to sell as the impact on AirAsia will be more serious if criminal charges are levelled by the authorities.

“I think this is just the first wave. The next would be the investigation outcome from MACC. It can be positive or negative depending on the outcome of whether Tony (Fernandes) will be charged,” he told TMR, adding that it would also determine his position and shareholding in the airline.