In his writ petition, Swamy has argued that the FIPB approval granted to AirAsia was in violation of FDI policy.
Air Asia (India) Pvt is a joint venture between the Malaysian company, AirAsia Investment Ltd (AAIL), Tata Sons Ltd and Telestra Tradeplace Private Limited.
Swamy has contended that it violates the FDI policy, as neither of the Indian companies is a domestic airline operator and FDI is not allowed in “greenfield” companies.
The Memorandum of Agreement between these companies envisaged execution of “definitive documents” like Shareholders agreements and Share Purchase Agreements subsequent to the grant of FIPB approval.
The effect of this was that the “substantial ownership and effective control” of the JV company could not be ascertained while granting the approval, Swamy has submitted.
He has also raised the issue that Telestra might be the benamidar of AAIL thereby giving AAIL an effective shareholding way above the sectoral cap of 49%.
Source: Barandbench
