Former AirAsia CEO Chandilya files petition against company's civil suit

Lawyers representing Mittu Chandilya, former CEO of AirAsia India, have filed a petition seeking rejection of the company’s civil suit against its ex-employee. 

The petition, filed in Bengaluru’s civil court, has questioned the maintainability of the Deloitte forensic report — on the basis of which the civil suit was initiated — without permission of the company tribunal as per Section 131 of the Companies Act. “Our plea for rejecting the suit for recovery of the money has been admitted and AirAsia India has been asked to respond by June 27,” said Srinivas Mohanty, Chandilya’s advocate. AirAsia India said it would not comment as the matter is sub judice. 

The petition has pointed out that the “action of engaging the paid auditor (Deloitte) is not qualified by law, nor is it permitted so far as the permission to engage is not accorded by the Registrar of Companies or the Tribunal as the case may be within the framework of the Companies Act 2013”. Under Section 131 of the Companies Act, any change in the audited financial statements, which has already been approved by the board, can be undertaken after obtai - ning approval of the tribunal and after the order is filed with the registrar of companies. Mohanty said this process was not followed.

A query sent to Deloitte did not elicit any response. 

The allegation that Chandilya was involved in fraudulent transactions of Rs 220 million during his tenure was based on the audit report. According to Mohanty, these transactions were made after written instructions from Tony Fernandes, the promoter of AirAsia group. Chandilya's appointment letter had a clause under which he could be terminated in case of any misconduct but only “after due inquiry”, according to the lawyer. 

No such process was followed despite Chandilya being entitled for a minimum protection under “natural justice”, he said. Mohanty has also said in his submission that Chandilya, who joined as CEO on May 1, 2013, for a stint of three years, expressed his concern in August 2015 over remaining the CEO on account of “capital invisibility, non amendment of shareholders agreement and brand licence agreement and conflicts amongst shareholders”.

 He made his expression of interest to leave the company by December 2015 and finally left in March 2016. Although the company on a suo moto basis said it was pleased to utilize his services for another term as a consultant, Chan - dilya was firm about leaving the organisation, according to the lawyer.