Did Tony Fernandes Just Confess to Bribery?

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Air Asia boss (and Asia’s answer to Richard Branson), Tony Fernandes published a video shortly before the Malaysian elections giving full support for former prime minister, Najib Razak.

I believe the prime minister put people first… 

Tony Fernandes in the pro BN video

With anti Najib sentiments running high, he attracted a lot of flak on social media.

But Tony knew which side his bread was buttered.

Image from Najib Razak’s twitter

There of course is nothing wrong in supporting a politician, even for businessmen. As long as you leave the company out of it.

While Tony uncharacteristically did not wear his red Air Asia cap in the BN video, he spoke of how Air Asia grew with government support. An Air Asia A330-300 plane was repainted in the BN campaign colours. The crew wore BN blue instead of the Air Asia red, drawing protests from the National Union of Flight Attendants. Tony Fernandes accompanied Najib Razak and several government officials on the plane from Kota Kinabalu, Sabah to Kuala Lumpur.

Who paid for the flight and the plane livery?

Tony bet on the wrong horse. For the first time since Independence in 1957, the Malaysian government changed hands to the opposition. A public fed up with the rising costs of living and the corruption scandals that plagued prime minister Najib, voted him and his party out.

Pakatan Harapan (Alliance of Hope) led by Tun Dr Mahathir trounced Najib’s BN at the polls by 113 to 79 seats. Tony removed the photos and endorsement of BN and Najib from his Instagram and Twitter. You can still find the photos on Najib’s twitter.

It was probably a good idea to stay low. Except a young greenhorn MP, Syed Saddiq of Pakatan Harapan tweeted that it was unfair of Tony to be crucified, “he is a hero, not a traitor”.

Social media cast their judgment. Some swore to boycott Air Asia.

It was time for damage control. The stock market would soon open.

Tony has long been PR savvy. On 13 May 2018, He released a video, with a seven minute apology.

I buckled at the crucial moment in our history.

My views are actually the same as your views.

I assume here that “your views” refers to the public values for change, good and fair governance and an end to corruption. Which makes Tony’s actions so ironic.

If his views were the same as ours, then why hide it and instead endorse the corrupt status quo?

I think the government and the prime minster put, not Tony Fernandes first or Air Asia first, not other GLCs, but put the country first and put what would benefit Malaysians the most.

Tony Fernandes in the pro BN video  

I’ve been under pressure many many times before. But I’ve withstood it…. when I fought regulators and government authorities always in the name of trying to get more people to fly.

Tony Fernandes in his apology video  

In his apology, Tony gives two reasons for what he did.

1.The Prime Minister’s Office pressured him to remove Rafidah Aziz from the Board

Rafidah Aziz, fiery ex minister during Tun Mahathir’s premiership openly endorsed Mahathir and Pakatan Harapan during the campaign period. She used to lead UMNO’s women’s wing and was influential among Najib’s grassroots. Rafidah was chairperson of Air Asia X and in her astute commanding way was probably a great asset to the Board.

I was asked to remove her as chairman of Air Asia X. I refused to do so because I thought it was not the right thing to do. I came under intense pressure day by day as Tan Sri Rafidah started getting more and more involved in the campaign. As Tan Sri Rafidah’s impact and popularity grew, the pressure grew exponentially. It was getting harder and harder to resist the pressure from the Prime Minster’s Office. I stood firm. I never even mentioned to Tan Sri Rafidah to step down from the Board of Air Asia X because it just wasn’t the right thing to do.

The same day Tony’s apology video came out, Rafidah released a statement on her Facebook page. After Tony told her about his pressure, she offered to resign, which he refused. He did not tell her the extent of the pressure.

“TONY did NOT have to go to that extent to placate HUMPTY DUMPTY, who after that had a great fall – by The Will of The ALMIGHTY GOD Who opened up the hearts and minds of the Rakyat to change the Nation’s Management Team.

 

BUT TONY DID.

 

Because HE KNEW I was doing the RIGHT THING..and at the same time, HE NEEDED to STOP ‘them’ from tightening further the screws on where it would HURT MOST – AIR ASIA and AAX of which I am Chairman.

 

OF COURSE IF Tony had ‘APOLOGIZED’ to them for ANYTHING at all THEN MY RESIGNATION WOULD HAVE COME WITHIN 10 MINUTES OF THE APOLOGY.

TONY just tried to please and placate .

 

HIS ” mistake” was not telling me . He got a PRIVATE whacking from me already for that. Nothing personal..ONLY for that error in judgement or as I told him his ‘stupidity’.

Tan Sri Rafidah Aziz

2. MAVCOM threatened to cancel flights

While Tony stood firm by his chairman as she continued to campaign for Pakatan Harapan, he “buckled” when the regulator threatened to cancel Air Asia additional flights for voters.

The government set polling on a Wednesday which made it hard for working people to return to their home states to vote. (Note: thanks to intense gerrymandering and malapportionment, urban votes carry much lower weightage than rural votes. for this reason, many chose to keep their voting stations to their original hometowns). It would be harder and expensive for those from East Malaysia, historically BN safe seats, to fly back for one day to vote. Air Asia decided to offer an additional 120 flights (26,000 passengers) at discounted rates.

Unfortunately that put me under more pressure when it was realised by the government that we were ferrying so many voters. Within 24 hours we were summoned by the Malaysian Aviation Commission (MAVCOM) and told to cancel all those flights. That put us under again tremendous pressure.

 

So foolishly, I thought by doing the video, which I felt was fairly neutral and factual, and the plane from Kota Kinabalu would appease the government and protect the job of all stars.

 

Under the intense pressure I buckled. It wasn’t right. I’ll forever regret it. It was a decision made on the spur of the moment to protect that baby [Air Asia]. 

Despite being a Sunday, MAVCOM issued a press release. Within 24 hours: “With reference to Tan Sri Tony Fernandes’ claims in a video dated May 13, 2018, the Malaysian Aviation Commission (MAVCOM) considers these claims serious allegations. We have immediately commenced an investigation into these claims. We will keep members of the public informed.”

Yes, these are serious allegations. It’s called abuse of power. Which leads us to my initial question.

Is this bribery?

Let’s call a spade, a spade. This is corruption. Plain and simple.

A prime minister will do all he can to win the elections. Gerrymandering, pushing through anti-fake news laws and then setting polling day on a Wednesday when it would be hard for people to return to their hometowns and vote. Deputy Home Minister, Nur Jazlan Mohamed criticised Cathay Pacific for removing cancellation penalties for those who needed to change earlier bookings so they could be in Malaysia to vote. Malindo followed. Malaysia Airlines announced additional flights. Air Asia jumped in.

Most Malaysians would assume that MAVCOM would fall under the purview of the Ministry of Transport. So did I. So I had a look at the Malaysian Aviation Commission Act 2015.

The executive chairman is appointed by the PM. The other members are the secretary general of the Ministry of Transport, the director general of the Economic Planning Unit (which falls under the Prime Minister’s Department) and between four to six members appointed by the minister of transport after consultation with the PM. These members cannot hold any other office or be employed without the PM’s prior written approval. The PM is also able to appoint alternate members if any member cannot attend a meeting. The PM gets to decide the remuneration and allowances of the Executive Chairman and the members. The PM can fire them too. If the Commission had the full set of nine members, eight are determined by the PM.

It is not clear to me the actual extent of MAVCOM’s powers over Air Asia. Malaysian aviation insiders would understand this better. Whether or not MAVCOM had these powers, it was clearly under the control of the prime minister.

Offence of using office or position for gratification

23. (1) Any officer of a public body who uses his office or position for any gratification, whether for himself, his relative or associate, commits an offence.

Section 23 of the Malaysian Anti-Corruption Commission Act

What happens when a regulator intimidates or threatens a business?

In an ideal world, a business can report the abuse to an oversight committee, the police or other enforcers. But in Malaysia and in light of the 1MDB corruption scandal, it was clear that the police and the MACC were under the sway of the prime minister.

So Tony had nowhere he could report the abuse to. Neither could any other corporate figure under similar circumstances. Of course there was a choice. Stick to one’s principles but lose business, perhaps at the expense of employees.

When business leaders have to make tough choices between doing the right thing and hurting their business and employees, something is very wrong. We should never put businesses in this position in the first place.

I have worked for multinationals who are highly aware of the US Foreign Corrupt Practices Act. Paying for government officials flights could violate the FCPA (let alone paint an entire plane a party’s colours). But multinationals can make a choice. Saying no will not shut down their company. At the very worst, they lose contracts or licences and leave the country.

Air Asia is a Malaysian company. Where would it go? Indonesia perhaps.

A corrupt government makes it very hard for its home grown businesses to grow and stay clean. I am sure there are those who have, but they face an uphill battle. They watch as their lesser qualified competitors win bids or get approvals in record time. It’s an unfair playing field. The pressure to yield is immense.

Government servants too feel the pressure from their political masters when it come to favouring certain companies. I have had conversations with capable but weary civil servants who end up sidelined for their integrity.

We can criticise Tony Fernandes all we like for buckling. But the truth is, the environment forces those tough choices, and that’s what needs fixing.

Tony may not have realised that he has confessed to a wrongdoing.

Bribery of officer of public body  

S21: Any person who offers to an officer of any public body, or being an officer of any public body solicits or accepts, any gratification as an inducement or a reward for—

(b) the officer performing or abstaining from performing or aiding in procuring, expediting, delaying, hindering or preventing the performance of, any official act;

commits an offence…

Section 21 of the Malaysian Anti-Corruption Commission Act

He admitted to providing a BN decorated plane, flying the then care taker prime minister and endorsing his political party in order to prevent the cancellation of the additional flights.

Admissions Are Easier

Jurisdictions like the US and UK handle admissions in a lighter way. They are interested in the long term battle of fighting corruption by bringing it out in the open. The US Department of Justice (DOJ) uses deferred protection agreements (DPAs) where companies agree to a settlement and allow investigators access to their evidence. The full truth may not emerge in a traditional prosecution as companies hide behind lawyers and legal privilege. DPAs enable the DOJ to determine specific individuals at fault as well as discover the deeper causes.

In this case, Tony Fernandes has explained the reasons for his actions. Wrongdoing does not happen in a vacuum. The environment (political interference in business and a lack of independent oversight) did not give him many options.

There needs to be an investigation into who communicated the “threats”, and how and why they were conveyed. While MAVCOM have indicated they will investigate, they are an interested party, and under the law, controlled by the prime minister. MACC (with a new regime) would be more independent. The laws governing MAVCOM and other commissions need to be reviewed to ensure greater independence.

An Amnesty for the Past?

Whatever MACC’s findings, I would not advocate charging Tony Fernandes. I doubt he is alone in buckling under political pressure. What of senior leaders in GLCs and other businesses? Perhaps we should encourage them to come forward and share their stories. How about the new government setting an amnesty period: Tell us/MACC in the first 100 days and you won’t be charged. However if we find out without you coming forward, you face the full consequences of the law.

Do you have a Speak Up Story you wish to share? Share your Story here.

This enables corrupt practices to surface. Some of it will be pretty nasty, but this is a new slate and sets the tone moving forward. There will be no more political interference within regulators. If any government officials or politicians ask for bribes (including through agents), take action.

Wrongdoing Comes to Light with Regime Change

We would never have known this if BN had won the elections. The only reason Tony could admit his mistake was because it was safe to do so (and he was thinking of Air Asia’s reputation). Just as Tesco’s ex CEO Philip Clarke resignation in 2014 enabled Tesco accountants to inform the new CEO, Dave Lewis that they had been falsifying accounts to make it appear that Tesco was meeting the Clarke’s revenue targets.

Likewise, Malaysia has a new CEO. Those who had caved in under pressure of the old CEO must come forward.

It is safe now for others to speak up and share their stories. We should listen, not to judge them, but rather to understand the circumstances and human behaviour which enable corruption like a silent malignant cancer.

Unbelievable as it is, it is harder for senior people to speak up. The stakes are higher. The cynical side of us will remark that they will lose their bonuses or big salaries. Sometimes it’s about keeping a company afloat so employees can feed their families. Keppel thought it was ok to bribe Petrobras to ensure their shipyard in Brazil had work. DOJ slapped them with a $423 million penalty.

Those who would rather lose their job than sacrifice integrity

I know people in Malaysia and overseas who chose integrity knowing they may lose their job, or resigned for refusing to take the decision which went against their values. The more senior people who take this stand, the more integrity we inject into the system.

I don’t care about politics. I don’t care about expediency. I don’t care about friendship. I care about doing the right thing. And I would never be part of something that I believe to be fundamentally wrong. I mean, obviously we all make policy judgements where people disagree, but I will do the right thing.

James Comey on how he would handle conflict with the White House when appointed deputy attorney general under Bush’s administration.  A Higher Loyalty , James Comey

James Comey, as acting attorney general and Bob Muller, as head of the FBI had resignation letters ready in 2004 because the Bush administration were about to extend an NSA surveillance programme which in their view was unlawful. In the end they were able to persuade the president to accept their amendments. They had been under tremendous pressure to ignore the illegalities but had stood their ground.

Fast forward to 2018 and a nation’s future depends on their integrity.

2018 and Malaysia’s future depends on the integrity of government officials and corporate leaders.

 

Animah Kosai, a former lawyer in the oil and gas industry formed Speak Up to support organisations in enabling their employees to speak up on wrongdoing. She also writes and speaks on corporate whistleblowing, harassment and sexual harassment. See www.speakupatwork.com. Follow Animah on LinkedInTwitter and Facebook.

Featured image is courtesy of The Star

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