AirAsia threatens suit, gives MalaysiaNow 48 hours to retract report on half-a-billion ringgit govt loan

Budget airline AirAsia has threatened a defamation suit against MalaysiaNow over a report surrounding a loan of some half a billion ringgit received under a government loan scheme.

AirAsia Group Bhd, which recently changed its name to Capital A Bhd, claimed the article “Questions raised over half-a-billion ringgit govt loan for troubled AirAsia” was “bereft of the truth, vexatious, spurious and completely unwarranted”.

The article published on Jan 24 concerns the approval of a RM500 million loan from Danajamin Nasional Bhd, a financial guarantee insurer under the finance ministry-owned Bank Pembangunan Malaysia.

“Our client takes the position that the impugned publication had been made in bad faith and is calcultaed to cause damage and/or to injure the trading reputation and/or goodwill of our client and further exposes our client to public odium, ridicule and scandal,” the legal firm representing the airline, Steven Thiru & Sudhar, said in the letter delivered to MalaysiaNow’s office in Petaling Jaya.

The letter, addressed to MalaysiaNow editor Abdar Rahman Koya and writer Azzman Abdul Jamal, gave the portal 48 hours to remove the article, issue an “unequivocal apology” and offer monetary compensation for “loss and damage” to the airline’s reputation.

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The report had highlighted concerns over the approval of the half-a-billion ringgit facility for AirAsia in view of its PN17 company status by Bursa Malaysia over its financial health.

But AirAsia said the PN17 status was “immaterial” and “irrelevant” in allowing it to obtain financial loans and assistance.

“Notwithstanding our client’s PN17 status, our client was still able to fulfil the eligibility criteria for the Danajamin Scheme loan and was successful in its application,” said AirAsia’s lawyers.

The letter said AirAsia has “strong fundamentals”, adding that its “Super App” is recognised by Credit Suisse as “one of three Asean Unicorns based in Malaysia”.

It further said MalaysiaNow had failed to consider that AirAsia has been a “key driver and catalyst for economic growth in Malaysia”.

“Therefore, it is reasonable and appropriate for the government of Malaysia to step in, if it wishes to, to assist our client in light of the impact that the Covid-19 pandemic has caused to our client’s business,” it said, adding that the Danajamin loan was obtained “purely on merit”.

Announcing its name change to Capital A late last month, AirAsia Group CEO Tony Fernandes had brushed aside the PN17 status, describing it as an “accounting issue”.

“PN17 was caused by a lease which we never paid, so it shouldn’t be in the profits and losses.

“It’s related to accounting and structuring, which mentions the consolidation of a RM5 billion deficit. If you remove these two factors, we would not be classified as PN17,” Fernandes had said.

AirAsia’s expansion plans come as the airline faces criticism from customers for its decision not to refund them over flights cancelled due to the pandemic.

Instead, the company said it would dish out credit to tens of thousands of affected passengers.

Last year, Fernandes assured passengers that they would be refunded despite the company’s cash problems.

“You will get yours, please be patient,” the company had said in a post alongside Fernandes’ video message in April last year.

“AirAsia X is in deep, deep financial difficulty because it just hasn’t been able to fly anywhere. Plus it has had to deal with very unfair competition over the many years,” he added.