PAC chief blames Khazanah for lack of oversight in MAS-AirAsia deal gone wrong

BY RANJIT SINGH
SEPTEMBER 09, 2013
LATEST UPDATE: SEPTEMBER 09, 2013 12:32 PM

Public Accounts Committee (PAC) chairman Datuk Nur Jazlan Mohamed (pic) today reprimanded Khazanah Nasional for its role in the Malaysian Airlines-AirAsia share swap deal which resulted in both carriers being fined RM10 million each by the Malaysian Competition Commission (MyCC) last week.

In a statement today, Nur Jazlan said that Khazanah and other government-linked companies (GLCs) could not rely solely on consultants for advise. He said the consultants were only motivated by profits and had at times overlooked the laws governing a transaction.

readmore: www.themalaysianinsider.com/malaysia/article/pac-chief-blames-khazanah-for-lack-of-oversight-in-mas-airasia-deal-gone-wr

06 September 2013| last updated at 07:48PM

MAS, AirAsia fined for RM10mil each

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KUALA LUMPUR – Malaysian authorities on Friday fined Malaysia Airlines and AirAsia for anti-competitive conduct during a short-lived tie-up.

The Malaysia Competition Commission (MyCC) said in a statement that the  country’s two dominant carriers would each have to pay a RM10 million (US$3 million) penalty for collaborating to integrate some routes in which they had  earlier competed.

“When businesses agree to share markets, they are agreeing to stop  competing, at the expense of the consumers,” said commission chairman Siti  Norma Yaakob.

AirAsia, the region’s largest budget airline, agreed in August 2011 to hand  over a 10 percent holding to a state investment fund in exchange for a 20.5  percent stake in the ailing flag-carrier Malaysia Airlines.

The deal was aimed in part at eliminating mutually harmful competition on  some routes.

But it was unwound just eight months later following pressure from Malaysia  Airlines’ powerful employees union, which feared it could result in possible  job losses and other cost-cutting at the national carrier.

Both airlines recorded profits in the second half of 2012. Malaysia  Airlines, however, has been in the red this year while AirAsia has seen sharply  lower profits.

MyCC said the penalties were decided based on revenue earned between  January to April 2012 on four routes and that it equalled less than 10 percent  of their respective worldwide turnovers.

Both parties have 30 days to respond to the decision. — AFP

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