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Colombia’s Avianca embroiled in Airbus bribery scandal

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An executive of Colombia’s largest airliner Avianca sought at least $4 million in bribes to secure the purchase of 100 aircraft from Airbus, according to French authorities.

The European aircraft manufacturer agreed to pay a $3.9 billion fine to French, British and American authorities after admitting to bribery practices throughout the world between 2004 and 2016.

“The largest single order ever made in Latin America’s aviation history”

One of these bribes was agreed with “Y,” a senior executive of Avianca’s mother companies Avianca Holdings and the Synergy Group of controversial businessman German Efromovich, Airbus’ General Councel John Harrisson admitted.

French anti-corruption agency AFA said that this bribe was agreed ahead of the sale of 100 so-called A320neo aircraft in April 2015.

The deal that at the time was hailed as “the largest single order ever made in Latin America’s aviation history” followed a bribery deal between Airbus’ international strategy and marketing branch, SMO International, with Y, the AFA found.

The investigation revealed that from the end of 2013 it was envisaged that part of the remuneration meant for the commercial intermediary… would secretly be transferred to a senior executive of Avianca Holdings. The latter was a key intermediary for Airbus in the ongoing commercial negotiations between Avianca and Airbus on the sale of A320neo aircraft.

French Anti-Corruption Agency

The bribes agreed with “Y”

Airbus admitted it began coveting a senior executive of Avianca Holdings and the Synergy Group in 2013.

This executive should be granted “AAA treatment because we are campaigning with Avianca/Synergy,” the investigators found in a November 2013 email.

In October 2014, “the senior executive of Avianca Holdings had requested a commission for his role in supporting the ongoing A320neo sales campaign to Avianca,” Airbus admitted to the authorities.

This commission to Y would be deducted from the commission of Airbus’ sales intermediary in Colombia, a company executive referred to as X decided, another anonymous Airbus executive wrote SMO International in November that year.

“What (X) said is that instead of the previous 20 we make 15, of which 5 for (Y). And, for the new contract, 4 for (Y) and 2 for the other.”

Anonymous Airbus executive

“This Airbus manager later confirmed that the figures referred to in this e-mail were “millions” [of euros] and that they concerned a payment being negotiated with the sales intermediary, part of which was to be paid to the Avianca Holdings executive,” the AFA said.

Y never got the money he was promised as Airbus in 2014  froze payments to “Z,” the Colombian sales intermediary it had worked with since 2006.

Airbus reported the bribery practices to British and French authorities in 2016 after an internal investigation ended the entire bribery scheme between SMO International, referred to as XX, and its partners in Colombia.

You can tell (XX) that (Z) has not met his commitments to (Y) and the others!!! This resulted in an extremely difficult negotiation for our last operation.

Anonymous Airbus executive

All quiet in Colombia

Airbus’ $3.9 billion fine dwarfs the $2.6 billion fine slapped on Brazilian engineering firm Odebrecht for its bribery practices in, among other countries, Colombia.

Despite Avianca’s alleged involvement in one of the biggest bribery scandals of the century, the Prosecutor General’s Office announced no criminal investigation.

Avianca, which is already embroiled in a corporate spying scandal, also remained quiet.


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E não só a Avianca Holdings, presidente e o CEO Tony Fernandes da Air Asia Group também estão sendo acusados:

AirAsia CEO steps aside for 2 months amid bribery allegations
Airbus payoff accusations cloud outlook for SE Asia's biggest discount carrier

TAKASHI NAKANO, Nikkei staff writer
FEBRUARY 04, 2020 17:40 JST

SINGAPORE -- Allegations that European aircraft maker Airbus Group paid tens of millions of dollars in kickbacks to AirAsia's top executives have rattled Southeast Asia's largest discount airline.

CEO Tony Fernandes and Kamarudin Meranun, chairman of the Malaysian discount carrier, on Monday said they will suspend themselves for the next two months, effective immediately.

The two executives are temporarily stepping down to cooperate with efforts inside and outside the company to look into allegations that they received payments worth $50 million from Airbus.

Fernandes and Meranun strongly denied any role in the alleged payoffs." We categorically deny any and all allegations of wrongdoing or misconduct on our part as directors of AirAsia," the pair said in a joint statement. Authorities in Europe and Malaysia continue to investigate the case.

Tharumalingam Kanagalingam was appointed acting CEO on Monday. Fernandes and Kamarudin will stay on as advisers during their suspensions.

In a document released in late January, the U.K.'s Serious Fraud Office said a sports team owned by the two AirAsia executives had received payments totaling $50 million from Airbus Group between October 2013 and January 2015.

In addition to the troubles the airline faces over the alleged kickbacks, the coronavirus outbreak threatens to dent its revenue. The suspension of Fernandes and Kamarudin, two of AirAsia founders, further clouds the company's outlook.

On Monday, AirAsia shares fell more than 10% from last Friday's close as the market reacted to the bribery scandal.


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