AirAsia Group’s Chief Executive Officer Tony Fernandes and Chairman Kamarudin Meranun have announced that they will step down for at least two months while the company and authorities carry out an investigation into alleged bribery.

These changes will take place immediately with Tharumalingam Kanagalingam, a veteran company executive, stepping in as acting-CEO.

Britain’s Serious Fraud Office (SFO) has alleged that the French planemaker Airbus paid a $50m (£38m, €45m) bribe in order to win plane orders from Asia’s largest budget airline.

Specifically, the SFO outlined that in 2012 Airbus’s parent company EADS sponsored the F1 team Caterham, which was jointly owned by Fernandes and Kamarudin. In documents seen by the SFO EADS allegedly described the owners as AirAsia Executive 1 and AirAsia Executive 2.

In a joint statement both executives denied any allegations of wrongdoing or misconduct, stating: “We would not harm the very companies that we spent our entire lives building up to their present global status.” The allegations first emerged as part of a record $4bn settlement Airbus agreed with the United States, the United Kingdom and France. With prosecutors arguing that the manufacturer had bribed public officials and made hidden payments in its efforts to compete around the world.

Both Fernandes and Kamarudin, who a well-known figures within the aviation industry descried the settlement Airbus reached, stating: “This agreement and the contents were arrived at without any reference to us; neither were any explanations sought from us. This is in clear violation of fundamental legal principles of fairness.”

This is not the first time Airbus has been embroiled in controversy. Last year the World Trade Organisation sided with complaints from the U.S. that the European Union, especially France was providing the planemaker with unfair levels of public subsidy to help it compete with its American rival Boeing.

While AirAsia’s share price has plunged 10.15 per cent to close at 1.15 MYR, Airbus shares are actually up 2.77 per cent, standing at €137.38 in late-morning trading.

The coronavirus outbreak has compacted AirAsia’s woes with the airline forced to a cope with a marked decline in air travel throughout the continent.

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