AirAsia's QPR sponsorship-Implications for the AirAsia board,breaches of the Companies Act '65
First , Tony Fernandes aka Choirboy, CEO of AirAsia and owner Queens Park Rangers (QPR) in his own words:
"If worse comes to worse, I'm sure I can persuade Air Asia or Malaysian Airlines to come on board and sponsor us (QPR)."
Now according to Malaysia's Companies Act 1965
Section 131A of the Companies Act 1965-Interested director not to participate or vote
S131A(1) provides that:‘Subject to Section 131, a director of a company who is in any way, whether directly or indirectly, interested in a contract entered into or proposed to be entered into by the company… shall be counted only to make a quorum at the board meeting but shall not participate in any discussion while the contract or proposed contract is being considered at the board meeting and shall not vote on the contract or proposed contract
‘Shall not participate’ has been defined in PP v Dato Haji Mohamed Muslim bin Haji Othman [1983] 1 MLJ 245 where Hashim Yeop A Sani J held that even the physical presence at the EXCO meeting was sufficient for him to be regarded to have used his public position for his advantage.
In this case, regardless of whether Tony was present at BOD meetings, he has said, and the facts subsequently prove that he "can persuade Air Asia ....... to come on board and sponsor (QPR)."
It does appear that Choirboy is in breach of Section 131 (A), but the story does not end there.
The rest of the AA board also have a duty to ensure that they voted independently and in the best interest of AA. It is going to be interesting to see how they are going to do so when Choirboy has so openly said he "can persuade Air Asia ....... to come on board and sponsor (QPR)."
If they can't :
—S131(8)
Penalty:
‘Imprisonment for seven years or one hundred and fifty thousand ringgit or both’
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THE AIRASIA BOD
 | DATO’ ABDEL AZIZ @ ABDUL AZIZ BIN ABU BAKAR was appointed Non-Executive Director of the Company on 20 April 2005 and on 16 June 2008, he was re-designated to Non-Executive Chairman. He is also the Chairman of the Nomination Committee. Prior to this, he served as an Alternate Director of the Company to Dato’ Pahamin Ab. Rajab since 11 October 2004. He also served earlier as a Director of the Company from 12 December 2001 to 11 October 2004. He is currently the Non-Executive Chairman of VDSL Network Sdn Bhd. He is also the Chairman of PAIMM (Academy of Malaysian Music Industry Association) and PRISM (Performance and Artists Rights Malaysia Sdn. Bhd.), a music performers collection body. From 1981 to 1983 he was Executive Director of Showmasters (M) Sdn Bhd, an artiste management and concert promotion company. |
He subsequently joined BMG Music and was General Manager from 1989 to 1997 and, Managing Director from 1997 to 1999. He received a Diploma in Agriculture from Universiti Pertanian Malaysia in 1975, his BSc in Agriculture Business from Louisiana State University, USA in 1978, and an MBA from the University of Dallas, USA in 1980.
 | TAN SRI DR. TONY FERNANDES was appointed Group Chief Executive Officer of the Company in December 2001. He is also a member of the Employee Share Option Committee of the Board. Prior to joining the Company, he was Financial Controller at Virgin Communications London from 1987 to 1989, Senior Financial Analyst at Warner Music International London from 1989 to 1992, Managing Director at Warner Director at Warner Music Malaysia, from 1992 to 1996, Regional Managing Director, ASEAN from August 1996 to December 1999 and Vice President, ASEAN from December 1999 to July 2001 at Warner Music South East Asia. He was actively involved in developing the Malaysian music industry and received the title ‘Setia Mahkota Selangor’ from DYMM Sultan Selangor Sultan Salahuddin Abdul Aziz Shah in 1999 in recognition of his contributions and was also the recipient of the ‘Recording Industry Person of the Year 1997’ by the Recording Industry Association of Malaysia. |
In July 2005, he was conferred the Darjah Datuk Paduka Tuanku Ja’afar (DPTJ) which carries the title Dato’ by the Negeri Sembilan’s Yang DiPertuan Besar Tuanku Ja’afar Tuanku Abdul Rahman in conjunction with His Majesty’s 83rd birthday celebrations in recognition of his services rendered to the betterment of the nation and community. In 2006, he was named the Master Entrepreneur of the Ernst & Young Entrepreneur of the Year 2006 Malaysia. He also bagged ‘The Brand Laureate’ Brand Personality for his exemplary performance, dedication and contribution towards the aviation industry in Malaysia in the same year and also in 2007. He was admitted as an Associate Member of the Association of Chartered Certified Accountants in 1991 and became a Fellow Member in 1996.
In 2007, he was conferred yet another title, the Darjah Sultan Ahmad Shah Pahang (DSAP) which carries the title Dato’ by the Pahang’s KDYMM Sultan Haji Ahmad Shah ibni Almarhum Sultan Sir Abu Bakar Riayatuddin Al- Muadzam Shahas recognition of his services rendered to the betterment of the nation and community. In 2008, he was bestowed with another title by the Sultan, the Darjah Kebesaran Sultan Ahmad Shah Pahang Yang Amat Di Mulia which carries the title Dato’ Sri.
In 2009, he was conferred the ‘CAPA Legend Award 2009 (Aviation Hall of Fame)’ in recognition of his influential actions for directly shaping the way the aviation industry has evolved, and ‘Airline CEO of the Year Award for 2009’ from Jane’s Transport Finance, for successfully leading and growing AirAsia into the world’s best low-cost airline and Asia’s largest.
In March 2010, he received an Honorary Doctorate of Business Innovation from Universiti Teknologi Malaysia (UTM), a recognition for his role in changing the face of aviation and benefitting travelers and economies locally and in the region, and the following month the title of ‘Officier of the Legion d’ Honneur’ by the government of France for his outstanding contributions to the aviation industry. The Legion d’ Honneur -- the highest rank of honour that the government of France can award to a non-French citizen -- was established by Napoleon Bonaparte in 1802 to recognize outstanding service to France.
In April 2010, he was honoured with the title of ‘Officer of the Legion d’ Honneur’ by the government of France for outstanding contributions to the French aviation industry. It is the highest rank of honour that the government of France can award to a non-French citizen.
The following month, he received the prestigious Nikkei Asia Prize in Tokyo for his contributions to the growth of Asia. The prize, given by leading Japanese newspaper publisher Nikkei Inc., recognised his role in democratising travel in Asia.
Fernandes also received the prestigious Forbes Asia Businessman of the Year 2010 award. He is the first Malaysian and Southeast Asian to receive the award.
In February 2011, he was awarded the Commander of the Order of the British Empire (CBE) honour by Her Majesty Queen Elizabeth II. The award was conferred on him for services in promoting commercial and educational links between the United Kingdom and Malaysia.
In April 2011, Tony was conferred Darjah Seri Paduka Mahkota Perak (S.P.M.P) which carries the title Dato’ Seri at the Istana Iskandariah in Kuala Kangsar.
 | DATO’ KAMARUDIN BIN MERANUN was appointed Director of the Company on 12 December 2001. In January 2004, he was appointed Executive Director and on 8 December 2005, he was re-designated to Group Deputy Chief Executive Officer. He is also the Chairman of the Employee Share Option Scheme Committee of the Board. Prior to joining the Company, he worked in Arab-Malaysian Merchant Bank from 1988 to 1993 as a Portfolio Manager, managing both institutional and high net-worth individual clients’ investment funds. In 1994, he was appointed Executive Director of Innosabah Capital Management Sdn Bhd, a subsidiary of Innosabah Securities Sdn Bhd. He subsequently acquired the shares of its joint venture partner of Innosabah Capital Management Sdn Bhd, which was later renamed Intrinsic Capital Management Sdn Bhd. |
He received a Diploma in Actuarial Science from University Technology MARA (UiTM) and was named the “Best Actuarial Student” by the Life Insurance Institute of Malaysia in 1983. He received a B.Sc. degree with Distinction (Magna Cum Laude) majoring in Finance in 1986, and an MBA in 1987 from Central Michigan University.
 | CONOR MC CARTHY was appointed Non-Executive Director of the Company on 21 June 2004. He heads the Safety Review Board of the Company. He is Managing Director of PlaneConsult, a leading aviation business solutions provider which he set up in 2000 which specialises in advising and establishing Low Cost Carriers Prior to establishing PlaneConsult, Conor was the Director of Group Operations at Ryanair from 1996 to 2000. Before joining Ryanair, he was the CEO of Aer Lingus Commuter. Prior to that, he was General Manager/SVP for Aer Lingus in the Marketing and Strategic Planning divisions. |
Independent Directors
 | DATO’ LEONG KHEE SEONG was appointed Independent Non-Executive Director of the Company on 8 October 2004. He is Chairman of the Audit Committee and a member of the Remuneration Committee of the Board. He was Deputy Minister of Primary Industries from 1974 to 1978, Minister of Primary Industries from 1978 to 1986 and a Member of Parliament from 1974 to 1990. Prior to this, he was a substantial shareholder of his family’s private limited companies, which were principally involved in general trading. He was the Chairman of the General Agreement on Tariffs and Trade’s Negotiating Committee on Tropical Products (1986 to 1990) and was the Chairman of the Group of 14 on ASEAN Economic Cooperation and Integration (1986 to 1987). He graduated with a degree in Chemical Engineering in 1964 from University of New South Wales, Australia. He is an Independent Non-Executive Director of TSH Resources Berhad. |
 | DATO’ FAM LEE EE was appointed Independent Non-Executive Director of the Company on 8 October 2004. He is also a member of the Audit, Remuneration and Nomination Committees of the Board. He received his BA (Hons) from the University of Malaya in 1986 and an LLB (Hons) from the University of Liverpool, England in 1989. He obtained his Certificate of Legal Practice in 1990 and has been practising law since 1991 and currently is the senior partner at Messrs YF Chun, Fam & Yeo. He also serves as a Director of M-Mode Berhad. |
 | DATO’ MOHAMED KHADAR BIN MERICAN was appointed Independent Non-Executive Director of the Company on 10 September 2007. He is also a member of the Safety Review Board and Audit Committee of the Board. He has had more than 20 years’ experience in financial and general management. He has been an auditor and a management consultant with an international accounting firm, before joining a financial services group in 1986. Between 1988 and April, 2003, Dato’ Khadar held several senior management positions in Pernas International Holdings Berhad (now known as Tradewinds Corporation Berhad), a company listed on the Main Board of Bursa Malaysia Securities Berhad, including as President and Chief Operating Officer. |
He is a member of both the Institute of Chartered Accountants in England and Wales and the Malaysian Institute of Accountants. He is also presently a Director of Rashid Hussain Berhad, RHB Capital Berhad, RHB Investment Bank Berhad (formerly known as RHB Sakura Merchant Bankers Berhad) and ASTRO All Asia Networks PLC.
 | MOHD OMAR BIN MUSTAPHA, was appointed as Independent Non-Executive Director of the Company on 16 March 2011.He co-founded Ethos & Company in June 2002. He led Ethos as Managing Partner from 2002 to 2010, and became Chairman of the firm in January 2011. As Managing Partner he provided the overall stewardship for the partnership group and associates, and guides the thought leadership and client development agenda of the firm. In 2004, he took a sabbatical from Ethos to serve as Special Assistant to Deputy Prime Minister Dato’ Sri Najib Tun Razak for economic, corporate sector and foreign policy issues. He re-joined Ethos as Managing Partner in 2006 upon the untimely passing of his partner and co-founder Dr. Liew Boon Horng. In 2007, he co-founded Ethos Capital, a Malaysian based private equity firm focused on providing equity capital and management support to growth companies in Southeast Asia. Ethos Capital’s maiden fund is in excess of RM200 million. |
He has significant experience in the Malaysian and international corporate and government sectors, where he has engaged with and advised top‐level decision‐makers on issues of business strategy, public policy and regulatory engagement, corporate governance and leadership, performance and talent management. Prior to establishing Ethos, he was a consultant with McKinsey & Company based in Kuala Lumpur and London. He has served multinational clients in the telecoms, energy, media, retail, banking and government sectors in Southeast Asia, the Middle East and Western Europe. He started his career as a Corporate Planning Manager with Petronas and subsequently as a Vice President with the Multimedia Development Corporation.
He is a member of the National Economic Council chaired by the Prime Minister. He was elected by the World Economic Forum as a 2007 Young Global Leader and is a 2008 Eisenhower Fellow. He is a founder of the Young Leaders Programme of the World Islamic Economic Forum.
He graduated from Oxford University where he obtained his BA (Hons) and MA degrees in Politics, Philosophy and Economics. He has attended advanced leadership studies at the Harvard Kennedy School of Government.
He also serves as an independent non-executive director on the boards of Petroliam Nasional Berhad
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