'Offset not bribery' comment - PMO says Dr M wasn't referring to AirAsia

The Prime Minister's Office (PMO) said Dr Mahathir Mohamad's comment that offset payments did not constitute bribery was not in reference to AirAsia's alleged bribery case in the UK.

This was after Mahathir raised the example of offset payments in government deals which he said was not tantamount to bribery when asked about the AirAsia alleged bribery case.

"Prime Minister Dr Mahathir bin Mohamad clarifies that at no point did he suggest allegations of bribery against AirAsia as offset payments.

"In answering questions by the press, he pointed out that it is normal for the government to request for offset to benefit from big purchases.

"He did not say that AirAsia was benefiting from this normal practice. He said that only if the money goes to individuals that it becomes a bribe. If it is not for personal benefit, then it is not a bribe in his view," it said in a statement today.

Reports about Mahathir's comments had led to criticism that he was justifying corruption. The PMO said media reports of his comments were inaccurate.

"Reports in the media alluding to the prime minister suggesting allegations of bribery against AirAsia as being offset payments are therefore inaccurate and misleading.

"The PMO views seriously such misleading reports and reports that do not accurately reflect what is said by the prime minister.

"The PMO, therefore, wishes to advise the media to be more sensitive as misleading reports could have undesirable consequences on the public’s understanding of issues," it said.

At a press conference yesterday, Mahathir was asked to respond to UK prosecutors implicating AirAsia in an RM240 million bribery probe involving Airbus.

"I have heard of accusations that AirAsia is involved in corruption, I don't dare to make a decision on that. But it is common when the government procures any equipment, we often request for an offset," he had said.

"For instance, when we buy an aircraft we ask for an offset. It is up to you to decide whether the offset is a (form of) bribery. For me, we don't want to buy something expensive, we cannot accept this.

"If the money we obtain does not go into our own pockets but instead is meant for a certain purpose, then it becomes an offset and this is not bribery. That's my view," he added.

The PMO, in its statement today, said it was up to the MACC to decide if AirAsia was involved in bribery.

Yesterday, Focus Malaysia, citing UK court documents, said Airbus had paid US$50 million (RM240 million) to a sports team owned by two top AirAsia executives to secure the sale of 180 aircraft to the budget airline.

The court documents added that while the sports team was owned by the two top AirAsia executives, it had nothing to do with the airline.

"The sports team was jointly owned by AirAsia 'Executive 1' and AirAsia 'Executive 2' but was legally unrelated to AirAsia and AirAsiaX," it said.

The documents did not mention names but it is understood they were referring to AirAsia Group chairperson Kamarudin Meranun and chief executive officer Tony Fernandes.

The duo has denied wrongdoing and said the UK Serious Fraud Office had never reached out to AirAsia throughout the course of their investigation.

"We categorically deny all allegations of wrongdoing or misconduct on our part as executives and directors of AirAsia.

"Caterham F1, the company alleged to have been sponsored improperly by Airbus was at the relevant time a Formula 1 Racing team that had gone around the globe promoting amongst others AirAsia, AirAsia X, GE and Airbus.

"Throughout the period we were shareholders in Caterham, the company made no profits and was eventually disposed of for one pound sterling in 2014. From start to finish this was a branding exercise and not a venture to make profits," they said.

However, the two have relinquished their executive role to facilitate investigations. Both the MACC and the Securities Commission have begun investigations in Malaysia following the UK revelation.