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'A-I MD suspended to ensure fair probe'

The government said on Thursday that Air-India managing director Michael Mascrenhas and another top official were suspended to ensure an impartial probe into a possible 'conspiracy to unduly favour' Welcome Travels, the general sales agent in London.

"Since the presence of these officers -- Mascrenhas and P K Sinha (regional director in office) -- would impede fair and impartial enquiry/investigation, they have been placed under suspension," a civil aviation ministry media release said.

"The entire matter had been entrusted to the Central Bureau of Investigation," the release added.

The government wanted to present the 'factual position' in view of 'unfounded inferences' drawn in respect of the suspension of the two officials, the release stated.

The suspension came at the head of a running feud between Mascrenhas and the government over reinstatement of suspended commercial director V K Verma and the proposed privatisation of the airline.

Listing out various enquiries by the A-I vigilance officer, the ministry's own investigation and taking cognisance of the draft CAG report, the release said: "It stands prima facie established that Air-India extended undue favours to Welcome Travels over a period of time."

Mascrenhas had said on Wednesday that the government action was 'motivated and malafide' and that he would seek legal opinion to challenge the suspension in the court.

The release said that CAG report received by the ministry stated that "the payment of productivity linked incentive amounting to 10.79 million pounds (about Rs 570 million) was made to GSA during 1987-2000 outside the scope of agreement in addition to 3 per cent overriding commission and 9 per cent normal commission was not justified.

"Flawed interpretation of the payment of PLI from first round rather than at the rate applicable for each slab further resulted in an excess payment of 2.031 million pounds (about 138.2 million) during the last three years ending 1999-2000," it said.

CAG had sent its observations to A-I for comments, the government release said, adding: "The CAG has, however, found A-I's reply not tenable according to the letter of Mascrenhas dated October 24, 2000, to the ministry."

The ministry said that M B Sagar, the then acting chief vigilance office of AI, had submitted a report in October last year regarding 'misuse of official position by senior officers including Mascrenhas by showing undue favour to the London GSA.'

An analysis of all the reports "makes it amply clear that the management of A-I over a period of time has been showing unwarranted generosity to Welcome Travels to the detriment of the commercial interests of A-I," the official release said.

While Mascrenhas was not available for his comments, sources close to him said that he was being victimised as a result of the 'prolonged battle' between him and the civil aviation ministry over key issues like disinvestment and sale of bilaterals to other airlines.

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