“New Dog, Playing A Very Old Trick”


AirAsia Bhd’s (AAB) audit committee has issued a statement following the GMT Research report, pointing out that it cannot have legal control or legal power over its associate companies in Indonesia, Philippine, Thailand and India, HERE.


This was the best respond that AirAsia could come out with to rebut what had been published by GMT reseach, Hong Kong.


AIrAsia should have instructed its auditor, PriceWaterHouse to rebut what have been published by GMT research but it didn’t.


The AirAsia Audit Committee’s above statement was made in respond to the GMT research allegations of AirAsia involvment in questionable accounting practices, HERE.


Yesterday, CNBC, had published critical respond from GMT research. GMT research did not withdraw any of its allegations levelled against AirAsia’s questionable accounting practices. It went further to publish more details of the questionable accounting practice.


GMT: “AirAsia is closed to default”.


The interesting excerpts of the CNBC’s reports are repropduced below (please watch the interesting video interview of GMT officer through the link below):


The negative analyst report that sent AirAsia shares into a tailspin finally went into wide release Wednesday, alleging the budget airline needs to raise as much as $1.9 billion to pay down debt.

AirAsia may be a new dog, so to speak, but it’s playing a very old trick,” GMT said in the report. The jibe is among a mixed bag of accusations contained in the report, which GMT distributed to clients on June 10, but withheld from the media until June 24.

It primarily accuses AirAsia of “milking” transactions with its money-losing associates in the Philippines and Indonesia, such as plane lease and maintenance deals, to boost the parent’s operating cash flow.

Because the associates currently aren’t able to pay their bills to the parent, “AirAsia is extending significant capital to them, essentially gearing up, funding its own profits and flattering its operating cash flows,” the report said, alleging the carrier is close to default.

GMT said AirAsia doesn’t disclose the profit recognized from these transactions, just the revenue. It estimates that AirAsia used these deals to inflate profits by 39 percent over the past five years.

AirAsia seems to be making more money leasing planes to associates than flying planes around the region,” Gillem Tulloch, a partner at GMT, said in a phone interview. “AirAsia should pass the value back to its associates. It doesn’t have to take such a large cut.”

GMT advises selling or shorting AirAsia stock, saying its fair value is 1.23 ringgit a share or less.   AirAsia hasn’t responded to CNBC’s requests for comment.

For full report and the CNBC interview in U-Tube, HERE.


The closing of price of AirAsia share on 25-6-2015 was RM1.60.  Please digest the above carefully before you put your good money into the stock market.

35 thoughts on ““New Dog, Playing A Very Old Trick”

  1. AA despicable

    So the question is ‘substance over form’. Legally AA has no control over its partner companies, but the truth is they do have financial control. The point is, investors are interested in the real financial truth of the company, assuming all legal matters are satisfied. Many still believe AA mislead investors with their accounting numbers, hiding behind the pretext of ‘legal control’. This is old trick. No one would believe their share price is worth anything more than 2 ringgit.

  2. Azman

    Cooking the accounts? Don’t touch the share of any company that play with its accounts. What is the SC doing about this? SC is just useless.

  3. Phang

    Tony had tried to spin that he will now concentrate in AirAsia and leave behind his other businesses. What other businesses that he has now. Nothing substantial. His investments in Caterham , QPR, AirAsia X and overseas AirAsia have gone down the long kang or reached a stage of no return.

    please stop bullshitting. We all know the pariah’s game plans. AirAsia X is as good as dead.

    Just look at the closing share price of AirAsia. It had dropped another 3.75% to RM1.54. No wonder Tony is speechless these days. No investors will tolerate any company got involved in questionable accounting practices. Until now not one in AA could come up with a good explanation against the allegations by GMT research Hong Kong.

    1. No More Hope

      The share price of AA is on a downward trend for some two weeks. AA is RM1.54 & AAX about 20 Sen! It is so clear that they were trying all forms of propaganda as damage control. Its no longer work. BK Sidhu of Business Star could publish more misleading statements in the Star and it will not be able to help AA and Tony. When one played with fire, then one fine day one will get burn. Tony and his boys are now groping in the dark. No more hope.

  4. Ismail

    If what had been written by GMT Research of Hong Kong was not true why AirAsia not suing it????? This is too glaring. Under the situation, I would rather believe GMT than AirAsia because no convincing rebuttal has been put forward so far So it looks like it’s game over soon.

  5. Con Man Toni"

    “AirAsia Bhd boss Tony Fernandes has told staff and analysts he will spend more time working on the budget airline and put his other business and sporting interests to one side, after a report questioning the company’s accounts sent its share price tumbling.”

    The issue raised by GMT was about AirAsia’s very questionable accounting practices and not about Tony was spending time in other companies like QPR, Caterham and etc. it is about questionable accounting practices that did not give a fair and true view of its accounts. Who can trust a listed company playing with numbers in his accounts.

    No wonder no investors are supporting AA’s stocks.

    He dare not sue GMT and he had been skirting around the issues trying to bullshit his way around. How could we trust such a businessman? I will not put a Sen into AA stocks under this situation. AA stick will be less than a RM soon. My advice to the investing public is to stay away from company that play around with its accounts.

  6. Toxic Airline

    Business rule 101 – you cannot sustain your business by leeching off your customers, suppliers, partners and shareholders.

  7. Jamal

    The Pariah was caught with his underpants down! I am glad that he has been exposed big time and his mercenary journalist BK Sidhu was unable to spin for him. Let’s wait and laugh about AAX expansion to Honolulu. It may not be able to fly to Bkk let alone Honolulu. We are all waiting for the collapse of AAX and thereafter AA.

  8. Anti Spinner

    Dear Tan Sri Dr Tony…now you are saying that you will take a back seat with Kamruddin on other businesses and focus more on Air Asia. For god sake, both, you and Kamaruddin, are the no. 1 men in Air Asia. By saying that you will take a back seat on other businesses, would that be a precedence for both of you to deny your involvement in the twisted accounting practice since you were busy with other businesses?

    C;mon, the public knows the how to read in between the line of your statement, which is implied but not stated.

    1. Anonymous

      Anti Spinner,

      Your observation is spot on. This guy is incorrigible. He will never change. He is a compulsive spinner. He is the main man in AA and yet he still want to spin his way out. The investing public must teach him a good lesson by staying away from all his outfits.

      AA is overwhelmed with debts. It is almost impossible for him to get out of the situation. AA is a house of cards.

    2. Ken

      Typical behavior of a unscrupulous corporate man. We must SC what the hell are you doing about it. The trouble with Malaysia is the enforcement agency like SC is sleeping on the job.

  9. Johari

    AirAsia share counter is definitely taking a nose dive. It will go down further. Tony and BK Sidhu are unable to spin anymore because no one trusted him or her. Tony is just a compulsive spinner. He is facing the shit now. I doubt he could get out of this shit. Too deep!

  10. Danny

    No wonder AA had been doing very well all these years until the GMT research surfaced. Investors have dumped its shares and they are still trying to spin their way out. I am certain that the share price will keep sliding to rock bottom. It is now the question of confidence and not about the confidence of that useless Maybank or other friendly bank analysts. No one trust them any way.

  11. Jeff

    That Thambi with an English name says “We’re professional” in Malaysia Today.


    He could rubbish what the GMT had written but Now Everyone Knows What Are Happening in AIrAsia. So Everyone Dump The Rubbish In The Bin.

    Today closing prices:

    AirAsia RM1.50 down by 2.60%
    AirAsia X 20 Sen down by 6.8%

    Investors confidence cannot be affected by one article from GMT. The thambi wants us to believe his statement and be fooled to buy his shares tomorrow. Sorry thambi, its wrong number. We will never touched the shares ofr AA or its outfits.

    With such share prices, Now Everyone Can Laugh, KA Ka Ka!

  12. Blogger Another Brick in the Wall describes Air Asia shares’ dead cat bounce.

    “When Air Asia Indonesia crashed last year, Tan Sri Tony Fernandez was at his finest in managing crisis. The Malaysian government and MAS or maybe now MAB have lots to learn on communication and public relations from him.”

    “Since the exposure by a Hong Kong based research company, GMT Research, Air Asia shares have been struggling. Tony F response don’t seem to be working to arrest the fall”.

    “In fact, news report today are talking about short selling is at large. This will not be good news for AirAsia shares. A quick look at the chart shows the emerging of a dead cat bounce pattern.”

    For more click-

    Well it looks like the scheiss has really hit the fan big time for Air Asia.

    1. Anonymous

      The shit has hit the fan for a long time and it is now flying all over the place. It is so smelly now. Now Everyone Know How Smelly It is.

  13. Hong

    As on 3-7-2015 AirAsia share price dropped to RM1.52. Now Everyone Can Laugh Out Loud. Tony will say that it is MAS that caused its share price taken a nose dive. Ka Ka Ka!

  14. Now Everyone Got Con

    Yesterday closing price of the low caste airline was around the RM1.50 range. BK Sidhu has to eat her words. She has been portraying AA as a blue chip company where we all know it is very far from it. Now the shit has hit the fan! Ha Ha Ha!

  15. Danny

    Ho Ho Ho! Christmas is here! AirAsia share down to RM1:48 this afternoon. Any damage control activities and statement will no longer help be is the whole world know about the nonsense.

  16. Now Everyone Can Laugh

    The new doggy is licking his wound. AA share down below RM1.50. Tomorrow it will go further to RM1.45. As long as it is dropping very day, it is good for Malaysians so that we don’t have to put up with the spin doctor and BK Sidhu. Now even BK Sidhu has been slapped on the face with all her predictions of AA is going to fly to space ands etc. Now AA is taking a nose dive into the ocean.

  17. Now Everyone Cannot Be Fooled Anymore

    AA share price is going down daily. It went further yesterday because the Indonesian Minister of Transport had given AA until the end of this month to raise about RM140 million. It has also been reported in the press that the increase in equity is to ensure that AA and the other airline will have enough fund to cope up with safety measure. This is a clear indictment that safety measure of AA and several more airlines are a concern to the authority. Last few weeks, GMT had published a damning report questioning the accounting practices of AA. That was the beginning of the slide on AA’s share prices. No investors with the right mind would want to touch a public listed company after reading such report.


  18. Now Everyone Can Laugh At Tony

    Ha! Ha! Ha! The share price of AA has dropped below RM1.30 this morning. Why is BK Sidhu not helping her de facto boss to spin his way of this big turmoil? It is obvious that BK Sidhu could no longer spin as she has no credibility. She is a junk journalist. But the Pariah is still trying to spin his way out. The trend of AirAsia is downward because of crisis of confidence.

    Christmas comes early for AA this year. Lets enjoy watching the collapse of AA.

  19. Gan

    AirAsia share is RM1.29. Now Everyone Is Dumping Its Share. Soon it will be 90 Sen soon. Ka Ka Ka!! The best gift to Malaysia for Hari Raya.

  20. Rosli

    The New Dog is still at his old tricks again and again. He has been screaming about expansion by AirAsia and AirAsia X. Suddenly both companies are expanding. This is just to divert attention of its questionable accounting practices which have been exposed by GMT Research Hong Kong. AirAsia share is now hovering around RM1.30 to RM1.40 which is about half of its share price in February 2015. The old Dog still think that his bullshit will carry him through again. Investors should steer clear from its share until the Old Dog could dispel its questionable accounting practices.

  21. Ryan

    The Pariah has been telling us that AirAsia is still extremely well. Fortunately its share is still nose diving to RM1.20. It will not be too long that its share price will be in the region of Sen like AirAsia X. Run baby run! This is the new slogan for all the shareholder of the low caste airline.

  22. Now everyone is laughing at the pariah.

    When one is messing around with its accounting procedures, public will lose confidence in the company. Now Everyone is Laughing At AirAsia share standing at below RM1. Lunch time today, it is only 0.85 Sen. Ka Ka Ka! padan muka to the pariah. It will go further. Believe. it will be below r0 Sen!

  23. Lim

    Research house has downgraded AirAsia share to only RM1.05!

    Please read:

    KUALA LUMPUR: Alliance DBS Research has downgraded AirAsia to fully valued with a target price of RM1.05 after it proposed to convert its debt from Indonesia AirAsia (IAA) into perpetual securities.

    The research house said on Friday this corporate exercise will not take IAA to positive equity while third party investors’ participation remains crucial

    It said the key question is whether IAA can eventually turn around.

    To recap, AirAsia converted 2.1 billion rupiah (RM621.5mil) of the 4.3 bil (RM1,292.4mil) due from IAA to perpetual capital securities in the latter. The capital securities carry a deferrable coupon rate of 12% per annnum, and are redeemable at 101% of the nominal amount.

    This transaction is aimed to help IAA attain a positive equity position, as directed by the Indonesian Directorate General of Civil Aviation. Post-transaction, AirAsia will immediately recognise a RM474.2mil loss representing its share of unrecognised prior year losses in IAA.

    Alliance DBS Research explained that the conversion would not take IAA to a positive equity position, as its negative equity was 4.2 bil rupiah as at end-2Q15. Thus, third party subscription to the balance 51% of IAA’s perpetual securities (which is uncertain) is crucial for IAA to remedy its negative equity position.

    Also, failure to attract third party investors into IAA would mean AirAsia will have to continue funding the former, a drag on AirAsia’s cash flow which may ultimately result in a cash call.

    “The million-dollar question remains whether IAA can eventually turnaround. Unfortunately, IAA is facing strong headwinds in the near term, given the rupiah’s depreciation vs the US dollar, and the competitive environment in Indonesia.

    “If IAA continues to be loss-making, AirAsia may have to make further impairment on its investment in IAA including receivables.

    “Our RM1.05 TP (1.3 times FY16F adjusted book value per share) is unchanged, as it has accounted for the prior year losses in IAA. But, we downgrade AirAsia to Fully Valued, as the recent rally as unjustified in our view, given the risks in IAA,” it said.

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