The Odisha police on Wednesday arrested Air Odisha Aviation (AOA) chairman-cum-managing director Santosh Pani on the charge of cheating. Pani was arrested on a complaint filed by Sandeep Ray, who had invested `40 lakh in the company.
Ray, the son of former Union coal minister and BJP legislator Dilip Ray, had filed an FIR with the Bhubaneswar commissionerate police alleging that the AOA has cheated him of `40 lakh.
The airline, which was operating flights to four cities of Odisha from the Bhubaneswar airport from January this year, was mired in controversies with complaints filed by investors against the management. Soon after Sandeep Ray filed the FIR, Mitesh Khimji, director of Khimji Jewellers (KD & Sons), also an investor in AOA on May 2, 2016, alleged before the Bhubaneswar police that the airline had cheated him of `1.5 crore.
On May 3, 2016, Steven Nixon, a top executive of Dublin-based ITCL Ireland, had lodged a complaint with the state government against AOA alleging monetary fraud by the air service operator. Nixon had claimed that AOA had obtained aircraft on contract from the company and `2.5 crore is due on them.
Meanwhile, Air Odisha’s intra-state air services were grounded on Wednesday as the state government terminated its agreement.
The state’s general administration department’s Centre for Modernising Government Initiatives (CMGI) cancelled the Air Service Operation Agreement (AOA) with the air carrier from June 1, 2016, stating that the company breached the terms and conditions of the agreement. CMGI executive director NK Sethi directed Air Odisha to remove its aircraft from the government hangar within 15 days.
The CMGI had raised objections over Air Odisha for not promoting the former despite the intra-state air service being a joint venture initiative and the state government was paying about `222 per nautical mile as subsidy. It also raised the issues relating to online booking and delay in refund in case of cancellations. Similarly, the over-the-counter sale of tickets, not mandated in the agreement, was also raised in the show-cause notice. Triangular air operation, instead of direct service, was also a major violation of the agreement, according to CMGI.