NEW DELHI: A bitter boardroom battle has erupted in AirAsia India , with cofounder Arun Bhatia alleging that the low-cost airline, in contravention of Indian laws, is controlled by its Malaysian parent, AirAsia Bhd, and he would take up the issue legally.Bhatia, a junior partner in the venture that has AirAsia and the Tata Group as its major shareholders, also said the Indian airline’s slow growth and mounting losses were due to poor management and costly third-party agreements entered into with companies affiliated to AirAsia Bhd Group Chief Executive Officer Tony Fernandes Bhatia, a Delhi-based businessman whose son married Londonbased steel tycoon LN Mittal’s daughter in 2004, said he has been raising these issues with Fernandes and the board for nearly a year, but nothing has happened.“I will now either go to court or to the authorities,” he told ET on Thursday in a one-hour interview during which he also accused the other shareholders of trying to push him out of the airline.Bhatia’s comments presage a bitter end to one of the most high-profile airline partnerships clinched two years ago after the then government liberalised foreign investment rules and allowed foreign airlines to own up to 49% of Indian carriers.AirAsia Bhd has a 49% stake, Tata Sons a little over 41% and Bhatia’s Telestra Tradeplace the rest in AirAsia India.The Tatas initially held 30% and Telestra Tradeplace 21% stake in the airline. But at a board meeting in August, Bhatia refused to invest further — the shareholders agreement grants him the right to first refusal when equity subscription comes up — citing the poor performance of the airline. The Tatas invested, effecting a change in the equity structure.AirAsia India disputed Bhatia’s contention. “AirAsia is a board-driven company and it is incorrect to state that it is being controlled by the Malaysian shareholder. We do not comment on board-level proceedings but suffice it to say that the partners have cordial relations and are committed to the joint venture,” the company’s Chairman S Ramadorai, a long-time Tata Group executive and the former boss of Tata Consultancy Services, told ET.Fernandes and AirAsia Bhd did not respond to a detailed set of questions sent by ET.Bhatia’s allegations could provide ammunition to BJP leader Subramanian Swamy who is fighting a legal battle to quash the clearance given by the previous United Progressive Alliance government in April 2013 to AirAsia India to launch operations.Swamy has moved the Supreme Court, saying the effective control of the airline lies with the foreign investor and it violates a policy the UPA unveiled in September 2012 to allow foreign airlines to invest up to 49% in Indian airlines.Bhatia, who has invested Rs 20 crore in AirAsia India, also said he is looking to exit AirAsia India but at a premium. “It is a business after all.” He said when the airline was conceived, he was told it will make profits after a year. “I want to make money. That’s why I invested. But that hasn’t happened.”Bhatia is also opposing a decision by the board on Wednesday to invest $22 million more into the airline, which has been hobbled by a severe cash crunch. “I will neither invest further nor use the right of first refusal this time until the airline improves its performance and I am given details of all the matters I have raised.” The airline has burnt all the $30 million put in by the shareholders and is surviving only by advance sale of tickets, two persons with direct knowledge of the matter told ET.The $22-million cash infusion plan, Bhatia said, has been orchestrated by the Malaysians and they also controlled the airline’s CEO Mittu Chandilya. “Mittu has no control and does anything Tony says.”Chandilya did not respond to several text messages and calls to his cellphone.Bhatia, whose son Amit is an independent non-executive director in AirAsia Bhd and a partner with Fernandes in English Premier League football club Queens Park Rangers, did not attend the Wednesday meeting.“I was promised at the last board meeting in November that the issues I have complained against would be resolved. They haven’t been resolved and hence I decided not to attend.”AirAsia India, which started operations in June 2014, has barely 2% share of the domestic passenger market. The airline posted a loss of Rs 65 crore in the September quarter compared with a loss of Rs 24.71 crore a year earlier. Bhatia also said that other entities controlled by Fernandes were contracted by AirAsia India for various services.AirAsia India pays insurance and maintenance charges to companies related to Fernandes, he said. “Up to Rs 45 of the Rs 130 collected per ticket as travel insurance from passengers goes to an insurer controlled by Fernandes’ Tune Group,” he said, adding that the back-end operations of AirAsia India are run by AirAsia Global Shared Services, another entity controlled by Fernandes.The issue of foreign control has been haunting AirAsia since inception. As recently as September, the issue came up for discussion during a meeting between AirAsia Bhd CEO Aireen Omar and Aviation Secretary RN Choubey.In an interview to ET in August, Chandilya said he has been communicated, though not officially, that the aviation ministry is reviewing the permission given to the airline to start operations.In September 2013, Bhatia criticised the decision by the Tatas to start another airline, Vistara, with Singapore Airlines , calling it “unethical”.