AirAsia group CEO Tony Fernandes and chairman Kamarudin Meranun will step aside for at least two months while the airline and authorities investigate allegations Airbus paid a bribe of $50m (€45m) to win plane orders from the company.
A committee comprising the non-executive members of AirAsia's board will review the allegations and take any necessary action, Asia's biggest budget airline said yesterday.
Mr Fernandes, one of the aviation industry's best-known executives, and Mr Meranun will remain advisers, however, "in view of the current difficult economic circumstances facing the airline industry", the company added.
Senior company executive Tharumalingam Kanagalingam will be the acting CEO, with the changes effective immediately.
In Ireland, Mr Fernandes is behind a €25m development of the former Ormond Quay Hotel in Dublin city centre, and he previously held a stake in Dublin Aerospace. He is also a former chairman of UK soccer club Queens Park Rangers.
In a joint statement, Mr Fernandes and Mr Meranun denied any allegations of wrongdoing or misconduct as directors of AirAsia. "We would not harm the very companies that we spent our entire lives building up to their present global status," they said.
Shares in AirAsia and unit AirAsia X fell yesterday after the allegations by Britain's Serious Fraud Office came to light on Friday.
AirAsia stock fell as much as 11pc to 1.27 ringgit, their lowest since May 2016, while AirAsia X dropped 12pc to an all-time low of 11.5 Malaysian sen.
Malaysia's anti-graft agency is also investigating the allegations. AirAsia has said it never made any purchase decisions that were premised on Airbus sponsorship, and that it would fully co-operate with the Malaysian Anti-Corruption Commission.
Malaysia's Securities Commission said on Sunday it would also examine whether AirAsia broke securities laws.
The allegations were revealed as part of a record $4bn settlement Airbus agreed with France, Britain and the United States. Prosecutors alleged the firm had bribed public officials and hidden payments as part of a pattern of worldwide corruption.
"This agreement and the contents were arrived at without any reference to us; neither were any explanations sought from us," Mr Fernandes and Mr Meranun said in their statement.
"This is in clear violation of fundamental legal principles of fairness."