SriLankan lost Rs. 381m - Rs. 34b in three years | Sunday Observer
Airbus deal allegations:

SriLankan lost Rs. 381m - Rs. 34b in three years

9 February, 2020
Kapila Chandrasena and spouse, Priyanka Wijenayake - AFP
Kapila Chandrasena and spouse, Priyanka Wijenayake - AFP

At the hour the successful rescue mission to Wuhan, China was operated, the loss-making national carrier made headlines following a court verdict in the United Kingdom (UK). According to results of almost four years of investigations of the Serious Fraud Office (SFO) in the UK, the France-based aerospace industry giant Airbus has bribed many international airlines, including SriLankan Airlines in connection with aircraft purchases.

Former Chief Executive Officer of SriLankan, Kapila Chandrasena and his spouse, Priyanka Wijenayake were remanded last week.

Soon after allegations were levelled at Chandrasena and his wife for accepting bribes from Airbus, President Rajapaksa ordered authorities to take immediate action on the matter.

Court documents in the UK indicate that Airbus had agreed to bribe US $ 16.84 million to a dummy company registered in Brunei. Evidently, this company was registered under the name of the wife of the CEO at SriLankan Airlines at that time. Moreover, Airbus had paid US $ 2 million to the company as either bribe or gratification.

Following financial tracking down, authorities have found the money released at several times to a bank account belonging to the former SriLankan CEO from this company registered under his wife’s name.

As per the information that unfolded in the UK courts, this Brunei company was to yield US$ 1 million for each A330 and US$ 1.16 million for each A350 aircraft purchased by SriLankan Airlines. Furthermore, Airbus has paid US$ 2 million on December 27, 2013 in favour of the dummy company following two invoices submitted by SriLankan Airline’s former CEO, court documents claim.

This was after the agreement between the Brunei registered company and Airbus on March 29, 2013 to buy out six A330 aircraft, four A350 aircraft and an additional lease out of four A350 aircraft. The French aerospace giant has hired the spouse of the SriLankan CEO misleading authorities while she possessed no experience or consultancy knowledge on aviation. However, leading to another shady deal, the order for the A350s was cancelled in 2015.

In the wake of all these discoveries and instructions given by President Rajapaksa, the Attorney General’s Department (AGD) asked the police to get a warrant and arrest the former SriLankan CEO and his spouse. The main charge against the duo has been money laundering.The AGD has also asked the Criminal Investigation Department (CID) to share investigation results with the Commission to Investigate Allegations of Bribery or Corruption of Sri Lanka.

As per the information published by SFO, Airbus reached a record 3.6 billion Euro settlement with US, UK and French authorities ending the world’s largest global resolution for bribery.

Considering this huge pay-out, issuing a press release, Transparency International Sri Lanka (TISL) highlights the importance of paying compensation to the countries that are the victims of corrupt deals involving Airbus.

TISL Executive Director Asoka Obeyesekere said, “It is important to recall that the fallout from this deal is widely reported to have cost in excess of 17 billion rupees in cancellation penalties. Given that the evidence shows that corruption was involved in the procurement process, it is imperative that action is taken both internationally and locally to ensure that Airbus and its agents are held accountable for losses inflicted on Sri Lanka.”

The Yahapalanaya government cancelled the order for three A350 aircraft under this agreement, where it ended up with an extra loss to the tune of Rs. 14.3 billion in 2016, Presidential Commission of Inquiry (PCoI) on irregularities at SriLankan Airlines, SriLankan Catering and Mihin Lanka revealed. Testifying before the PCoI, Financial Management Head of SriLankan, Yasantha Dissanayake also stated that under the management of Kapila Chandrasena, the national carrier has incurred a loss of Rs. 381 million to Rs. 34 billion in a span of three years.

Obeyesekere added, “The settlement reached between Airbus and prosecuting authorities in the US, UK and France should by no means be interpreted as a clean slate.

The action on the part of Airbus and its agents as far as Sri Lanka is concerned, is emblematic of corrupt and exploitative business practices which prey on the vulnerable.”