Dissecting malpractices of SriLankan Airlines

Colombo (News 1st) - The Presidential Commission of Inquiry into Sri Lankan Airlines convened today and once again matters relating to the General Sales Agreements and questionable financial transactions of SriLankan airlines was taken up for consideration. Testifying earlier today, a high ranking official from the Bank of Ceylon stated that the both Sri Lankan Catering and the wider SriLankan Airlines group had both used the bank as a means of leveraging their financial requirements. The Senior Banker stated that this included, bank guarantees, loans and overdrafts which were often supported by guarantees from the treasury to meet expenses related to working capital, penalty payments and other operations related expenses. It was also revealed that in December 2014, a senior official of the treasury had written to the Civil Aviation Authority, stating that a Rupee sum equivalent to USD 125 Million was to be handed over to SriLankan Airlines for the purpose of 'debt settlement'. In a shocking statement, the official further went on to declare that the government expects state banks to continue funding the state carrier, until such point that the airline enters into a Public Private Partnership. He further added that the current processes followed by state banks in this regard are not typical of commercial banks, saying that the funds offered to the government could be used more profitably if it were offered to private businesses.

SECOND WITNESS

A second witness appearing before the commission provided further information on the General Sales Agreements signed with foreign parties to represent the Airline overseas. She stated that Sri Lanka initially had a GSA partner for the territory of Hong Kong, but looked for a new partner following the expiry of the agreement. Following what was a violation of due process, then Chairman Nishantha Wickramasinghe had then intervened and recommended 'Pacific Air Limited' to hold the GSA. Although the Manual for the year 2009 states that a panel must meet and approve GSA's, no such approval was found with regard to the territory of Hong Kong. Wickramasinghe was also present at the CID unit of the PCOI earlier today, to provide statements on his alleged involvement in malpractices at the Airline.