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SriLankan pays novice Amerasian Corporation partner Rs50mn to vet business plan

Sep 05, 2018 19:35 PM GMT+0530 | 0 Comment(s)

ECONOMYNEXT - State-run SriLankan Airlines had paid 50.7 million rupees in 2011 to a partner of a company called Amerasian Corporation, which had no prior experience, to vet a business plan developed by an ex-employee for 750,000 rupees, a commission of inquiry heard.

The foreign company, Via Capital Partners had bumped up a capital infusion from the government to 500 million dollars from 300 million dollars, but had made little changes to the original plan, a SriLankan Airlines official told Presidential Commission of Inquiry into irregularities in the national carrier.

Via Capital Partners, a new company which had no experience of any kind, was selected out of 12 consultancy firms who replied to a request for proposals, Financial Management Head of SriLankan Airlines Yasantha Dissanayake said.

He said past experience was a requirement in the tender for the consultancy, and Via Capital Partners did not qualify based on this requirement.

He said that the company may have been kept in the running, because Via Capital had said it was a joint venture of InterVISTAS, another consultancy. It was one of four firms short-listed.

A five member committee in SriLankan was appointed to select the consultancy, but only two members had signed off on the selection of Via Capital Partners, Dissanayake said.

He said a majority decision was required to award the contract, but the board had gone ahead with the document signed by two directors.

Dissanayake said Via Capital Partners had signed the contract, even though SriLankan initially wanted InterVISTAS to be a party.

Via Capital Partners was introduced by a company called Amerasian Corporation, which SriLankan Airlines had been pressured to accept advisory services from, the commission had been told earlier.

There was little difference between the strategic business plan and the reviewed document Via Capital Partners returned, according to a document submitted to the board in 2011 by then chief executive Kapila Chandrasena, Dissanayake said.

SriLankan ex-chief financial officer Senaka Chandrasekera had authored the original strategic business plan over three months for 750,000 rupees.

Changes in the reviewed plan included raising a capital injection from the government to 500 million dollars from 300 million dollars, changing the mix of wide-bodied and narrow-bodied aircraft and some routes, Dissanayake said.

Dissanayake said he had pushed for then InterVISTAS Executive Vice President Emre Serpen, an experienced consultant, to be a part of the review.

Serpen had sent a letter two days before the agreement was signed, saying he would be a part of the review process.

In evidence given earlier it was revealed that then Ports and Aviation Ministry Ranjith de Silva, and Public Enterprise Department Director General Suren Batagoda had been involved in introducing Amerasian Corporation and asking for advisory business to be given to it.

Documents referred to then Ports and Aviation Ministry Secretary de Silva writing to SriLankan Airlines Chairman Nishantha Wickramasinghe, stating they have a 'verbal agreement' about Amerasian, state attorneys to question whether the deal was like 'match fixing'. (Colombo/Sept05/2018)


 

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