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A refund from Airbus is possible: TISL chief Obeyesekere

ECONOMYNEXT- Sri Lanka’s best option is to use the dispute resolution mechanisms provided by the Organisation for Economic Cooperation and Development (OECD) to retrieve money paid to Airbus as a lease cancellation fee, a top expert said. 

Asoka Obeysekere, Executive Director of Transparency International Sri Lanka (TISL) told EconomyNext that Sri Lanka has the option of utilising international mechanisms for dispute resolution in this case. 

The contentious point here is that Airbus charged a cancellation fee from SriLankan airlines when wanted to cease the leasing agreement which it found disadvantageous to the airline. 

“It needs to be acknowledged that the key story behind this incident is that Sri Lanka paid a cancellation fee of 117 million US dollars,” Obeysekere pointed out.

“This is mind-boggling since that is money to cancel a deal. Compensation is essential,” Obeysekere tweeted on Saturday. 

“What Sri Lanka can do to salvage the money paid would be to evoke the OECD’s dispute resolving mechanism by engaging the National Contact Point in France where the parent company of Airbus; EADS is registered,” Obeysekara said.

“A refund is possible. ” Obeysekara stressed.

The Airbus scandal broke after court documents released in the UK revealed that the aerospace giant had paid bribes and committed other financial irregularities in half a dozen countries in order to sell planes.

One of the countries is Sri Lanka where a bribe of US dollars 16.84 had been offered. 

Eran Wickramaratne, who was a Minister in charge of the Airline, demanded that Sri Lanka should negotiate with Airbus to obtain a refund of the cancellation penalty since the multinational company engaged in fraud.

Former Sri Lankan Airlines chief Kapila Chandrasena and his wife, Priyanka Niyomali Wijeynaike are in remand after they surrendered to the CID on 06 Feb 2020.

The Court documents released in the UK said that Airbus had engaged the wife of a SriLankan Airlines Executive as an agent.

Chandrasena and Wijenaike are in custody on money-laundering charges.

A sum of two million US dollars was  paid to a straw company named ‘Intermediary 1’ set up in Brunei which was owned by Wijenaike according to the UK investigation.

MP Wickramaratne also claimed that political influence might have also been in play since two individuals alone would find it difficult to hide such a huge sum of money.

The previous government called off the controversial deal, cancelling the purchase of four A350 aircrafts for which the penalty was paid which was met by disagreement by some political members in the current government.

French Parquet National Financier (PNF), the U.K. Serious Fraud Office (SFO) and the U.S. authorities reached an agreement with Airbus to pay four billion US dollar settlement to end bribery probes.

The OECD is a global forum for governments on common economic and social problems. OECD has around 50 industrialised and emerging-economy countries as members or adherents.

The official website provides the following guidelines on engaging NCPs on filing complaints.

“NCPs can also handle complaints that alleged breaches of the OECD Guidelines occurring anywhere in the world, by a multinational enterprise headquartered in the NCP’s country,” the OECD states in their international guidelines.

“NCPs do not usually take up cases on their own initiative, but handle cases when asked to do so by adversely impacted individuals, unions, or non-governmental organisations (NGOs).”

President Gotabhaya Rajapakse has ordered a probe into allegations over financial irregularities on which investigations are still being carried out.

Edited by Arjuna Ranawana

(Colombo/Feb10/2020)

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