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SriLankan Airlines bosses should be criminally prosecuted for Airbus deal, other frauds: probe report

COLOMBO (EconomyNext) – An inquiry in to SriLankan Airlines, which ran up colossal losses during the regime of President Mahinda Rajapaksa has recommended criminal prosecution for its bosses for procurement fraud and abuse of power.

A statement from the office of Sri Lanka’s Prime Minister Ranil Wickramasinghe said a Board of Inquiry anti-corruption lawyer J. C. Weliamuna has recommended criminal investigation and prosecution of ex-President Rajapsaksa’s brother-in-law who was chairman, among others.

The board of inquiry found "instances of gross abuse of power by former chairman Nishantha Wickramasinghe whose penchant for young air hostesses" had caused the more problems for the state airline, the statement said.

SriLankan Airlines made losses of more than 110 billion rupees since the Rajapaksa administration ended a management deal with Emirates, not counting losses in the financial year to March 2015.

The Weliamuna report found that the Rajapaksa administration made management changes to buy brand-new Airbus aircraft for 2.3 billion US dollars despite the availability of cheaper alternatives.

It had found evidence that Chief Executive Kapila Chandrasena falsified documents to lease luxury Benz and Prado vehicles for the Chairman.

The committee said he was "unsuitable for the job", was paid 1.5 million rupees on top of other perks and drawn salaries simultaneously from his positions as Chief Executive of Mobitel, a state-run mobile firm and Mihin Lanka, another loss making state airline started by President Rajapaksa.

Calls made to Chandrasena’s mobile were not returned as of late Saturday.

There were also procurement deals where conflict of interest were seen. The panel recommends a criminal investigation into sales of duty free goods and wine which it has identified as a blatantly corrupt deal.

"The management of Sri Lankan staff knowingly ignored conflict of interest in companies and individuals hired to advise the national carrier on procurements leading to a reasonable assumption that they were all corrupt deals," the statement said.

An air hostess had been released to work for ex-President Rajapaksa’s son Namal, following a request from then Presidential Secretary Lalith Weeratunga.

She was paid more than 4.2 million rupees by the airline, though there was there was "no explanation of what services she provided" the statement said.

The Board of Inquiry has recommended that those who authorized the payments be prosecuted and the overpaid amounts recovered.

Chairman Wickramasinghe had created a post of ‘Brand Ambassador’ and "appointed his known companion, an airhostess even though no such designation was known to the national carrier."

"The couple had travelled abroad on tickets bought by Sri Lankan from other airlines…," the statement said.

The Board of inquiry had said it can "conclusively hold that former Chairman’s association with cabin crew members exposed Sri Lankan Airlines to abuse of power, causing reputational risks as well as financial losses.

"BOI can also hold that there was no corporate culture in the board or the top management to raise such issues when a senior officer or the chairman was involved in such behavioral issues adversely affecting the company."

A London station manager who tried to stop an illegal practice of sending motor spare parts for the use of another of ex-President’s sons, Yoshitha had been suddenly transferred out on the direction of his father.

The panel had said sales agencies were appointed to many countries in a corrupt way and a criminal investigation was recommended into the involvement of Udayanga Weeratunga, ex-ambassador to Russia, who is a relative of ex-President Rajapaksa.