Suren Ratwatte appointed SriLankan CEO without board approval

ECONOMYNEXT – SriLankan Airlines Chief Executive Suren Ratwatte was appointed to his post without a board decision, a witness said at the Presidential Commission of Inquiry to investigate irregularities at the national carrier.

Ratwatte, the brother of Senior Advisor to the Prime Minister Charitha Ratwatte, resigned from his post in June 2018, with effect from 31 July, 2018.

No Board Approval for Appointment

Company Secretary Dalrene Thirukumar testified that to her knowledge, no board approval was given to appoint Ratwatte as Chief Executive of the airline in October 2015.

A new board was appointed earlier in 2015, following the change in government.

Thirukumar said that she would have to check with the Chairman’s office on whether there was any e-mail communication between the board of directors giving approval, but that no decision had been taken at any board meeting.

She said that at a board meeting held on 25 August 2015, then Chairman Ajith Dias and Protem Chief Executive Rakhita Jayawardena had forwarded a board paper to appoint Ratwatte to his post, but the board had deferred taking a decision.

In the period before the next board meeting on 21 September 2015, Dias had directed Thirukumar to draft an appointment letter and other supporting documents for Ratwatte.

“The Company Secretary, that is me, drafted an appointment letter on the Chairman’s request without a board decision,” Thirukumar said.

She said that during the board meeting in September 2015, the directors had noted the submission of the letter and supporting documents, but had not taken a decision on appointing Ratwatte as the Chief Executive.

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However, a signed copy of the letter was issued the day after the meeting, appointing Ratwatte as the Chief Executive with effect from 14 October 2015, she testified.

The airline had agreed to pay Ratwatte a taxable monthly salary of 3 million rupees, a taxable annual bonus of 10 million rupees for reaching company budgets, and other allowances, including a company car and driver.

Irregularities over selecting Ratwatte

Thirukumar’s testimony on the selection of Ratwatte over other candidates was also questioned by the Commission.

She said that 59 local and foreign individuals had applied for the position in May 2015, including Ratwatte, but he was not included in the document with the names of 11 short listed candidates which was forwarded to the Company Secretary.

The post required an applicant to possess a bachelor’s and master’s degree or their professional equivalents, 10-15 years of commercial experience in a global airline, in depth knowledge of finance, flight operations, engineering and other major aspects of managing an airline, provide leadership to take the airline to the next level, with proven ability to influence policy and conduct business.

Thirukumar said that according to a board decision, the interview panel was to be made up of the directors Dias, Jayawardena, Mahinda Haradasa, Rajan Brito and Chanaka de Silva, but only Dias and Jaywardena were present for all the interviews, with other directors joining when available.

The 11 shortlisted candidates had been interviewed via skype in July 2015, while a separate three individuals, including Ratwatte, had been interviewed in Colombo face-to-face, Thirukumar said.

However, she said that a subsequent board paper submitted by Dias and Jayawardena in August 2015 had included 14 names in the shortlist, and had said that two individuals were interviewed in Colombo.

In the same meeting, Dias and Jayawardena had said that due to Ratwatte’s experience as an A380 pilot at Emirates, his knowledge and skill of aviation, a pleasing personality and his ability to relate to the Sri Lankan culture, he was selected as the most suitable candidate to become Chief Executive.

Commissioners at the inquiry questioned the irregularities in the shortlisting and interviewing process, and called on Thirukumar to submit evidence of the marks given by the panel for each interview.

She said that the evidence was available at the Chairman’s office, and she would request for the information.

Confirmed in position by Prime Minister

Towards the end of Ratwatte’s 6 month probation, Brito had requested the board to fill out anonymized performance evaluations on the Chief Executive, as per standard corporate practice, and stated in Ratwatte’s contract.

However, the Public Enterprise Development Ministry had requested the board to extend Ratwatte’s probationary period, as the airline was in the process of finding a 3rd party to invest and manage the airline.

“The ministry said that this was due to the uncertainty in the airline over the request for proposals for a third party to manage the airline, and the third party may not want to continue with the services of Ratwatte,” Thirukumar said.

However, Dias had intervened on behalf of Ratwatte, she said.

“The Chairman was of the opinion that not confirming Captain Suren Ratwatte as CEO now would cause doubts in his mind. It would cause concerns over his job security, and affect his confidence,” Thirukumar said.

“The Chairman said that Captain Suren Ratwatte worked closely with him, was good at his job, and accomplished the set tasks efficiently.”

The board had failed to unanimously agree to confirm Ratwatte, until 6 months later, when Prime Minister Ranil Wickremesinghe and Public Enterprise Development Minister Kabir Hashim, had pushed for the confirmation of Ratwatte in his post.

This too was done without a performance evaluation of Ratwatte, and no performance evaluation had ever been carried out on him during his tenure, Thirukumar said.

She said that after the previous board headed by Dias resigned in early 2018, the new board, headed by Ranjith Fernando, had planned a restructuring of the airline, and Ratwatte had opted for early retirement and submitted his resignation to aid in the restructuring efforts.

The new board had agreed to pay 3 months of Ratwatte’s salary in lieu of notice, and another 2 months of salary in appreciation of his compliance with the plan and time table of the new board to restructure the airline. Further a set of tickets was issued to Ratwatte and his family to relocate to Australia. (COLOMBO, 26 July, 2018)
 

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