PCoI asks UL official if they had not been careful with funds from govt.



By Rathindra Kuruwita 


Member of the Presidential Commission of Inquiry (PCoI) on irregularities at SriLankan Airlines, SriLankan Catering and Mihin Lanka, Justice Gamini Amarasekera, yesterday, asked a Senior UL official whether they had not been careful with the funds, which came from the government.  


The commissioner asked Yasantha Dissanayake, Head of Financial Management at SriLankan this question after it was revealed that the Airline had attempted to procure a number of aircraft, in 2012, though the airline was incurring heavy losses.


 Dissanayake also revealed that Via Capital, an international aviation consulting firm, which came up with a business plan in 2010, had recommended that the airline must augment its ageing fleet.


They were to be replaced by A330s and A 330-200s. The business plan required a USD 500 million capital infusion, out of which USD 250 million was to be infused within the first year.


 "But the government didn’t give you an unqualified assurance. That meant that you didn’t have money to refleet, so why did the airline go ahead and attempt to purchase aircraft? You don’t go to a fancy restaurant with Rs. 100 in your pocket," Chairperson of the PCoI, Anil Gooneratne asked Dissanayake. "We didn’t even have Rs. 100 in our pocket," Dissanayake said.


Dissanayake earlier told the PCoI that SriLankan only had assets worth USD 494 million when it reached an agreement with Airbus, in 2013, worth USD 807.2 million. 


Article 184.2 of the Company Act and the Articles of Association of SriLankan say that a resolution needs to be adopted by the Board of Directors when such a major transaction is to take place.


Dissanayake said that while the government capital infusion, which commenced in 2012, had improved their balance sheet to some extent, the airline had still been in dire financial straits.


"I have to send monthly financial reports to the board. When SriLankan decided to acquire four Airbus A350-900 and obtain four more, on lease–– amounted to more than 50% of the total SriLankan assets in 2013. I told the board that we were in a serious situation. Earlier, I recommended downsizing."


 
 
 
 
 
 
 
 
 
 
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