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Airbus kickbacks: Lanka paid US$98 million as compensation to leasing company

UNP MP Mujibur Rahman said that the government had acted on the premise that the country would have incurred a far bigger loss if the national carrier had gone ahead with the project.

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Updated: February 10, 2020

UNP MP Mujibur Rahman, yesterday (09) said that yahapalana government had paid compensation to the Netherlands-based aircraft leasing company AerCap Holdings N.V. for the cancellation of the leasing agreement in respect of four Airbus A 350-900 ordered by the previous administration. The decision to cancel the agreement had been taken on the recommendation of JC Weliamuna report, the Colombo District MP said.

Rahman said that the government had acted on the premise that the country would have incurred a far bigger loss if the national carrier had gone ahead with the project.

The UNPer said so when The Island asked him at the Opposition Leader’s Office media briefing why compensation had been paid to the aircraft leasing company at issue.

Rahman said the yahapalana government had not been able to renege on an agreement between the government of Sri Lanka and an international organisation.

Minister of Ports, Shipping and Aviation Arjuna Ranatunga in Feb 2015 named board of inquiry headed by attorney-at-law J.C. Weliamuna to inquire into four specific allegations, including irregularities in procurement and leasing of aircraft.

Asked as to why the then Public Enterprise Development Minister Kabir Hashim, who is also the Chairman of the UNP acted hastily in that regard, lawmaker Rahman pointed out that the minister concerned acted on the Weliamuna report. The UNPer also explained the action taken by the FCID (Financial Crimes Investigation Division) and the PRECIFAC (Presidential Commission of Inquiry to Investigate and Inquire into Serious acts of Fraud, Corruption and abuse of power, state resources and privileges) in respect of the controversial Sri Lankan Airlines re-fleeting project undertaken during the previous administration.

The cabinet of ministers approved payment of compensation to the tune of USD 146 mn nearly a year after the payment had been made though Minister Hashim subsequently claimed only USD 98 mn was paid.

The Island pointed out that though UNP leader Ranil Wickremesinghe recently called for President Gotabaya Rajapaksa’s government to take tangible measures to obtain compensation from France-based Airbus Company, the matter regarding Sri Lanka paying massive compensation was yet to be discussed.

Weliamuna was later named Sri Lanka’s High Commissioner to Australia. Since the change of government in Nov 2019, the President’s Counsel has been recalled.

Alleging that losses suffered by the country as a result of SriLankan Airlines corruption were far bigger than that of 2015 and 2016 Treasury bond scams, lawmaker Rahman emphasized the then Sri Lankan CEO Kapila Candrasena and his wife Priyanka Niyomali Wijenayake couldn’t have engaged in such a massive bribe-taking project without political backing. The UNPer alleged that the Chandrasenas had the blessings of the powers that be to undertake the operation. The UNP spokesman asked the media whether it would be possible for Chandrasenas to arrange the deal without the backing of his political masters.

Asked by The Island whether his assertion such massive corruption couldn’t take place under any circumstances without the backing of political heavyweights whoever in power also applied to Treasury bond scams perpetrated during yahapalana administration as well as other mega cases, the UNPer said, ‘yes.’

Rahman pointed out that in spite of Kapila Chandrasena being exposed before PRECIFAC, the government formed after President Maithripala Sirisena sacked the democratically elected government on Oct 26, 2018, had no qualms in elevating the controversial CEO to the post of Chairman, Sri Lankan Airlines. The MP however appreciated President Sirisena immediately cancelling that appointment.

At the onset of the briefing, lawmaker Rahman explained that the Chadrasenas had received USD 2 mn only though the original consensus was for a staggering USD 16 mn. Pointing out that they had re-negotiated the money offered due to Sri Lankan Airlines decision not to fully implement the original re-fleeting project, MP Rahman alleged that the plans went awry due to the change of government in January 2015.

Had Maithripala Sirisena lost the presidential election, they would have gone ahead with the re-fleeting programme, lawmaker Rahman said. The UNPer alleged that when Vasudeva Nanayakkara raised the SriLankan re-fleeting plans at the cabinet, he was told there was no requirement for the cabinet of ministers to approve it.

MP Rahman said that those who had been in power owed an explanation as to why the re-fleeting plans were discussed at the official residence of the then Speaker Chamal Rajapaksa. Kapila Chandrasena had been so influential he was appointed as an advisor to two enterprises in which the government had stakes as a particular Finance Ministry circular prevented him being on the boards of directors of those while being Sri Lankan CEO, MP Rahman said.

Lawmaker Rahman alleged that the national carrier suffered in the wake of the then government taking over the management following a dispute with the then Emirates-run airline’s British head Peter Hill in Dec 2007 over President Mahinda Rajapaksa and his entourage being denied seats. In 2010, Sri Lanka reacquired 43.6 per cent stake in SriLankan worth USD 70 mn Kumaratunga administration sold to Emirates.

MP Rahman questioned as to why the then government extended Chandrasena’s contract in 2014. The UNPer also found fault with the appointment of Nishantha Wickremesinghe, the elder brother of former first lady Shiranthi Rajapaksa, as the Chairman of the National carrier. The UNPer compared the performances of businessman Harry Jayawardena and Nishantha Wickramasinghe as the Chairman of the national carrier, explaining how the management collapsed during the administration of the latter.

Lawmaker Rahman alleged that those who had been involved with Chandrasenas may have tried to move them out perhaps from Negombo in a boat. Obviously, they couldn’t have taken a flight out of the BIA as Kapila Chandrasena risked being identified therefore sea route was safe for them, the UNPer. However, they couldn’t do so, the MP said.

The UNPer warned the government not to suppress the investigation though the Chandrasenas were remanded till Feb 19 pending investigations.

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The Island
About the Author: Established in 1981, The Island is an English-language daily newspaper published in Sri Lanka.

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