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SriLankan Airlines probe: SriLankan’s 2013 Airbus deal far exceeded its assets: Finance Chief

1 March 2019 10:36 am - 0     - {{hitsCtrl.values.hits}}

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By Yoshitha Perera 

SriLankan Airlines only had assets worth Rs. 89.4 billion in 2013 when it came to an agreement with Airbus worth Rs. 146.1 billion, Head of Finance at SriLankan Airlines Yasantha Dissanayake told the Presidential Commission of Inquiry (PCoI) probing alleged irregularities at SriLankan Airlines, SriLankan Catering and Mihin Lanka on Wednesday.   

Earlier, it was revealed to the Commission the decision taken by SriLankan to purchase four Airbus A350-900 and lease another four amounted to more that 50% of the total SriLankan assets in 2013.   


Article 184.2 of the Company Act as well as articles of association of SriLankan requires that a resolution needs to be adopted by the Board of Directors when such a major transaction is to take place.   


Dissanayake said while the government capital infusion, which commenced in 2012 had improved their balance sheets, the financial status of the airline was dire.   


“I had to send a monthly financial report 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 had recommended the downsizing,” Dissanayake said.   


On an email sent by former CEO Kapila Chandrasena to Dissanayake on 12 August 2013, Chandrasena referred that the ‘shareholder’ has instructed him to choose the Airbus company and the type of the aircraft. In the email Chandrasena instructed Dissanayake to make the deal but this was informed to the Board only after the deal was made.   

 

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