PBJ VIOLATed PROCEDURE - Finance Head

SriLankan Airlines COMMISSION OF INQUIRY:

ISSUED Rs 14 BN worth TREASURY BONDS:

Kamani Alwis-Friday, September 28, 2018

Former Treasury Secretary Dr.P.B. Jayasundera had issued treasury bonds worth Rs.14 billion to SriLankan Airlines in 2012 without following proper procedure, SriLankan Airlines Finance Head Yasantha Dissanayake stated.

He was testifying before the Presidential Commission of Inquiry (PCoI) probing irregularities at SriLankan airlines, SriLankan Catering and Mihin Lanka yesterday.

Although funds had been approved for the airline by the Cabinet and Parliament, Dr.Jayasundera instead had issued treasury bonds to the airlines, he added.

Cross examined by Additional Solicitor General Neil Unamboowe PC, Dissanayake said Dr.Jayasundera had directed not to sell or use bonds as a guarantee to obtain funds but had issued a Treasury Guarantee for SriLankan Airlines to obtain a US$ 175 million loan from the Dubai based Mashreq Bank.

Dissanayake said that when the airline sought permission to obtain loans from NDB Investment Bank and Singapore based Barclays Bank, Dr.Jayasundera had refused the request. He later had given the Treasury Guarantee and instructed to obtain the loan from Mashreq Bank.

Dissanayake further said the Cabinet had approved a US$ 500 million capital infusion earlier and in the 2011 budget,a further Rs.10,000 million for the airline, but at no instance had mentioned about providing the airline with treasury bonds instead of funds.

Dissanayake said the airline had not received these approved funds and as the financial situation of the national carrier got worse he and senior officials had met Dr.Jayasundera to discuss the matter. He said several other senior officials of the CBSL too were present at the discussions in addition to Dr.Jayasundera.

During discussions Dr.Jayasundera had said that he would provide treasury bonds instead of monies. According to Dissanayake, SriLankan officials had met Dr.Jayasundera on three other occasions after that to discuss the matter.

Later, when the airline proposed to obtain a loan from either the above mentioned local bank or the Singapore based bank, Dr.Jayasundera had refused both and instead had given a treasury guarantee to obtain the loan from the Mashreq Bank he added.

Dissanayake said he was accompanied by SriLankan Airlines Chairman Nishantha Wickramasinghe, CEO Kapila Chandarsena, Director Susantha Ratnayake, W.A.Nalini from the Bank of Ceylon for the discussion held with Dr.Jayasundera on February 13, 2012.