Accountability and SOEs

The Commission of Inquiry that was appointed to investigate into allegations of large-scale fraud at SriLankan Airlines, SriLankan Catering and Mihin Lanka will hand in its report tomorrow to President Maithripala Sirisena.

President Sirisena will be handed the report by the members of the Commission, led by its Chairman retired Supreme Court Justice Anil Gooneratne and retired Additional Solicitor-General Neil Unamboowe PC, who led the prosecuting team from the Attorney General’s Department.

The year-long investigation into conspicuous acts of fraud and malpractice in the three State-owned enterprises for a combined period of 36 years gives the inquiry historical significance as the first probe into multiple companies to cover such a vast expanse of time, a report over the weekend said.

At least 560 people were interviewed and investigated with oral and written submissions from 150 witnesses. The Commission’s Criminal Investigations Department unit recorded 853 statements from 341 persons. However, most of the key persons facing allegations sent affidavits instead of appearing in person at the public hearings.

Key among the areas of investigation are lease agreements worth $ 2.6 billion with Airbus for the procurement of aircraft, their cancellations and the subsequent loss of billions of rupees.

Other issues under the Commission’s spotlight include the appointments of Chairmen, Directors and Senior Managers – including the salaries and perks of controversial former CEO Kapila Chandrasena – termination of agreements between SriLankan and Emirates, the capital infusion of the three companies, borrowings from State and private banks, allegations against the practices of former Human Resources Chief Pradeepa Kekulawala – including forcing flight stewardesses to have abortions – business plans and the consultants selected to formulate these.

If the report is sent to the Attorney General and cases are filed based on the findings, as has been the indicated when the Commission was appointed, it could provide unprecedented insight into the inner workings of an extremely corrupt State-owned enterprise (SOE) and be a platform to launch a broader discussion about SOE losses fuelled by politicisation, mismanagement, and corruption that have been ongoing at other institutions for years if not decades.

The management of SriLankan Airlines has been questionable after 2015, and there is clearly a need for policymakers to evaluate whether there is a serious business case for continuing the national carrier. Obviously with elections on the horizon, no political party will want to take the leadership to wind down the entity, but the Commission report provides a great opportunity to have a more transparent discourse of what actually happened and who should be held accountable.

Commission reports in Sri Lanka are notorious for dying a silent death or gathering dust in a corner. The Weliamuna report that was compiled shortly after this Government was elected to power proved to be a damp squib with few if any recommendations being implemented. More officials, both State and political, should be held responsible for wasting taxpayer funds. This report should not just be used as political fodder but genuinely implemented to promote transparency, accountability, and public interest of SOEs.