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Saturday Dec 14, 2024
Friday, 10 August 2018 00:10 - - {{hitsCtrl.values.hits}}
By Maleesha Sulthanagoda
Government took fresh loans to bail out debt-ridden Mihin Lanka, the Presidential Commission of Inquiry (PCoI) to investigate and inquire into alleged irregularities in connection with SriLankan Airlines, SriLankan Catering, and Mihin Lanka heard yesterday.
Bank of Ceylon (BOC) Relationship Manager - Corporate Banking Prageeth Balasuriya, testifying before the PCoI, provided documents pertaining to temporary overdrafts obtained by Mihin Lanka between 2006 and 2018.
The documents provided by Balasuriya mentioned that, in 2009, the Government took a loan of Rs. 1.38 billion from BOC to settle the temporary overdrafts obtained by Mihin Lanka up until 2009. Balasuriya also told the Commission that a similar request by Mihin Lanka for a loan of Rs. 1 billion from the bank in 2007 to settle all of the temporary overdraft debts was not granted as the Treasury guarantee was not issued.
Balasuriya, presenting documents on overdrafts obtained by Mihin Lanka, said: “Mihin Lanka obtained temporary overdrafts worth over Rs. 1.146 billion from 2006 to 2009 for various reasons, such as working capital improvement, urgent payments pertaining to aircraft procurements, aircraft rentals, fuel compensations, and repair cost compensations. As of 31 March 2009, the total overdraft debts owed by Mihin Lanka to BOC was Rs. 1.381 billion. As the documents state, the Government settled these overdraft debts by obtaining a loan of Rs. 1.381 billion from BOC. Due to our constant demands, this settlement occurred.”
Balasuriya, stating evidence off the documents provided, said: “The requests for temporary overdrafts by Mihin Lanka was granted in spite some of them not having Treasury guarantees or request letters from Mihin Lanka.”
The documents presented before the PCoI also highlighted that the debt-ridden airline had owed Lankaputhra Development bank over Rs. 522 million on top of the Rs. 1.381 billion owed to BOC as temporary overdraft debts.
The PCoI also issued summons to Lankaputhra Development Bank to give more evidence pertaining to the issue before the Commission.
