Ex-Chairman and CEO of UL give statements before PCoI

Friday, 24 August 2018 00:00 - - {{hitsCtrl.values.hits}}

BOC approved $ 100 m and Rs. 12 b loans to UL without guarantees: official
Loans given since 2014, overdraft facility extended from $ 10 m to $ 70 m
Commission hears BOC accepted UL biz plan to make profits by 2014

By Maleesha Sulthanagoda

Former SriLankan Airlines Chairman Nishantha Wickremasinghe and former CEO Kapila Chandrasena gave statements yesterday before the Criminal Investigation Department (CID) unit attached to the Presidential Commission of Inquiry (PCoI).

The Commission issued summons for Wickremasinghe and Chandrasena to give statements on the evidence revealed before the PCoI. Both former officials gave statements for about two hours each at the BMICH office of the PCoI. The statements were not open to reporting by the media.

Meanwhile, the PCoI into allegations of fraud and misconduct at SriLankan Airlines, SriLankan Catering and Mihin Lanka heard yesterday that SriLankan Airlines took multiple loans from Bank of Ceylon (BOC) totalling over $ 100 million since 2014 without guarantees of repayment.

BOC Offshore Banking Division Chief Manager Upul Wijegunawardena said that BOC officials approved loans for requests made by SriLankan Airlines since 2014 totalling more than $ 100 million, and three rupee loans worth more than Rs. 12 billion, which the national carrier had not yet settled. It was also revealed that the bank had extended the period to complete the loan by only considering the Letter of Comfort given by the Government Treasury valid until 30 June 2018.

It was also revealed to the PCoI that the airline had obtained several Overdrafts (ODs) and loans since 2017. Most of these ODs had been borrowed without guarantees.

SriLankan Airlines suffered financial failure after the acquisition by Emirates Airline but still BOC had decided to extend the Letter of Guarantee limit of $ 3 million to $ 10 million. BOC has currently extended the OD limit for SriLankan Airlines to $ 70 million.

“The bank had extended both the Letter of Guarantee limit and OD limit by considering the five-year business strategic plan which had been submitted by the SriLankan Financial Division and according to the plan SriLankan has to earn profits by the year 2014,” he said.

The operational level of SriLankan Airlines had not earned profits since 2012 but BOC approved these loans and ODs as SriLankan was the national carrier.

Former Defence Secretary Gotabhaya Rajapaksa and former Mihin Lanka CEO Sajin Vaas Gunawardena are also set to give statements to the CID unit in the coming days.