PCOI reveals issues in transfer of SriLankan airlines shares

Colombo (News1st) - It was revealed at the Presidential Commission of Inquiry today (Aug 6th) that there is no paperwork to show that the Monetary Board had approved the EPF to acquire shares of SriLankan Airlines in 2010. The Commission today was made to understand that the original document of the transfer of shares from Emirates to Bank of Ceylon had certain deficiencies. The BOC informed the Treasury Secretary that the shares acquired from Emirates had been registered under the Bank of Ceylon, People's Bank, National Savings Bank and the Employees Provident Fund. Though cabinet approval had been given to acquire the 43.63% stake of Emirates in SriLankan Airlines for USD 53 Million, there is no mention of any approval for those shares to be transferred to People's Bank, National Savings Bank and the EPF. Both the People's Bank and the National Savings Bank had made an investment of USD 10 Million for 4,236,135 shares each while the EPF made an investment of  USD 4,399,472 for 1,863,676 shares. As of today, the Government of Sri Lanka owns 99.11% , EPF owns 0.36% , the employees own 0.53% and People's Bank has only one share. Since 2013 no dividends had been paid to any of the shareholders. There is also no document to show that the Monetary Board approved the used of Public Funds for the EPF to also acquire a stake in the national carrier. Since 2009 the SriLankan Airlines has been struggling with a financial crisis and later sought the assistance of InterVISTAS Consulting Group. It came to light today that in 2012 , A Dubai based bank had confirmed a facility of USD 175 Million under the condition of a government guarantee, the GoSL had thereby infused USD 100 Million each over a period of five years. Since this did not transpire, the airlines faced a serious burden in cash flow and in order to address the capitalization issue, the Government of SriLanka infused a total of Rs. 46.4 Billion in the form of Treasury Bonds to Sri Lankan Airlines from 2011 to 2013. The witness says further documents need to be looked into, in order to ascertain who actually decided to enter the infusion via T-Bonds. Despite the infusion of public money to the tune of Rs 46.4 Billion, the national carrier has made continuous losses.