The People’s bank: a history of funding failing ventures

The People’s bank: a history of funding failing ventures

Written by Staff Writer

17 Sep, 2018 | 8:35 pm

Colombo (News1st) – The Presidential Commission of Inquiry into Sri Lankan Airlines, Mihin Lanka and Sri Lanka Catering today (Sept 17) uncovered irregular transactions between the airline and the People’s Bank.

Testifying before the Commission, a representative of the People’s Bank stated that the Airline had obtained a number of large-scale loans from the bank. This included funds for the financing of working capital requirements and funds needed to pay penalties with regard to cancellation of aircraft orders.

Sri Lankan Airlines had obtained a loan of USD 32.5 Million citing ‘Urgent Financial Requirements’ in the year 2016. It was further revealed that a letter had been provided by Secretary to the Prime Minister, Saman Ekanayake, in support of this loan request.

This is only one of the occasions on which the People’s Bank has been used to fund loss-making ventures. News 1st recently revealed details on how Jehan Amaratunga, a Director at the Bank and Executive Vice Chairman of MTD Walkers PLC had received Billions in loans from the bank.

While this company was to construct the second stage of the Central Expressway, the venture to do so had been funded by State Banks.

While many experts constantly raised questions on this company’s financial status and raised red flags on how such a large loan can be approved for a sitting director, even the Central Bank raised questions on whether such an individual can continue to hold such offices at the People’s Bank.

Minister of Public Enterprise & Kandy City Development Lakshman Kiriella, responding to the query stated that the Central Bank had expressed that there were no issues with Jehan Amaratunga holding such office at People’s Bank. The Minister further added that Amaratunga will be given an extension in the coming days too.

IS IT NOT A CRIME TO USE STATE BANKS TO FUND FAILING PROJECTS AND FAILING BUSINESSES?

WILL THESE BANKS NOT PERFORM MORE PROFITABLY IF THEIR RESOURCES WERE DIRECTED TO MORE EFFICIENT SECTORS SUCH AS THE PRIVATE SECTOR?

FOR YOUR ATTENTION.

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