Govt. issued Rs.14.2 bn treasury bonds to Srilankan in 2012 - PCOI

According to the 2012 budget proposal, the Government had decided to allocate Rs. 10,000 million for Srilankan airlines and Mihin for the capital infusion but in February, 2012 the Government Treasury had issued Rs. 14.2 billion Treasury bonds without issuing proposed cash, it was revealed at the Presidential Commission of Inquiry on irregularities at Srilankan airlines, Srilankan Catering and Mihin Lanka yesterday.

Srilankan Airlines Head of Finance Yasantha Dissanayake informed the Commission that according to 2012 budget speech, then Finance Minister, former President Mahinda Rajapaksa stated that the Government was allocating Rs.10,000 million cash to Srilankan. He informed the Commission that in the 2012 budget speech there was no plan to issue Treasury bonds.

“Cabinet decision and the budget allocation have been changed after reading the 2012 budget and what

I can say is Srilankan had not received cash by the Government Treasury,” he said. He also informed the Commission that, after then Secretary to the Treasury,

P. B. Jayasundara has taken the decision to issue Rs.14.2 billion Treasury bonds, Srilankan management had made several attempts to borrow the bonds and obtain a loan but the Secretary to the Treasury had refused grant permission to Srilankan airlines request. On February, 2012 the former Secretary to the Treasury had refused to issue Treasury guarantees to obtain a loan, stating that the Government has no intention to issue Treasury guarantee for Srilankan but on the same month the former Secretary to the Treasury had agreed to issue letter of comfort to obtain a loan from the Mashreq Bank, Mr. Dissanayake said.

When the Commission questioned about the Mashreq Bank, witness said that it was bank introduced by the Bank of Ceylon and the Secretary to the Treasury had informed the General Manager of BOC to discuss with the particular Bank on behalf of Srilankan airlines.