Mismanagement cost Mihin Lanka up to Rs.6bn: Srilankan

The Government Treasury has made three budgetary allocations to the capital infusion of Mihin Lanka (Pvt) Limited in 2007, 2008 and 2009 -- all amounting to Rs.6.75 billion -- but the airline has suffered losses due to financial mismanagement, the Srilankan Airlines Commission said yesterday.

Director of Public Enterprises Department (PED), Champa Balasooriya informed the Presidential Commission of Inquiry (PCOI) on irregularities at Srilankan Airlines, Srilankan Catering and Mihin Lanka, that the Government Treasury had allocated Rs.500 million in 2007, Rs.250 million in 2008 and Rs.6 billion in 2009 to Mihin Lanka.

She informed the commission that after the budgetary allocation in 2009, Mihin Lanka repaid Rs.1.9 billion for loans obtained from Bank of Ceylon (BOC) and Lanka Puthra Development Bank. She said another Rs.158 million was repaid by Mihin for loans obtained from Lanka Orix Leasing Company (LOLC) Group in 2009. The witness also informed the commission that Mihin Lanka failed to submit its cash performances for the first half of 2007 to PED, and that it had earlier received Rs.500 million to its capital.

However, she said from 2007 to 2009, Mihin Lanka maintained outstanding balances in BOC, Lanka Puthra Development Bank, LOLC, Srilankan Airlines and Ceylon Petroleum Corporation (CPC).