Liquor sale payments made to third party: Official

By Maleesha Sulthanagoda  

SriLankan Airlines made payments for wine and champagne sales in their inflight duty free services to a different company than Phoenix Duty Free Services Ltd., which had been given the contract, a top official from the national carrier told the Presidential Commission yesterday.   

SriLankan Airlines Senior Manager (Commercial Procurement) Dehan de Silva, testifying before the Presidential Commission of Inquiry (PCoI) into alleged fraud and corruption at SriLankan Airlines, SriLankan Catering, and Mihin Lanka Ltd during the period from 2012 to 2017, said that during the contract term with Phoenix Duty Free Services (PDFS) for the supply of wines and champagne, that the National carrier made payments to a different company.

 “We received directions from the Board of Directors to enter into a contract with a company named Phoenix Duty Free Services Ltd Canada. However the agreement we signed was with a company named Phoenix Rising Ventures (PRV) Canada, but the copies of the invoices given to me by the payments department of the finance division was for a company named Duty Free Partners (DFP) Canada Ltd.”

De Silva also said that during the wine tasting session held after the contract negotiations began, there was a conflict of interest, as representatives of both the companies were present at the tasting offering recommendations. He mentioned that while officials of the carrier, such as the CEO Kapila Chandrasena and Chairman Nishantha Wickramasinghe, attended the event alongside culinary experts such as Dharshan Munidasa, representatives from Phoenix Duty Free Services taking part and giving their views was contrary to the ethical practices typically followed by a global airline. 

“The PDFS Managing Director Raju Chandiram and CEO Rumesh Dilan Wirasinghe attending the wine tasting organised by the SLA is a conflict of interest. It is not normal practice for suppliers to attend a wine tasting and offer recommendations,” he added.  

Furthermore he noted that the airline awarded the contract to Phoenix Duty Free Services before terminating the call for an open tender, which received solicited tender bids from 46 suppliers out of which 17 were shortlisted. He emphasised that it would have been normal practice to inform shortlisted companies that they were having ongoing negotiations with Phoenix Duty Free Services, which submitted an unsolicited bid, but this practice was not followed. 

“We awarded the contract for the supply of wines and champagnes to Phoenix Duty Free Services Ltd, on 9 March 2012, but we cancelled the call for an open bid for the procurement of wines and champagnes on 10 March 2012,” de Silva said.