SriLankan shares distributed by BoC with letter to Treasury: Official

Tuesday, 7 August 2018 00:10 - - {{hitsCtrl.values.hits}}

Cabinet approval given only for BoC to hold shares purchased from Emirates
But BoC gave shares to NSB, People’s Bank and EPF
Decision informed to ex-Treasury Secretary by former BoC Chairman with letter

By Maleesha Sulthanagoda

Despite Cabinet approval only being given to Bank of Ceylon (BoC) to hold shares of SriLankan repurchased from Emirates, several other State entities, including People’s Bank and National Savings Bank, had been allocated shares, with the distribution only being informed by a letter from the former BoC Chairman to the former Treasury Secretary, the Presidential Commission heard yesterday.

SriLankan Airlines Company Secretary Dalrene Thirukumar, appearing before the Presidential Commission of Inquiry (PCoI) into alleged frauds and misconduct in SriLankan Airlines, SriLankan Catering, and Mihin Lanka, provided further documents related to the purchase of shares under the reacquisition of the airline from Emirates by SriLankan Airlines.

The documents provided by Secretary Thirukumar mentioned that the Bank of Ceylon (BOC) Chairman Gamini Wickremasinghe sent a letter to the Former Finance Secretary Dr. P.B. Jayasundara, stating that they were going to distribute the shares previously owned by Emirates Airline after the reacquisition of SriLankan Airlines.

On 1 August, Secretary Thirukumar, testifying before the PCoI, provided documents on agreement between the Government and Emirates Airline on purchase of the shares owned by Emirates.

In 2010, Emirates Airline agreed to sell the 43.63% shares of the airline owned by them to the Government. At the time, the Government Valuation Department had valued the Government-owned shares at $450 million. The documents provided by Thirukumar noted that former President Mahinda Rajapaksa, as the Finance Minister, had produced a memorandum to the Cabinet on 01 June 2010, which noted that approval was granted to BOC to explore the possibility of purchasing the Emirates shares for $53 million.

According to the documents, on 20 June, the 22 million shares owned by Emirates were transferred to BOC for $53 million. But as of 30 August 2010, when SriLankan registered the shares’ holders, BOC owned 12 million shares, People’s Bank 4 million shares, National Savings Bank (NSB) 4 million shares, and the Employees Providence Fund a million shares.

However, there is no Cabinet Paper available to say that the Treasury approved the other State institutions to purchase the Emirates shares, despite the fact that the Cabinet only approved Bank of Ceylon to purchase the shares.