Twenty out of 21 Mihin Air accounts closed

Testifying before the Presidential Commission of Inquiry probing irregularities at Sri Lankan Airlines, Sri Lanka Catering and Mihin Air, Chief Executive Officer of Sampath Bank Chaminda Sirikumara yesterday said that now defunct Mihin Air had maintained an account which had Rs.11 million and it was still lying with the bank.

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Sirikumara told the Commission that Mihin Air had had 21 Rupee Accounts with the Sampath Bank and now there was only one as others had been closed and money withdrawn.

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Answering queries, he told the Commission that he was not aware of the fact that Mihin Lanka had ceased operations and the Rs.11 million account of Mihin Air was still operative.

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When a state counsel questioned the witness whether a request had been made to withdraw the money deposited with the bank, he answered in the negative.

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The witness said that there were two accounts of Mihin Air with the bank and produced documents pertaining to them.

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He produced documents to the Commission pertaining to the accounts belonging to Mihin Air which had ceased to operate and the existing one.

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Earlier in the day, the Commission was told how SriLankan airlines had obtained a loan amounting to USD 34.5 million from Standard Charted Bank (SCB) in February, 2017 of which USD 27 million was utilized to pay penalties for the cancellation of three aircraft lease agreements.

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SCB Director, Sri Lanka, Anuri Ratwatte informed the Commission of the 2017 transaction.

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Representing the commercial banking sector of SCB Sri Lanka, Dushan Laurence Casie Chetty also told the Commission that SriLankan Airlines had named SCB as lead manager for an international bond issue to raise USD 175 million. He said those sovereign bonds would mature in December 2019.

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As the SriLankan Airlines was short of capital, it had requested SCB London to act as a loan arranger for a syndicated loan facility under Islamic banking facilities. The syndicated loan valued at USD 150 million, was arranged involving the Al Hilal Bank, the Abu Dhabi Islamic Bank, the Noor Bank, United Bank Limited and Commercial Bank Sri Lanka. The loan had been obtained to settle the outstanding loan from Mashreq, he said.

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Ratwatte said that the Mashreq Bank’s loan terms included a 100% guarantee for the USD 175 million loan obtained by the SriLankan, whereas the syndicated loan facility only required 1/3 rd of the total loan as a guarantee. (The syndicated loan facility was USD 150 million, so the guarantee required was USD 50 million)

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The Commission, headed by its Chairman retired Supreme Court Judge Anil Gooneratne PC will meet today at 10.00 a.m.