What was the loss?
SriLankan Airlines entered into a contract with Airbus SE as a result of bribery, and later had to pay US$116 Million (23 billion LKR approximately) as fees to cancel the contract. The loss is approximately US$116 Million (23 billion LKR)[1] [2]
Description:
As revealed through the Statement of Facts (SoF) (R v. Airbus SE – Deferred Prosecution Agreement 2020) issued as part of the Deferred Prosecution Agreement (DPA) between Airbus and the United Kingdom’s Serious Fraud Office, the Airbus Company had agreed to make a payment of USD 16.84 million (approximately LKR 3.4 billion) in total to the wife of former Chief Executive Officer (CEO) of SriLankan Airlines to influence the purchase of 10 aircrafts in 2013. To avoid the transactions being tracked, the said amount was paid through a shell company owned by her in Brunei. According to this SoF, Airbus had paid USD 2 million (approximately LKR 406 million) of the total to this company as a bribe.[3]
The Criminal Investigation Department in Sri Lanka informed court that the said amount was initially deposited into the Singapore bank account of the shell company in Brunei. On two separate occasions money had been transferred to accounts of the former SriLankan Airlines CEO in Australia. Later in 2014 on several occasions, money from this Singaporean bank account was transferred to Sri Lanka into bank accounts of several businessmen.[4] In 2020 when the DPA was announced, the former CEO Kapila Chandrasena and his wife were taken into remand custody [5] but were later released on bail. There is a lack of information regarding the domestic legal action against these accused, after 2020.
What is the corruption?
The payment of 2 million US dollars to a company in Brunei registered under the wife of former Chief Executive Officer of Sri Lankan Airlines, has been done to influence the procurement procedure. Accepting such a bribe, if proved in a Sri Lankan court is an offence under sections 17 and 19 of the Bribery Act.
Who were the victims?
- The general public
- Sri Lankan Airlines
The money that Sri Lanka had to pay as cancellation costs could have been used for other investments, such as hospitals, education, and other forms of development.
What has been done?
- Kapila Chandrasena (the said CEO) and his wife were remanded and was later granted bail.
- Recently, SriLankan Airlines reportedly made a claim with Airbus SE for 1 billion US dollars for damages, loss of reputation, reimbursement of costs[6] and interest.[7]
- TISL has corresponded with the Serious Fraud Office (SFO) in UK regarding obtaining compensation for Sri Lanka.
What can be done?
- Demand domestic legal action against the public officials involved locally.
- Demand the contract between Airbus SE and SriLankan Airlines, to be made public.
- Demand for the introduction of a legal framework on proceeds of crime and asset recovery.
- Advocate for international cooperation for recovery of assets and victim compensation for the general public of Sri Lanka.
[1] https://parliament.lk/uploads/comreports/1566538443076012.pdf
[2] https://www.tisrilanka.org/airbus-bribery-tisl-writes-to-uks-serious-fraud-office/
[3] https://www.tisrilanka.org/tisl-welcomes-srilankans-decision-to-sue-airbus-and-calls-for-further-domestic-action/
[4] https://www.newsfirst.lk/2020/02/20/the-airbus-scandal-how-the-bribe-moved-around-sri-lankan-circles/
[5] https://www.aa.com.tr/en/asia-pacific/srilankan-airlines-ex-ceo-wife-remanded-for-bribery/1726797
[6] https://www.tisrilanka.org/tisl-welcomes-srilankans-decision-to-sue-airbus-and-calls-for-further-domestic-action/
[7] https://www.ft.lk/top-story/SriLankan-Airlines-sues-Airbus-for-1-b/26-714934