‘SriLankan transacted six bonds with People’s Bank’

The SriLankan Airlines (SLA) had six bonds transactions with the People’s Bank and four of them to the face value of Rs. 25 billion were done with the intervention of the Ceylon Petroleum Corporation as a third party, the Presidential Commission of Inquiry (PCoI) learnt yesterday.

Assistant General Manager (People’s Bank Back Office Branch) Chandrasiri Fernando testified before the PCoI on SriLankan Airlines, SriLankan Catering Limiting and Mihin Lanka (Pvt) Limited yesterday.

It was revealed that the ownership of three of the four Treasury Bonds to the face value of Rs. 18.1 billion were transferred to the Ceylon Petroleum Corporation (CPC) from the SLA in 2014. Later, the Corporation has sold them to the People’s Bank and earned money for settling the fuel cost that the company was due to pay for the Corporation.

The other bonds transaction between the SLA and the People’s Bank took place in March 2014 and bonds to the face value of Rs. 6.9 billion had been sold directly to the bank by the company at a settlement value of Rs. 7.3 billion. The due payment had been deposited to the CPC account by the bank as per the written request of the SLA, the witness told.

The other two transactions took place in March and December in the same year when the Central Bank of Sri Lanka (CBSL) issued bonds to the three State banks, People’s Bank, Bank of Ceylon, and the National Saving Bank in exchange of the SriLankan Airlines shares owned by these institutions. The CBSL had issued two Treasury Bonds with the face value of Rs. 1.137 billion and Rs. 168 million to the People’s Bank for the purpose as a direct placement. The Commission will inquire into these three institutions today.


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