Mihin Lanka gobbled Rs. 14.5 bn from Treasury - Official

The Treasury had infused Rs.14.5 billion in public funds to the loss making airline, Mihin Lanka. This entire amount was unproductive until the company was liquidated in 2015, it was revealed before the Presidential Commission of Inquiry (PCoI) on Sri Lankan Airlines, Sri Lankan Catering and Mihin Lanka yesterday.

Most of this money had been spent to pay outstanding dues by the company instead of managing them properly for the business to be a profitable entity, Balasooriya said.

Treasury's Public Enterprises (DPE) Department Director Champa Balasooriya testified before the commission for the second consecutive day yesterday.

State Counsel Sajith Bandara leading evidence said that these kinds of expenditures by the state caused heavy burden on the public resulting in paying high tax rates and obtaining foreign loans.

In 2009, Rs. 158 million was released by the Treasury to Mihin to settle loans obtained from LOLC Company, that had been used for security deposits of aircraft without permission from the Treasury.

The Treasury on a request made by then CEO of the company had released another Rs. 157 million to settlle outstanding dues for LOLC in 2010. However, the total amount of budgetary allocation for 2010 for Mihin Lanka was Rs. 1.68 billion.

In 2011, Rs. 300 million with the interest of Rs. 106 million was paid through a supplementary allocation from the budget for loans obtained from Airport and Aviations Services. In the following year, the Treasury had issued Rs. 507 million to the company as per their request. In 2013, the capital infusion to the company by the Treasury was Rs. 1.894 billion. However, for the final year, 2014, the amount of capital infused to the company by the Treasury was Rs. 6.528 billion. This final amount of Rs.14. 5 bllion is exclusive of the Treasury Guarantees and Comfort Letters issued by the Treasury.

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