Spotlight

Sajin's Mihin Lanka comes under COPE scrutiny

By Sonali Samarasinghe

Sajin orders furniture for

Rs. 2.8 million

BOI chief admits political pressure resulted in 24 hour approval

BOI board members not consulted before approval

President accuses one man of trying to sabotage Mihin Lanka

President Mahinda Rajapakse last week demonstrated an indecent interest in Sajin Vass Gunawardena's budget airline Mihin Lanka at the weekly cabinet meeting.

Visibly angry that some bill- boards advertising the new budget airline had been destroyed, he told cabinet he knew of at least one person who was behind the move to sabotage the private venture.

Pointedly looking at the ministers present he then challenged in his customary village chandiya style, "Api balamu kohomada egollang meka navaththanne kiyala" (We will see how they will stop this project).

It was Aviation Minister Mangala Samaraweera who defused the tense situation, cleverly veering the high flying President away from emotion to ground realities.

No cabinet approval

Samaraweera has been systematically sidelined on this issue and has been kept in the dark. Earlier Samaraweera responding to an adjournment question in parliament last week admitted there had been no cabinet approval either to start an airline or to release Treasury funds for the purpose. Samaraweera confirmed in parliament that neither he nor his Ministry were aware of even who the directors of the company were or whether it had been incorporated.

Ironically the custodian of this nation's finances, Dr. P.B. Jayasundera is a director of the airline. Jayasundera has come under heavy attack by both the business community and accounting circles for the total breakdown of the system and his lack of responsibility even as deals such as the SLIC privatisation, Lanka Marine Services deal,  Prima and now Mihin Lanka, come under intense public scrutiny.

Even though Jayasundera signed  Form 48 as a director of the airline, he told The Sunday Leader that he knew nothing about the airline. Perhaps it is his ignorance on these subjects that has now caused the country so much loss.    

Nevertheless Samaraweera at Wednesday's (6) cabinet meeting was to tell President Rajapakse, "You intend to start this airline on February 4, next year - on independence day, but that is not practical. These things take at least six months. This airline has not even been approved as yet by the Civil Aviation Authority."

However Rajapakse could not get beyond the fact that some bill boards promoting Mihin Lanka had been destroyed near the airport. That was after Sajin had run crying to his political daddy complaining a hidden hand was sabotaging his airline. It was left to  Consumer Affairs Minister Jeyaraj Fernandopulle who had earlier vehemently opposed another of Rajapakse's mad schemes to ban the LTTE last Friday, to now step up and pacify the irate President. 'We will look into the matter,' Fernandopulle promised.

Given this power play at Temple Trees, Airport Chief Tiran Alles who was away in Dubai at the time was to promptly call the Katunayake police and demand an immediate inquiry into the allegation lest the finger be directed his way by interested parties gunning for his newspaper group.

Samaraweera meanwhile was tactfully able to delay the operations of the controversial airline and there the matter rested for a space. 

 Political buffoonery

The fact that President Rajapakse himself was vigorously promoting a budget airline which has yet not received cabinet approval nor certification by the Civil Aviation Authority was a sad reflection of Rajapakse's dismal performance as a statesman.

It was more alarming that Rajapakse as the Minister of Finance declined to make any mention of this airline in his budget speech even though his own office sent an application under the hand of his coordinating Secretary Sajin, to the BOI requesting approval for the venture. Not only that, it is this very document emanating from his own office that stated a colossal sum of Rs.3616 billion  or US$ 3.6 billion  would be invested in this venture.

Furthermore a government that has stood firmly against privatisation is now not only intent on illegally starting a private airline but has also set up a private arms procurement company headed by none other than Rajapakse's brother Gotabhaya.

Be that as it may, even as Mihin Lanka was curiously receiving the full backing of the President at the cabinet meeting, elsewhere in parliament COPE members were pitching into the likes of Chairman/Director General, Board of Investment Lakshman Watawala on the same subject.

Having already asked a number of questions from Aviation Minister Mangala Samaraweera last week, COPE Member UNP MP Ravi Karunanayake was to ask Watawala how long BOI approval would take. Watawala admitted that under normal circumstances it would take six to eight weeks at least. The board he said would meet every two weeks to review investment proposals and would conduct detailed investigations to ascertain the viability of such proposed ventures. 

However the BOI approval for Mihin Lanka came in 24 hours (see The Sunday Leader of last week). Watawala who had now set the stage for his own downfall by detailing the stringent procedure to gain BOI approval, was unable to answer COPE questions as to how Mihin Lanka received approval within 24 hours when it had no documentation, no air operational manuals, no feasibility report, except a letter from the President's office under the hand of his Coordinating Secretary, Sajin, a man noted for his fraudulent conduct.

Office space

It is vital to note that even though the registered office of Mihin Lanka Private Limited according to the notice to the registrar of companies filed by Gotabhaya Rajapakse himself is the 35th floor, West Wing, World Trade Centre and its operational offices are located at the BMICH, the letter for approval comes from the President's office.

   Karunanayake also questioned why when  BOI was to approve a taxi service there was extensive advertising and for a government owned airline there is none, while everything is done sans transparency and shrouded in secrecy.  

Watawala totally flummoxed was to then admit to COPE that the approval was given without the knowledge of all members of the board of directors of the BOI and without board approval. Two directors Dammika Perera and Channa Palansuriya confirmed this fact to COPE. 

Parliamentary sources said Watawala admitted at the COPE meeting that political pressure was brought to bear on the BOI in order to get instant approval.       

Rata passata

In the meantime President Rajapakse's gopher Sajin de Vaas continues to spend money lavishly for the Mihin Lanka advertising campaign. It is the Triad Advertising Agency of Rata Perata fame that has taken over the extensive campaign of Sajin's flight of fancy.

Nonetheless the advent of Mihin Lanka will be many in a series of political scams that would take the country not forward but backward.

Triad has already set the stage for electronic and print media campaigns organising extensive photo shoots at hotels such as Hunas Falls involving a helicopter - for capturing aerial pictures - and many other expensive support equipment. Triad has already confirmed to this newspaper that it is the government that has picked up the advertising tabs. 

Meanwhile Sajin who obviously has an unlimited budget, courtesy the public of this country via the Treasury has already contracted with high end furniture experts Don Carolis & Sons to furnish their offices.

The furniture for the two rooms 12/109 and 4/111 in the Prime Minister's suite of the BMICH and the 35th floor of the West Wing World Trade Centre have already been ordered. Sources close to Sajin confirmed that furniture for the operational offices at BMICH  alone is costing Rs. 2.8 million but The Sunday Leader learns only Rs. 250,000 worth of furniture has yet been delivered for which payment has not been made as yet.

Public money

Sajin is therefore spending public funds to furnish offices for a fanciful airline that has not even been given  certification by the Civil Aviation Authority (CAA) nor recruited any operational staff who would in any event have to meet stringent CAA standards.

Mihin Lanka has already started to advertise heavily in the print media calling for stewards and stewardesses and requesting the public to design a logo for the country's airline capturing the spirit of the Mahinda Chintana no less. 

Ironically the country's national carrier SriLankan Airlines is currently in a bad way due to the prevailing war situation in the country. Tourism sources indicate that hotel reservations have dropped to as low as 20 % even though this is high season and SriLankan Airlines admit that over half its bookings for the holiday season have been cancelled.

Harsh travel advisories by countries such as France have contributed to the decline in tourist arrivals and one wonders how Rajapakse will be able to sustain a second airline given this scenario.

However while Sajin has not obtained any approvals that will allow him to operate the airline legally, he has continued to act with impunity by using the President's office address as a launching pad.         

The company was therefore incorporated on October 27  while 10 days later, on November 7 Sajin as CEO of Mihin Lanka wrote to Civil Aviation Authority Director General, C. Nimalasiri and sought the Authority's full cooperation for the airline stating that it was a government owned venture. On November 21 Sajin had a pre-application meeting with the Civil Aviation Authority.

Nimalasiri told The Sunday Leader Mihin Lanka must make a formal application with all necessary documentation to be considered for a provisional certificate.

BOI approval

Meanwhile earlier on October 12, 2006 Sajin Vaas signing as CEO Mihin Lanka but giving his address as the President's office sent an application to the Board of Investment of Sri Lanka to obtain BOI approval to operate an international and local airline/ cargo service in collaboration with the Secretary, Ministry of Defence, Commander Sri Lanka Air Force and the Secretary, Ministry of Finance.

 Chairman/Director General BOI,  Lakshman Watawala as quickly as the next day, and flouting all good practices, on October 13 sent Sajin a letter approving the application. (See The Sunday Leader of last week.)

What is alarming in this whole enterprise is a clause in the BOI approval letter which states that "The shares of the enterprise may be allotted or transferred to residents or non residents with prior written approval of the board. This will allow any person so far in the back ground to float an off shore company and later have shares transferred in his/her name(s). It would be a sweet retirement plan for a politician and would have been fully paid for by public funds making it the perfect scam.

It is in this backdrop that Rajapakse himself must be extra careful not to allow his government to be tainted by the actions of such habitual fraudsters as Sajin Vaas. Rajapakse may swaggeringly say in cabinet that he and his brothers will take on all and sundry but such blatant nepotism which will work in the alleyways of Beliatte are not likely to work in a civilised democracy in the long term.