Airlines,Catering earned interest by REPO transactions - Witness | Daily News
Presidential Commission probing malpractices at SriLankan Airlines, SriLankan Catering Ltd and Mihin Lanka

Airlines,Catering earned interest by REPO transactions - Witness

SriLankan Airlines and SriLankan Catering earned Rs.93,027,803.84 as interest by the Repurchasing Transactions (REPO Transactions) with the Commercial Bank between April 2014 and January 2018, it was revealed yesterday (10).

Both companies had invested Rs.113,942,611,628.13 with the Commercial Bank under these transactions.

The Presidential Commission Inquiring into Frauds and Malpractices in SriLankan Airlines, SriLankan Catering Ltd and Mihin Lanka (Pvt) Ltd. met at the BMICH yesterday and the Back Office Branch Manager of Commercial Bank, Indika Sampath Wickremeratne testified before the Commission.

SriLankan Airlines, as an individual company has invested Rs.110,374,162,653.85 with the Bank between April 25, 2014 to January 2018 and earned Rs.60,248,188.79 as interest by 717 Repurchasing Transactions.

SriLankan Catering also had 805 Repurchasing Transactions with the same bank between May 30, 2014 and January 26, 2018 investing Rs.3,568,448,974.28 thereby earning Rs.32,779,615.05 as interest. According to the witness, there were no REPO Transactions between the Commercial Bank and SriLankan Airlines or SriLankan Catering before April, 2014.

The witness also told the Commission that there were four Bond transactions between the Commercial Bank and Sri Lankan Airlines. They took place in March 2014, the witness said. But, there had been no Bond transactions with Mihin Lanka (Pvt.) Ltd. or SriLankan Catering. Accordingly, the Bank had purchased Treasury Bonds worth Rs.2.25 Billion from the Airlines on March 13 and 18, 2014.

The first transaction between the bank and the Airlines took place on March 13, 2014 and the Airlines sold Bonds worth Rs.750 million to a settlement value of Rs. 813,509,250 at a yield rate of 9.05. The other three bonds worth Rs.750 million, Rs. 500 million, and Rs. 250 million were sold to the bank by the company on March 18 at a yield rate of 9.25, 9.30, and 9.30 respectively to a total settlement value of Rs.1,614,582,000. According to the witness, all these bonds were purchased by the bank following the due process and they were later sold to another 22 buyers by the bank.

The Commission also questioned the Vice President of the Treasury Division of the Nations Trust Bank, Tharusha Ekanayake yesterday.

The witness told the Commission that the Airlines sold three Treasury Bonds worth Rs.600 million, Rs.1,500 million, and Rs.350 million to his bank between August 21, and October 4, 2013 at the yield rates of 11.45, 11.48, and 11.58 respectively. Later, they were sold to another nine parties at the secondary market for Rs.2.45 Billion, he added. Senior State Counsel Dishna Warnakula led evidence. 


 

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