News
Mihin CEO clueless about running an airline: Op. Director
The State-funded budget airline Mihin Lanka, inaugurated under the previous government in 2006, turned out to be a loss-making venture due to lack of proper administration headed by the then Chief Executive Officer (CEO) Sajin Vass Gunawardena, the Commission of Inquiry (CoI) Investigating Alleged Irregularities at SriLankan Airlines (SriLankan), SriLankan Catering (SL Catering) and Mihin Lanka (Mihin) was told this week.
Mihin’s former Director Operations, Captain Nihal Gunawardena, on Thursday, revealed how the then CEO Vass Gunawardena, without proper academic or professional qualifications, ran Mihin with his arbitrary, flawed decisions, which led to its eventual closure .
Following a newspaper advert calling for a of Head of Operations at Mihin Lanka, Capt Gunawardena said he was hired by the then CEO Vass Gunawardena, at a monthly salary of US$ 10,000 (over Rs 1 million) in December 2006.
Capt Gunawardena was tasked with the initialisation process of Mihin and to formulate a manual setting out its fleet operations and procedures in keeping up with international standards.
“During the process of securing Airlines Operations Certificate from the Civil Aviation Authority (CAA), I called the CEO and asked him for his qualifications, ‘Coordinating Secretary to the His Excellency the President’, he replied with a laugh. Thereafter, I called the CAA Director General inquiring about its legitimacy. He indicated that if the CEO is insisting on this ‘qualification’, then let it be like that,” Capt Gunawardena told the CoI, while emphasising that Civil Aviation regulations clearly stipulate that senior management officials should have sound knowledge and experience in the field.
In another instance, the then CEO Vass Gunawardena reportedly threatened a pilot when he refused to fly overtime at the end of his scheduled time.
The then CEO Vass Gunawardena decided to acquire an A321 aircraft on lease and kept it grounded for over 6 months while awaiting official clearance from the Indian Civil Aviation authorities to commence commercial trips to Mumbai, Thiruchi etc.
In the meantime, the then CEO Vass Gunawrdena re-modified the aircraft’s seating arrangements to facilitate trips to Bodh Gaya by local politicians, sans approval from the CAA for the rearrangement of the seats.
The Commission was told he even tried to take the then President Mahinda Rajapaksa to Rome on the same old aircraft, after engineers had found certain parts of the engine needed to be repaired and advised against flying the President. Capt Gunawardena said he had to intervene directly to ensure that the then President did not fly in that aircraft.
Capt Gunawardena’s testimony was led by Additional Solicitor General (ASG) Neil Unamboowe, assisted by State Counsel Sajith Bandara.
The Prosecution led by ASG Unamboowe concluded that Mihin incurred a loss of over Rs 300 million due to various financial misappropriations by its administration.
The CoI was also told that none of the Mihin Board of Directors (BoD) comprising Defence Secretary Gotabaya Rajapaksa, former Commander of the Sri Lanka Air Force, Roshan Goonetileke and Treasury Secretary Dr P.B. Jayasundara, had any previous experience in Civilian Aviation Management or Commercial Airline Services.
According to a Business Plan submitted by S.M. Chandrasekara, the airline was to start its operations with an initial capital funding of Rs 750 million for 6 months, and another capital investment equal to the initial investment was to follow in the next month, with Treasury approval. However, the CoI was told that the then CEO Vass Gunawardena was more interested in buying more used and old aircraft, which Capt Gunawardena vehemently opposed. “He was thinking of buying aircraft more than 10 years old, like buying reconditioned cars.”
An Airbus 320 was obtained under loose leasing terms on his own initiative sans approval from the BoD or informing Capt Gunawardena. The Lease agreement stated that US$ 2,250 would be paid per flying hour to the Leasing Co., which would pay the crew.
“I wasn’t happy the way things were done by Mihin’s management, particularly, when I was sidelined in its decision making process and the chain of command was broken with the arbitrary infusion of a non-designated official named Nihal Perera as Coordinating Secretary of the then CEO Gunawardena. We were informed that we had to follow the instructions given by him,” said Capt Gunawardena.
In April 2007, Capt Gunawardena resigned, citing difficulties in working with the then CEO Vass Gunawardena, as he took all Management decisions arbitrarily, without consulting other senior officials. The then CEO also circulated a misleading email among officials saying, “that all issues with Capt Gunawardena have been resolved,”
The CoI comprises retired Supreme Court Justice Anil Gooneratne (Chairman), Court of Appeal Judge Gamini Rohan Amarasekara, retired High Court Judge Piyasena Ranasinghe, retired Deputy Auditor General Don Anthony Harold and Sri Lanka Accounting & Auditing Standards Monitoring Board Director General Wasantha Jayaseeli Kapugama.
The CoI sittings are to continue tomorrow.