Why The Mihin Moguls Should Be Punished

  • strict warning: Only variables should be passed by reference in /home1/unboweda/public_html/profiles/prosepoint/modules/date/date/date.theme on line 255.
  • strict warning: Only variables should be passed by reference in /home1/unboweda/public_html/profiles/prosepoint/modules/date/date/date.theme on line 260.
  • strict warning: Only variables should be passed by reference in /home1/unboweda/public_html/profiles/prosepoint/modules/date/date/date.theme on line 261.
  • strict warning: Only variables should be passed by reference in /home1/unboweda/public_html/profiles/prosepoint/modules/date/date/date.theme on line 255.
  • strict warning: Only variables should be passed by reference in /home1/unboweda/public_html/profiles/prosepoint/modules/date/date/date.theme on line 260.
  • strict warning: Only variables should be passed by reference in /home1/unboweda/public_html/profiles/prosepoint/modules/date/date/date.theme on line 261.
  • strict warning: Non-static method view::load() should not be called statically in /home1/unboweda/public_html/profiles/prosepoint/modules/views/views.module on line 843.
  • strict warning: Declaration of views_plugin_display::options_validate() should be compatible with views_plugin::options_validate(&$form, &$form_state) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/plugins/views_plugin_display.inc on line 0.
  • strict warning: Declaration of views_plugin_display_page::options_submit() should be compatible with views_plugin_display::options_submit(&$form, &$form_state) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/plugins/views_plugin_display_page.inc on line 0.
  • strict warning: Declaration of views_plugin_display_block::options_submit() should be compatible with views_plugin_display::options_submit(&$form, &$form_state) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/plugins/views_plugin_display_block.inc on line 0.
  • strict warning: Declaration of views_handler_field_broken::ui_name() should be compatible with views_handler::ui_name($short = false) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/handlers/views_handler_field.inc on line 0.
  • strict warning: Declaration of views_handler_argument::init() should be compatible with views_handler::init(&$view, $options) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/handlers/views_handler_argument.inc on line 0.
  • strict warning: Declaration of views_handler_argument_broken::ui_name() should be compatible with views_handler::ui_name($short = false) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/handlers/views_handler_argument.inc on line 0.
  • strict warning: Declaration of views_handler_sort_broken::ui_name() should be compatible with views_handler::ui_name($short = false) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/handlers/views_handler_sort.inc on line 0.
  • strict warning: Declaration of views_handler_filter::options_validate() should be compatible with views_handler::options_validate($form, &$form_state) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/handlers/views_handler_filter.inc on line 0.
  • strict warning: Declaration of views_handler_filter::options_submit() should be compatible with views_handler::options_submit($form, &$form_state) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/handlers/views_handler_filter.inc on line 0.
  • strict warning: Declaration of views_handler_filter_broken::ui_name() should be compatible with views_handler::ui_name($short = false) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/handlers/views_handler_filter.inc on line 0.
  • strict warning: Declaration of views_handler_filter_node_status::operator_form() should be compatible with views_handler_filter::operator_form(&$form, &$form_state) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/modules/node/views_handler_filter_node_status.inc on line 0.
  • strict warning: Declaration of views_plugin_row::options_validate() should be compatible with views_plugin::options_validate(&$form, &$form_state) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/plugins/views_plugin_row.inc on line 0.
  • strict warning: Declaration of views_plugin_row::options_submit() should be compatible with views_plugin::options_submit(&$form, &$form_state) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/plugins/views_plugin_row.inc on line 0.
  • strict warning: Non-static method view::load() should not be called statically in /home1/unboweda/public_html/profiles/prosepoint/modules/views/views.module on line 843.
  • strict warning: Declaration of views_handler_filter_boolean_operator::value_validate() should be compatible with views_handler_filter::value_validate($form, &$form_state) in /home1/unboweda/public_html/profiles/prosepoint/modules/views/handlers/views_handler_filter_boolean_operator.inc on line 0.
  • strict warning: Declaration of views_plugin_style_default::options() should be compatible with views_object::options() in /home1/unboweda/public_html/profiles/prosepoint/modules/views/plugins/views_plugin_style_default.inc on line 0.
  • strict warning: Non-static method view::load() should not be called statically in /home1/unboweda/public_html/profiles/prosepoint/modules/views/views.module on line 843.
Sunday, September 28th, 2008

The collapse of the Rajapakse Administration's budget airline, Mihin Lanka, was predicted on the very day the bizarre idea was mooted. The airline was the brainchild of Sajin Vass Gunawardena, a 'businessman' of dubious repute hardly known to the world of finance and commerce until he shot into the limelight as Mahinda Rajapakse's principal sidekick and bag-carrier. The only background he had in running an airline appears to have been that his brother was a middle-level manager at SriLankan Airlines. Having run Mihin to the ground and squandered three billion of your rupees and mine, Brother Sajin took a parachute and jumped out of the crashing airline. Or maybe he was pushed. As for Brother Manoj, he was made CEO of SriLankan, which has by his own admission lost a staggering Rs. 5 billion since. The Vass Gunawardenas, it seems, have a knack for failed business and losing money - other people's money, of course.

Mihin Lanka was designed to be little more than an ego trip for Mahinda Rajapakse. Bloated with the power he had suddenly acquired after his man was elected President, Sajin evidently sweet-talked an equally eager - if naive - Head of State that nothing could be grander than an airline named after himself. In doing so, he had clearly pressed the right buttons. After all, had they named it Leader Air, we might have been so vain to have derived some slight satisfaction from the gesture. But to Mahinda Rajapakse's small-town mindset, Mihin was a symbol of the good life to which he had suddenly ascended: the President took to trotting the world in Mihin aircraft, with a sundry assortment of friends, relatives and petty officials gawking out of every porthole. By catering directly to Rajapakse's rapidly inflating ego, Sajin had clearly struck gold or, at any rate, fool's gold.

Treasury Secretary, P. B. Jayasundera bent over backwards to curry favour with the Rajapakses by giving the airline a blank cheque. Excesses of presidential ego were, after all, nothing new to him. He had done just as good a job in licking into shape the ego of Rajapakse's predecessor, Chandrika Kumaratunga. She too, was known to hijack aircraft from SriLankan's fleet, laying to waste  its schedules and the convenience of its paying passengers, for her bouts of globetrotting. Thus, while he should have known better, PBJ not only mobilised the start-up capital for the new airline, but himself took a seat on its board of directors. He was in good company: on either side of him were Gotabaya Rajapakse and Lalith Weeratunga, whose collective entrepreneurial experience added up to little more than his own, viz., zero.

After all it was Gotabaya himself who signed the application seeking BOI approval for Mihin as its Founder Chairman. Curiously this habit of forming private companies by a government wedded to socialism is not without its moments of intrigue. From Lanka Logistics and Technologies to Mihin to Rakna Arakshaka Lanka, a firm seeking to monopolise the private security market, it is Gotabaya Rajapakse who has been a mover and shaker in the scheme. A happy scheme where there is no oversight by parliament or the Auditor General. Little wonder then they have been able to make merry at public expense and then bail out when the going got tough.

When the Rakna Arakshaka case came up in court it was none other than Chief Justice Sarath N. Silva who questioned in open court how it was that the Defence and Finance Secretaries formed a private security company for duties that should have been performed by the army or police. The Chief Justice also questioned how ministry secretaries could serve upon the boards of companies such as Rakna Arakshaka. "How can a secretary of a ministry serve in a business venture in another capacity?" And questions are coming fast and furious from the country's foremost judicial officer as President Mahinda Rajapakse goes head to head with the judiciary even calling for a probe on Justice Marsoof's exemplary comments on the Constitutional Council. (See Pot Shots and Political column.)

Goodness knows what went on at the board meetings of these private companies maintained at public expense then, though one can almost picture the trio squinting through their bifocals as they struggled to count the mounting zeros on the debit side of the balance sheet.

It was Sir Richard Branson who famously said that he did not know the difference between 'gross' and 'net' until he had made his first billion pounds, and even then had to visualise the fish remaining in a net to remember that 'net income' was what you had left after expenses had been deducted from gross income. Branson, however, knew from a very early age the difference between 'profit' and 'loss.' That, sadly for us all, was a distinction that appears to have eluded the triumvirate that ruled Mihin until the lessors of its two aircraft swooped in one day and flew off with their assets.

Now, last week, Power and Energy Minister Mahindananda Aluthgamage admitted that Mihin had crashed because of mismanagement. Who were its 'managers?' Gotabaya Rajapakse, Lalith Weeratunga, Sajin Vass Gunawardena and P. B. Jayasundera. With this ministerial admission of their culpability now on record, it is only a question of time before a public-spirited citizen such as Nihal Amarasekera, or Vasudeva Nanayakkara, seeks their accountability also before the law.

Now, according to another presidential sibling, Aviation Minister Chamal Rajapakse, plans are being drawn up to raise Mihin from the ashes in the form of a domestic and regional airline, with talk of flights to Ampara (presumably to bring back the refugees). There is also talk of buying new aircraft from China. With that decision already taken, it is clear that these multi-billion dollar purchases will be made outside tender procedure (there is, after all, only one Chinese manufacturer), on the infamous so-called 'government-to-government' basis that has now become notorious as an euphemism for corruption on the grandest of scales.

China it would seem has become, together with such countries as Iran, Pakistan and Burma the flavours of the times for the Rajapakse regime desperately looking for birds of the same feather and similar laxity on human rights issues.

And it is transparency that is the first casualty in such ventures as bases for selection is dispensed with. It is perhaps a silly question to even ask if middlemen and local agents are involved in such lucrative purchases. One recalls the scandal surrounding the Airbus deal during J.R. Jayewardene's watch. And like everything else all the blunders of the government, economic, social and military will likely be swept under the 'national security' and 'fighting the war' carpet.

Before the resurrection of Mihin is mooted therefore, we would like to know what action is contemplated against those who mismanaged public funds to the tune of billions, as the government has now finally been forced to admit. Where did this money come from? People's Bank, Bank of Ceylon and the Lankaputhra Bank for starters: in other words, public money. The consequences of bad lending practices by US financial institutions has created the current slump the world is now seeing, with sums in the range of $700 billion to one trillion being mentioned as the cost of revival. Despite that having occurred in the private sector, the FBI has already launched an investigation to determine whether criminal culpability exists.

Ajith Nivard Cabraal, a chartered accountant to boot, it appears is not looking askance as he very well should be. At the helm of the foremost regulatory body, the Central Bank Governor seems to have focused little on the lending practices of these state banks. Former Treasury Secretary P.B. Jayasundera an original director of Mihin not to mention Lanka Logistics and later Chairman of SriLankan Airlines up until his resignation, also sat as a member of the Monetary Board. And in the process conflicting every interest from Colombo to Vladivostok.

Be that as it may, here in Sri Lanka, a harebrained scheme that was doomed from the start has succeeded in losing upwards of three billion rupees in public funds, with mismanagement having been admitted, and what is the upshot? "Oh, we will start again, with more public funds, and this time will try to do better, but with the same bunch of mutts."

What is most shocking about Mihin was the rank amateurishness with which it was operated. Then again, given that its board comprised rank amateurs, what was to be expected? Last week the government rather coyly admitted that the airline had never possessed a corporate plan ('Aey mokadda, bung?' you almost hear them whisper to one another). What the public would like to know is, how come the Treasury and the Cabinet approved this massive government spend sans a corporate plan? What was Treasury Secretary P. B. Jayasundera, the chief accounting officer of government finance, thinking? That all this would never come out? True, like Sajin Vass Gunawardena, he too, has now resigned under pressure. But the door to the cupboard full of skeletons he leaves is now ajar, and he should not be allowed to escape without being called upon to account for every one of them.

The collapse of Mihin hits our collective purse harder still. It now transpires that the airline went belly up leaving a 645-million rupee debt to the Ceylon Petroleum Corporation in unpaid fuel bills. This translates to about Rs 7,000 being added to the fuel bill of every motorist in Sri Lanka. What the public would like to know is, how come this colossal debt was allowed to amass? How come, at a time in which micro-credit to rural farmers has dried up, a bankrupt airline was given interest-free credit, amassing debts that everyone knew could not be paid? Now, the people are being called upon to pay this off through inflated diesel, petrol and kerosene prices, and the CPC insists it will not reduce these in keeping with the sharp decline in fuel prices in the world market in recent months. Again, it is we the people who have to pay for the bungling or worse of PBJ, Gotabaya and the rest of the band of incompetent Rajapakse hangers-on and cronies who precipitated this crisis, to say nothing of CPC Chairman Asantha de Mel, another hanger-on of the Rajapakse clan. No golden parachutes for them: they are on platinum rockets, climbing higher still in their avaricious plunder of the life-savings of Sri Lanka's masses.

Now there is talk of P. B. Jayasundera, already convicted in one case and against whom other cases are yet pending, being rewarded for his incompetence (or worse) with an appointment as a presidential adviser or even a posting as special envoy to Iran. Nothing could insult the intelligence and dignity of the people of Sri Lanka more than to see delinquents (we choose the mildest epithet the lexicon offers) not only getting away with impunity, but being promoted for squandering the public wealth. Au contraire, Mr. President.

Scoundrels such as these must be made to bear the full brunt of the law. The people of Sri Lanka can but hope that a public spirited  citizen will institute legal action not only against the board of Mihin Air for mismanagement, but also the heads of the state banks and CPC for recklessly lending money to a venture that was from the start little more than a patent scam. Most importantly, the principal villain of the piece, without whom none of this would have been possible, must be called to account for his actions.. Allowing him to go scot-free will not only be a slap in the faces of the people of this country, but send a message to every public servant that public funds are theirs for the taking.