An employee of Phoenix Duty Free Services emailed a rather feeble press release that they had carried in one of the local Sunday Newspapers titled “Phoenix Responds To Media Reports on Sri Lankan Airlines Duty Free” recently.

Raju Chandiram

What is rather shocking is that the contents in its entirety is one where Colombo Telegraph could refute each claim as with a copy of the contract in our possession and with concrete evidence in hand, it could be quite rightly stated that its former Chairman Tissa Dharmagunaratne who headed this operation at the inception, CEO Dilan Rumesh Wirasinghe and Managing Director Raju Chandiram are in a vain attempt in trying to cover their tracks in where the Board of Inquiries headed by Lawyer J.C.Weliamuna reported the fraudulent deal where innocent tax payers monies have now been stolen and still continue to.

Phoenix Duty Free Services goes on to say that in the first three years of its operation that Sri Lankan Airlines gained a net profit of Rs 1.1 billon. Nevertheless that figure should have been much higher as Phoenix fails to mention that as reported by Colombo Telegraph earlier, over USS $ 2.5 million was written off by the previous ‘Board of Directors’ of the airline as Phoenix cried foul that the Airline was duplicating its passenger figure count.

The writing off of this figure by the then Board of Directors, but more importantly amending the original contract after the first year’s operation resulted in a monumental figure of a minimum Rs 712 million which the airline lost that should have been added on to the profited figure of Rs 1.1 billion as claimed by Phoenix Duty Free Services.

The following story was described by one of Phoenix Duty Free Services’s very own current employees who revealed much more shocking details that should be information worthy for the new Board of Directors of the national carrier to further work on the ‘Weliamuna Report’ and investigating the expose further and scrapping this daily loss making deal immediately.

“Our Managing Director Raju Chandiram had it all covered from the beginning and least did he ever expect the government to change. We gave Sri Lankan Airlines an unbelievable contract that they could not refuse and in hindsight we were losing a considerable amount of money in our first year of operations in the five year mutually signed contract.

There was no hope in ever recovering from that initial year’s loss and even the Board of Directors felt something was initially fishy. But thanks to our MD Raju Chandiram’s contacts with Members of the Board of Directors, we were able to amend the signed contract between Phoenix Duty Free Services and the national carrier to suit us during the second year and have it back dated. Chandiram himself was a Director of the Board of Sri Lankan Airlines in 2008 when his good friend and current Minister of Foreign Affairs Mangala Samaraweera was a Minister in the Government.
Susantha Ratnayake was the biggest fish in the board that needed to be tackled. Fortunately our boss Chandiram’s ex-wife Otara Gunawardena of Odel fame’s Brother Ajith Gunawardena is a Director where Ratnayake is the CEO of John Keels Private Limited. On the other hand Ratnayake and Colombo’s Maharajah Palace’s Restaurateur Romesh Amerasekara who is MD Chandiram’s best friend are married to sisters. So through those two connections Susantha Ratnayake was able to be convinced. Fortunately Sanath Ukwatte another Director of the Board was also a close ‘chum’ of MD Chandiram. With these two in our pockets it was very easy thereafter to get absolutely anything approved as the former Chairman Nishantha Wickramasinghe and former CEO Kapila Chandrasena was also ‘on the take’ even before the contract was signed” said the Phoenix Duty Free Services employee.

“This business is huge and we have currently ventured out into three airlines which is Sri Lankan Airlines, Mihin Lanka and Air India where on paper we are incurring huge losses in all three businesses. However this business of ‘Duty Free’ is where there are other ways of making money” continued the Phoenix Duty Free Services employee.

“Over in the western part of the world, many companies that produce alcohol always do have a surplus of stock and through inside contacts within these alcohol producing companies, stocks are purchased on behalf of airlines and sold in the black market. Of these three airlines we do business with it is quite normal to make around US $ 1 million net profit a month. Tobacco products also fit in similarly. We need to incur this loss with the airlines anyway if we are to make such profit overall” the shocking news was revealed by this Phoenix employee.

The press release also goes on to say gross sales percentages are paid as commissions to duty free sellers and the catering staff as well. However what Phoenix Duty Free Services fails to fathom is that these figures were part of what they offered initially to secure the contract with Sri Lankan Airlines.

Sri Lankan Airline’s staff who seem disgruntled over this duty free deal have also gone on to state that it is against the contractual agreement for Phoenix Duty Free Services to send our goods to a ware house in Singapore after purchases are made “We just don’t have any idea if an extra stock of Duty Free items is purchased on our ‘bar code’” complained a national carrier employee.

Providing hardware and software to complete duty free sales on board is now the norm in their airline industry even though Phoenix Duty Free Services goes on to state that that cost is borne by them.

A close friend of the Phoenix Duty Free Services MD said “after Chandiram’s divorce from his wife Otara Gunawardena a few years back, he was absolutely destitute and was naïve, gullible and could be easily influenced. With no cent in his pocket he appeared to have struck gold from somewhere. A brand new KIA Optima was purchased for Rs 6.4million and within a short span his fleet increased to two, with the purchase of a brand new Audi A6 and his investments of purchasing a considerable amount of shares from ‘ODEL’ under the Phoenix Duty Free Services name quickly took place. His investments in the restaurant Chain ‘Urban Kitchen’, ‘Kema Sutra’ and retail store ‘K’ Zone were unbelievable as he claims he is not salaried through Phoenix Duty Free Service and therefore does not pay any taxes.” concluded his buddy.

This information provided by Phoenix Duty Free’s employee and a close friend of his is itself sufficient grounds for the Inland Revenue to swoop in and investigate as to how and where Chandiram’s new found wealth did appear. Leave alone the national carrier scrapping this deal and attempt in recovering monies off Phoenix Duty Free Services or from the corrupt previous Board of Director officials.

But many quarters say that with his good old friend and Sri Lanka’s Minister of Foreign Affairs Mangala Samaraweera by his side, Phoenix Duty Free Services MD Raju Chandiram is untouchable for now or so it seems.