3 December, 2020

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SriLankan Airlines In Violation Of Companies Act

By Rajeewa Jayaweera

Rajeewa Jayaweera

National Carrier SriLankan Airlines held its last Annual General Meeting (AGM) on Monday, 25 September 2017.

As per Section 133 (1) of the Companies Act, “The Board of a company must call an annual general meeting of shareholders once every calendar year. The meeting must be held within six months of the balance sheet date of the company and not later than fifteen months after the previous meeting.”

Firstly, the full calendar year of 2018 has passed without an AGM being held. Secondly, 31 March 2018 was the last Balance Sheet date, and the stipulated six months period lapsed on 30 September 2018. Thirdly, the fifteen months period since last AGM expired on 25 December 2018.

As per Section 167 of the Companies Act, “The Board is required to prepare an annual report of the company’s affairs during the accounting period ending at the last balance sheet date. The report must be prepared within six months after the balance sheet date and must be sent to all shareholders not less than fifteen working days before the annual general meeting.”

Six months period after the balance sheet date 31 March 2018 passed on 30 September 2018. At the time of going to the Press, no notification of an AGM has been received by shareholders. 

What is preventing the Chairman and Directors of the national carrier from publishing the annual accounts for 2017/18?  Why are they acting in contravention of the Companies Act by not holding an AGM? If unable to even keep the legally required AGM within the stipulated period, are the Directors competent to direct the affairs of SriLankan Airlines? 

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Latest comments

  • 2
    0

    Not only the Directors but the Chief Administrative Officer/Secretary is answerable.

  • 6
    0

    Like, how M Thatcher of UK did, by selling loss making making state enterprise for one pound, government could get ride off this white elephant to some local consortium to stop the humeraging of billions of rupees from the state coffers which could be put to better use for the poor people. If done that way, state could collect revenue from it by way of taxes, and it could bring multiple benefits for the country too, instead of state holding the tab for it’s survival. This never ending saga, and miseries to the country got to be stopped for the betterment of the people. The politicians and officials should take enough courage to get it done, it’s a business enterprise, it should be run and manage like a business, and the government couldn’t run business. Even, AirAsia was formed this way by selling to Tony Fernandez’s group, and it became a roaring success.

  • 2
    0

    Rajeewa Jayaweera raises the question ~ “What is preventing the Chairman and Directors of the national carrier from publishing the annual accounts for 2017/18?”
    Judging from PCoI on SriLankan Airlines leaks, we, the layLankans, know that SriLankan Airlines has not kept any accounts for about ten years.
    Rajeewa has studied the problems facing SriLankan Airlines and written extensively. Yet he raises this innocent sounding question. Was it tongue in cheek?
    .
    For about a decade till about 2008, the airlines was managed by Emirates. the airlines returned profits and was making a brand name. Late in 2007, the then President Mahinda Rajapaksa, on a private visit to London, demanded 35 passengers be off loaded to enable him and his entourage to fly back home. The then CEO Peter Hill just could not comply. Shortly afterwards, Mr Hill’s working visa and residence permit were withdrawn by the Sri Lankan authorities. Emirates departed.

  • 5
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    Spot on RJ. You are the only one who can share the true picture od the company. We have a board and two directors who are appointing CeOs, Ctos and CSDs at their whims and fancies, no proper recruitment policy. Due to pure ego the fakeCTO got a plane down and sitting on ground with rentals over half a million a month instead 100k delta. We also hear that he is bullying the CAA too.
    How can company leak material like ours? Where arw the governing structure and data protection? CS and the board must answer to these questions..
    We are all been bullied by these chief donkies and i know for fact that our next sim check is going to be challenge, but all these has to come to an end.
    No respect to any policies nor procedures at UL. Heil yahakajupalanaya.

  • 7
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    Couple of years ago I read an article that said , to keep Sri Lankan afloat every citizen of has to bear Rs 10,000 of its debt. I wonder, by how much it has increased. The management is riddled with people who has no idea what an airline business is. Further the aircraft’s are damn old and the service sucks. I flew last time and the tray table was inclined at an angle. The cabin crew was telling me to adjust. How the hell am I adjust when the damn tray is inclined or broken. For god’s sake, privatize this airlines. You are sucking blood of the poor of this country by means of indirect taxes to keep this white elephant afloat.

  • 2
    0

    The National Carrier of SL, whether it was Air Ceylon, Air Lanka or Sri Lankan, has always been a source of lucrative employment for those with ‘connections’, political or not. In recent years, it has become more political & just like other state enterprises, over staffed with highly paid employees, yet commercially uncompetitve, therefore, a burden to the tax payers of the country who have to fund a loss making enterprise for the sake of ‘national pride’.

    A BA steward, whom I happened to chat with whilst on holiday some time ago, told me that airline staff, particularly, in budget airlines, were relatively underpaid & overworked & was surprised to hear about perks such as free travel for employees & their families but a Sri Lankan Airlines employee I know, was given 2 year’s no ‘pay leave’ several times in the past few years so that he could stay with family in UK & even enjoyed unlimited free first / business class travel, if available, during that time. My employer makes a fuss if I ask for more than 10 days of continuous leave from my entitled annual 23 days of holiday but if Sri Lankan Airways can give more than a year of unpaid leave to employees, it is an indication of massive over staffing. It doesn’t take an economist to understand why the air line is failing. Naturally, a loss making business would always try to ‘massage’ the figures in financial statements or even hide financial reports if they can get away with it. At a time of austerity for most Sri Lankans, it’s time the govt. took stock of failing Govt, enterprises.

  • 1
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    I enjoy RJ’s writing on SriLankan Airlines . He knows a thing or two about this loss making Airline. Sadly on the day when Sri Lankan management agreed to pay ( UL) USD salaries to its agitating and unreasonable pilots , the downward spiralling of the entity began. They should have like Singapore’s Lee Kuan Yew did, threaten to close the Airline.
    UL can only salvage its name by a sell out OR closure. It will never ever get out of the rut. God bless Sri Lanka !

  • 1
    0

    The rot commenced when MR fired the Emirates CEO of Air Lanka long ago for not cancelling a fully booked flight to accommodate himself and minions to return from
    UK.
    Locals then took over and air travel became costly for citizens and beneficial for political minions.
    Now even AGMs are postponed as corruption, mismanagement & wastage would be exposed.
    If we cannot run an airline, how can we run a government?
    The surprising thing is that those responsible are never fired, but prosper.

  • 1
    1

    the only solution for the airline to survive is to close and open with. new top management and the. graded. staff. with a low salary structure

    • 0
      0

      lucky,
      If you mean “golden handshakes”, this was suggested earlier & rebuffed.
      No one wants to leave a ‘gold mine’ yielding remuneration including transport daily from homes, luxury accommodation here and abroad,
      salaries which are rupee equivalents of dollar salaries abroad, and paid leave.
      No other public servants, who too can work abroad, are paid like this.

  • 0
    0

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  • 2
    0

    I will never travel on SriLankan and I will tell you fellas why.

    Once I asked for JW Double Black and they refused. You fellas should understand that I only fly Business Class and I have never flown 3rd class in the last 15 years or so.

    Another time, they lost my baggage. When it was time for them to compensate for my losses, they asked me the contents. I said there were 4 Gold watches, 2 bottles of
    Hardy Privilege Cuvee Benedict Cognac, a bag of Trail mix among others. The total value of good I put down as $42,000. They just compensated me $200.

    Finally, once I was travelling from Colombo to London, I explicitly asked a stewardess to meet me in my Hotel room in London as I was stopping in London for a few days. She complained to her manager like a cry baby and the manager came and spoke to me about sexual harrasment this and that nonsense.

  • 0
    0

    The reason it is impossible to sell SriLankan.

    – Aircraft are leased at above market rates on 12 year leases without a termination clause.

    – 4 A350 still on order from airbus. $800 million still due according to the local papers. Again appears that there is no termination clause.

    This represents several BILLION dollars in forward liability. Even if someone bought the Airline for a dollar they would be taking on 2 BILLION dollars plus in liabilities.

    This is why the GOSL has not been able to sell the Airline. Nobody will touch this.

    For the good of the country this needs to be shut down asap!

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