{"id":142793,"date":"2015-04-14T00:00:35","date_gmt":"2015-04-13T18:30:35","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=142793"},"modified":"2015-04-23T23:06:42","modified_gmt":"2015-04-23T17:36:42","slug":"sri-lankan-airlines-rs-338-million-fraud-in-flight-duty-free-day-light-robbery-still-continues","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/sri-lankan-airlines-rs-338-million-fraud-in-flight-duty-free-day-light-robbery-still-continues\/","title":{"rendered":"Sri Lankan Airlines Rs 338 Million Fraud: In Flight Duty Free \u2018Day Light Robbery\u2019 Still Continues"},"content":{"rendered":"<p>The <a href=\"https:\/\/www.colombotelegraph.com\/?s=Weliamuna+report+&amp;x=9&amp;y=0\"><span style=\"text-decoration: underline;\">Board of Inquiry<\/span><\/a> into the misappropriations of Sri Lankan Airlines findings highlights a massive figure of US $ 865,398 that was written off by Sri Lankan Airlines due to a retrospective amended change made to the original contract signed between the national carrier and Phoenix Duty Free Services. However <a href=\"https:\/\/www.colombotelegraph.com\"><span style=\"text-decoration: underline;\"><em>Colombo Telegraph<\/em><\/span><\/a> reliably learns that this particular finding led the airline to lose a further monumental amount of US $ 2,596,198 over the subsequent next two years of 2013\/2014 &amp; 2014\/2015.<\/p>\n<div id=\"attachment_142795\" style=\"width: 192px\" class=\"wp-caption alignright\"><a href=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/Raju-Chandiram.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-142795\" class=\"size-full wp-image-142795\" src=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/Raju-Chandiram.jpg\" alt=\"Raju Chandiram\" width=\"182\" height=\"199\" \/><\/a><p id=\"caption-attachment-142795\" class=\"wp-caption-text\">Raju Chandiram<\/p><\/div>\n<p>The Board of Inquiries\u2019 findings revealed that the former CEO <a href=\"https:\/\/www.colombotelegraph.com\/?s=Kapila+Chandrasena&amp;x=10&amp;y=3\"><span style=\"text-decoration: underline;\">Kapila Chandrasena<\/span><\/a>, the former Chief Marketing Officer G.T. Jayaseeelan and Head of Finance Yasantha Dissanyake had submitted a board paper on the 26th September 2013 seeking the airline\u2019s Board of Directors to retrospectively amend the agreement seeking approval to write off a figure of US $ 865,398.<\/p>\n<p>This amendment which was approved and changed by the former Board of Directors for the financial year 2012\/2013 has now proved be a suicidal decision the former Board of Directors of the airline made as it affected the bottom line of the airline for the next two completed financial years of 2013\/2014 &amp; 2014\/2015.<\/p>\n<p>The report\u2019s highlighted loss of US $ 865,398 per annum was only for the initial contractual year ending 2012\/2013.<\/p>\n<p>This meant that with the guaranteed payment terms been defined on an ascending \u2018year on year\u2019 that amendment realistically affected the struggling airline a minimum of US $ 2,595,198, which is three times the said written off figure which should include the now completed financial years of 2013\/2014 and 2014\/2015 as well.<\/p>\n<p>With the now commenced 4th operational year of this contract in effect as of 01\/04\/2015, the airline is set to lose out at least another US $ 2 million in the next two years when the contract eventually expires.<\/p>\n<p>\u201cShould not this contract be immediately terminated as it is now proved to be the case where innocent tax payers monies are being robbed of in the broadest of day light?\u201d asked a rather disgruntled employee of the national carrier.<\/p>\n<p>The reason for the execution of what now seems to be a fraudulent \u2018business deal\u2019 from the beginning of this contract itself is that Phoenix Duty Free Services had agreed originally to pay a guaranteed fee to the airline per \u2018passenger\u2019 traveled as opposed to the sale of duty free carried out on board.<\/p>\n<p>It is reported that Phoenix Duty Free Services on signing the contract and after a year questioned the airline about the definition of a \u2018passenger\u2019 travelling on multiple sectors on a single journey.<\/p>\n<p>For example a single passenger travelling the journey from London to Mumbai would have to travel on two flights such as London\/Colombo and then onwards from Colombo\/Mumbai.<\/p>\n<p>The confusion lay in if this said passenger is counted as \u2018one\u2019 or \u2018two\u2019 for the \u2018Origin London\u2019 to \u2018Destination Mumbai\u2019.<\/p>\n<p>During the month of September 2012 a meeting was held at the Board Room of the Sri Lanka Airlines office at the World Trade Center where the then Chief Marketing Officer (CMO) G.T. Jayaseelan openly informed officials of both the national carrier and Phoenix Duty Free Services that a colossal count of an average of 37% of passengers who travelled on the entire Sri Lankan Airline network were classified as \u2018Origin to Destination\u2019 travellers and the passenger count was duplicated in their books.<\/p>\n<p>This open revelation by the CMO Jayaseelan led to the writing off of 37 % of the guaranteed payment that Phoenix Duty Free Services had to pay the airline.<\/p>\n<p>What has had many questioning the former Chairman <a href=\"https:\/\/www.colombotelegraph.com\/?s=Nishantha+Wickramasinghe&amp;x=11&amp;y=7\"><span style=\"text-decoration: underline;\">Nishantha Wickramasinghe<\/span><\/a> and CEO Kapila Chandrasena, the Board of Directors and the Phoenix Duty Free Services officials is if this was all part of greater well-orchestrated, strategically planned and execution of the perfect robbery of the national airline from day one of this signed deal?<\/p>\n<p>A disgruntled airline official went on to say \u201canyone with an ounce of a brain would come to the conclusion that the national carrier with seasoned airline professionals such as Chief Marketing Officer G.T. Jayaseelan, Head of Finance Yasantha Dissanayake and the former Board of Directors could not have missed something as elementary as this?\u201d<\/p>\n<p><strong>\u2018Who and who\u2019 benefited<\/strong><\/p>\n<p>It will now be interesting to find out as to \u2018who and who\u2019 benefited and continues to still benefit from this \u2018ongoing fraud\u2019 as most of the Senior Management Team of the airline and former Directors of the Board all went \u2018gaga\u2019 then about this \u2018unbelievable\u2019 contract that was offered initially to the airline, said a senior manager who did not wish to be identified. He is barred from officially talking to the media.<\/p>\n<p>Airline official also went on to say that due to the poor planning of the airline\u2019s Senior Management Team a shortage of \u2018Cabin Crew Supervisors\u2019 took place, where a huge total of 225 flights in August and 189 flights in September of 2013 departed Colombo without the carriage of duty free goods for sale on board.<\/p>\n<p>Phoenix Duty Free Services then went on to compile the passenger loads of this total of 414 flight doubling it to include the return sectors and based on the original contract, another colossal amount was written off by the airline for the failure on their part to carry duty free goods for sale on board.<\/p>\n<p>Other notable findings by \u2018<em>Colombo Telegraph<\/em>\u2019 is that the supply of the current Business Class toiletry kit branded \u2018Bvlgary\u2019 was offered to Raju Chandiram who was instrumental in submitting a sample to the Product Development Department of the airline and securing the deal without a tender been called for the supply of it. Currently that product is delivered to the airline through one of Raju Chandiram\u2019s Chinese contacts.<\/p>\n<p>One other openly violated practice of the existing contract is that the items purchased by Phoenix Duty Free Services using the Sri Lankan Airlines \u2018bar code\u2019 which in contractual agreed terms does not come directly from the supplier to the bonded warehouse in Katunayake but goes instead to a warehouse in Singapore.<\/p>\n<p>\u2018<em>Colombo Telegraph<\/em>\u2019 reliably learns that duty free goods such as alcohol, cigarettes and perfumes are widely known in the duty free circles to be fraudulently sold through what is known as \u2018cross border\u2019 sales otherwise known as the sale of \u2018black market\u2019 duty free goods to third parties.<\/p>\n<p>The five year contract with a possible further two year extension was originally signed by the former CEO Kapila Chandrasena and Manager In-Flight Services Rashmore Ferdinands representing Sri Lankan Airlines and CEO Dilan (Rumesh) Wirasinghe and Managing Director Raju Chandiram of Phoenix Duty Free Services.<\/p>\n<p>Rashmore Ferdinands one of the signatories of the now controversial duty free contract takes care of things for Phoenix Duty Free Services as an employee of the airline and continues to hold onto a lucrative Grade 10 Managerial position reaping the benefits of all the perks that comes with the post.<\/p>\n<p>Formerly the job Ferdinands now holds was entrusted to an employee who held a lesser Grade 9 post within the airline when the entire business of duty free purchase, warehouse and sale was completed by the national carrier.<\/p>\n<p>A member of the Flight Attendant Union (FAU) also complained verbally that during the first 18 months of the operation Phoenix Duty Free Services deprived the entire airline\u2019s staff of the contractually signed discount percentage.<\/p>\n<p>After a colossal loss and 18 months later it was rectified to what it should have been, where all staff now get a 25 % discount on all products purchased on board.<\/p>\n<p>\u201cI hope the Bribery Commission and Inland Revenue teams get on Raju Chandiram\u2019s case and investigate him and also arrest Dilan \u2018Rumesh\u2019 Wirasinghe whenever he comes down to Colombo. The new Chairman Ajit Dias and his team should attempt to recover our robbed monies from Phoenix Duty Free Services in the first 18 months. This amount blatantly stolen by depriving the staff of their due discount seems meager and has gone unnoticed due to the severity of the bigger amount of money that has been scientifically siphoned off the airline\u201d complained the FAU Member.<\/p>\n<p>The panel headed by anti-corruption advocate and senior lawyer J. C. Weliamuna has observed that in September\/October 2011, M\/S Phoenix approached the former Chairman Nishantha Wickramasinghe and the former CEO, Kapila Chandrasena, and submitted a proposal to outsource the Duty Free Services at SLA to M\/S Phoenix. The BoI also noted that the Srilankan airlines has never contracted with M\/S Phoenix before.<\/p>\n<p><a href=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_051.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter  wp-image-142807\" src=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_051.jpg\" alt=\"SLRF_Page_051\" width=\"640\" height=\"828\" srcset=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_051.jpg 1000w, https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_051-231x300.jpg 231w, https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_051-791x1024.jpg 791w, https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_051-800x1035.jpg 800w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/a><\/p>\n<p><a href=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_052.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter  wp-image-142806\" src=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_052.jpg\" alt=\"SLRF_Page_052\" width=\"640\" height=\"828\" srcset=\"https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_052.jpg 1000w, https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_052-231x300.jpg 231w, https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_052-791x1024.jpg 791w, https:\/\/www.colombotelegraph.com\/wp-content\/uploads\/2015\/04\/SLRF_Page_052-800x1035.jpg 800w\" sizes=\"auto, (max-width: 640px) 100vw, 640px\" \/><\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p> [&hellip;]<\/p>\n","protected":false},"author":22,"featured_media":142795,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,1,6969,2375],"tags":[],"class_list":["post-142793","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-colombotelegraph","category-news","category-popular-stories","category-stories"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.3 - 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