FINANCIAL CHRONICLE – In a troubling development, Kapila Chandrasena, the former CEO of SriLankan Airlines and a primary suspect in a corrupt Airbus transaction, was discovered deceased early Friday morning (May 8) in Colombo, just days after being released on bail. According to police, his death followed a recent arrest warrant issued by the Colombo Magistrate Court due to alleged violations of his bail terms.
Chandrasena was taken into custody on March 12, accused of accepting bribes during his tenure as CEO of SriLankan Airlines and while leading the Procurement Committee responsible for the acquisition of Airbus aircraft. After enduring 54 days of questioning, he was granted bail on Tuesday (May 5). His arrest was the second within seven years related to a 2013 Airbus deal, which a British court determined involved Airbus paying $2 million to a shell company in Brunei linked to his wife.
This Airbus agreement is among several controversial dealings that occurred during former President Mahinda Rajapaksa’s administration, prompting extensive investigations since the British court’s findings. The investigation by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) had summoned Rajapaksa and his former Aviation Minister for statements regarding the Airbus deal on May 12.
During the investigation, local reports indicated that Chandrasena disclosed he had transferred Rs. 60 million from the $2 million bribe to Rajapaksa and an additional Rs. 20 million to the former Aviation Minister. However, in a later affidavit, he claimed that a senior CIABOC official pressured him to name the two politicians involved, threatening him with severe consequences if he did not comply.
CIABOC accused Chandrasena of conspiring with his wife and others to establish a shell company in Brunei, opening a bank account in Singapore, and receiving a substantial sum as a bribe from the European Aeronautic Defense and Space Company. The investigation revealed that he allegedly transferred the bribe to his own account in Australia and to various individuals, including the then Director General of SriLankan Airlines.
Chandrasena and his wife, Priyanka Wijenaike, were initially detained in February 2020 following the British court’s findings regarding the $2 million payment made to a company established in Brunei. The couple was eventually granted bail, although their passports were confiscated. Airbus subsequently agreed to pay approximately 3.5 billion euros in fines to multiple governments as part of a settlement over alleged bribery.
In March 2020, the Sri Lankan authorities launched an investigation into the Airbus deal, but no one was held responsible until the British court’s evidence surfaced. The slow progress of the investigation into the corruption scandal surrounding SriLankan Airlines underscores significant challenges within Sri Lanka’s legal and political frameworks.
Under President Anura Kumara Dissanayake, renewed efforts have been made to investigate the Airbus deal. The ongoing probe into alleged bribery and financial misconduct in aircraft procurement reveals systemic issues that hinder justice in Sri Lanka.
Taxpayers have borne the burden of the Airbus deal, as the government has continually subsidized the loss-making airline due to prior debts incurred from the overpriced aircraft purchases. In 2013, SriLankan Airlines signed contracts to acquire six Airbus A330-300s and four A350-900s, while also leasing four additional A350-900s. Subsequent inquiries have shown that Airbus engaged in corrupt activities to secure these contracts, offering substantial bribes, including $16.84 million to a company owned by Chandrasena’s wife.
The scandal gained international attention when Airbus settled corruption investigations in January 2020, admitting to bribery across various countries, including Sri Lanka. Following this revelation, Sri Lankan authorities initiated their investigations, leading to the arrest of Chandrasena and his wife in February 2020 for money laundering related to the Airbus deal. Despite their arrests, there has been little advancement in the legal proceedings.
Chandrasena’s death has raised pressing questions about the integrity of the ongoing investigations, particularly as the current government seeks to address stalled cases. Following the British court’s revelations, former President Gotabaya Rajapaksa had called for a thorough inquiry into the allegations involving the payment made to Chandrasena’s wife, but progress was hampered by the Covid-19 pandemic and subsequent economic challenges.
The U.S. State Department imposed travel restrictions on Chandrasena and his family concerning the Airbus deal. Additionally, in March 2021, SriLankan Airlines filed a lawsuit against Airbus for $1 billion, seeking compensation for damages, loss of reputation, and cancellation of the purchase agreement for the A350-900s. However, updates on this legal battle remain unclear, even under the new administration.
