FINANCIAL CHRONICLE – Authorities in Colombo reported the death of Kapila Chandrasena, the former CEO of SriLankan Airlines and a primary suspect in a controversial Airbus bribery case, on Friday morning (May 8). This incident occurred shortly after he was released on bail.
Chandrasena was arrested on March 12 for allegedly accepting bribes during his tenure as CEO of SriLankan Airlines and as the head of the Procurement Committee responsible for acquiring Airbus aircraft. He had been in custody for 54 days prior to being granted bail on May 5. His death came just a day after a Colombo Magistrate Court issued an arrest warrant due to alleged violations of his bail conditions.
The case against him stems from a corrupt deal involving Airbus in 2013, which a British court revealed had implicated the French aircraft manufacturer in a payment of $2 million to a shell company established in Brunei in the name of his wife. This Airbus deal is among the numerous controversial transactions that occurred during the administration of former President Mahinda Rajapaksa, prompting extensive investigations in light of the information brought to light by the British court.
Additionally, the timing of Chandrasena’s death coincided with the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) summoning former President Rajapaksa and his aviation minister to provide statements regarding the Airbus contract.
Reports surfaced earlier this year indicating that during investigations, Chandrasena disclosed having transferred Rs. 60 million from the $2 million bribe to Rajapaksa, alongside Rs. 20 million intended for the then-Aviation Minister. However, in a subsequent affidavit, he claimed that a senior CIABOC official urged him to expose the politicians involved and even threatened him with dire consequences should he fail to comply.
The CIABOC had alleged that Chandrasena, in collaboration with his wife and others, established a shell company in Brunei, opened a bank account in Singapore under that company’s name, and received approximately EUR 1.45 million in bribes from Airbus. The funds were reportedly funneled into his personal account at the Commonwealth Bank of Australia and distributed to various parties, including the then-Director General of SriLankan Airlines.
Chandrasena and his spouse, Priyanka Wijenaike, initially faced remand in February 2020 following the British court’s findings regarding the $2 million payment to their shell company. Throughout his tenure as CEO from July 2011 to February 2015, during Rajapaksa’s second term, allegations of misconduct persisted, with court documents indicating that his wife acted as an intermediary in the procurement of Airbus aircraft, with a bribe offer amounting to $16 million.
Last year, the Criminal Investigation Department (CID) of Sri Lanka’s police interrogated Namal Rajapaksa, son of the former president, regarding allegations of receiving a commission from the Airbus deal during his father’s administration. He was questioned for over four hours based on testimony from a state witness, who claimed to have facilitated cash transfers linked to the deal. Namal Rajapaksa has denied these allegations, asserting that the current government is attempting to link all unexplained wealth cases to the Rajapaksa family.
International and local investigations have highlighted significant bribery and financial misconduct related to the 2013 Airbus transaction. The arrest orders for Chandrasena in 2020 followed disclosures in UK court documents detailing payments to his wife’s company under the Airbus sales contract.
The legal consequences have been limited despite Airbus agreeing to pay approximately 3.5 billion euros in penalties to the governments of France, the UK, and the US as part of a settlement concerning bribery allegations worldwide, including in Sri Lanka. Investigations into the Airbus deal were initiated during the presidency of Maithripala Sirisena, yet no accountability was established until the end of his tenure in 2019.
The protracted nature of the investigation into the SriLankan Airlines-Airbus corruption scandal, despite compelling evidence, underscores the challenges facing Sri Lanka’s legal and political frameworks. Under President Anura Kumara Dissanayake, there has been renewed pressure for a thorough investigation into the Airbus dealings.
The investigation into the Airbus deal, which involves allegations of bribery and financial irregularities, illustrates systemic corruption that hampers justice and accountability in the nation. Taxpayers have been adversely affected, as the government continues to subsidize the financially struggling airline due to debts related to the overpriced Airbus purchases.
In 2013, SriLankan Airlines agreed to procure six Airbus A330-300s and four A350-900 aircraft while leasing an additional four A350-900s. Investigations later disclosed that Airbus engaged in corrupt practices to secure these contracts, allegedly offering bribes amounting to $16.84 million to a company owned by Priyanka Wijenaike. A portion of this sum, specifically $2 million, was transferred to the company’s Singapore account in December 2013.
The scandal gained international attention in January 2020 when Airbus settled corruption probes with authorities in various countries, including the US, UK, and France, admitting to bribery in several jurisdictions, including Sri Lanka. Following this, Sri Lankan authorities launched investigations that resulted in the arrests of Chandrasena and his wife in February 2020 on accusations of money laundering related to the Airbus affair. However, advancements in the legal proceedings have been minimal since their release on bail in March 2020, and their subsequent arrests this year marked another halt in the case’s progress.
This stagnation has prompted serious concerns regarding the efficiency of Sri Lanka’s judicial processes and the potential influence of political and institutional factors on high-profile corruption cases. The political environment in Sri Lanka is often marked by complex networks of patronage, leading to interference in legal proceedings involving individuals connected to influential political figures.
The recent demise of Chandrasena has intensified scrutiny of the Airbus scandal as the current government seeks to advance stalled investigations. Following revelations from British court documents regarding his involvement, then-President Gotabaya Rajapaksa had called for a comprehensive inquiry into the allegations surrounding the $2 million payment to the former executive’s wife. However, progress was hindered by the COVID-19 pandemic and subsequent economic challenges.
The US State Department had previously imposed travel restrictions on Chandrasena and his family due to their involvement in the Airbus case. In March 2021, SriLankan Airlines filed a lawsuit against Airbus for $1 billion, claiming damages, loss of reputation, and reimbursement of costs, alongside seeking the cancellation of the A350-900 Purchase Agreement and the return of a $19 million advance payment. Nonetheless, updates on this legal matter remain undisclosed under the new administration.
