Mihin’s debt burden threatens to bury it

By Rohan Abeywardene

Managers of the grounded Government-owned budget carrier Mihin Lanka are threatening legal action against the airline for non-payment of their salaries for nearly two months along with many of its worldwide creditors who are owed millions of dollars.

Mihin management sources, however said they were hoping to make some part payment of the managers’ salaries as well as monies owed to creditors from next week from some VAT refunds and monies recovered from ticketing agents.

According to insiders the company’s internal accounts are in a chaotic state with hardly any proper records having been maintained by its so-called high- powered accounting division. Leaving aside the salary arrears of managers, the company has not remitted EPF and ETF payments for the last five months.

In addition to hundreds of millions of rupees owed to local creditors, sources said the airline owes millions of dollars to foreign countries and airports in unpaid flight fees, landing charges, ground handling fees and even unpaid fuel bills. Among the airports to which it owes massive sums is said to be Bangkok, Muscat, Dubai and Singapore.

They warned that even if the Sri Lankan Government manages to clear its current financial chaos by pumping in more State funds, it was unlikely to get credit from anywhere in the future and the Government will be forced provide it cash up-front for all its requirements.

Meanwhile the carrier’s newly appointed acting CEO Anura Bandara, who succeeded its former head Sajin de Vass Gunawardena blamed for most of its woes, is said to be looking at all possibilities to revive the carrier along with the possibility of even laying off its now redundant staff till such time some rescue package could be worked out.As a result of ad hoc decisions taken by the previous CEO, sources said most of the managers have been taken on very exorbitant salary packages, with one senior manager who is not even qualified for the post he is holding being given a remuneration package worth nearly one million rupees per month. One senior female manager who was a non-executive staffer earlier at SriLankan had been recruited here as a senior manager at five times the salary she had received at the national carrier.

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