MiG fighter deal:

Ex SLAF Cdr grilled on purchase decision

by Dilrukshi Handunnetti

The Financial Fraud Investigation Division (FFID) is probing the extent of the loss suffered by the purchase of four MiG 27 Flogger D fighter-bomber aircraft in 2006, a deal struck without a performance bond and the vital End User Certificate.

Top police sources said, the FFID questioned Air Marshal Roshan Gunathilake on Friday for hours to ascertain the extent of financial loss to the country due to purchasing four MiGs, at a staggering US$ 14,676,000 for the four units.

In 2000, Gunathilake, while serving as chairman of the SLAF Technical Evaluation Commitee (TEC), had ruled against the purchase. However, the MiGs were purchased in 2006, during his tenure as SLAF Commander.

It is learnt that the former SLAF Chief was questioned on the basis of making such a purchase, overturning a previous decision, and aspects of the contract that were considered questionable and prima facie, unfavourable to Sri Lanka, the buyer.

The contract contained a stipulation that the End User Certificate be issued to a third party, Belimissa Holdings, a London-based company not registered with the British Ministry of Defence. Belimissa was authorised to collect the payments on behalf of the seller, Ukrinmash, a subsidiary of a Ukrainian State company named, UKRSPETSEXPORT of Ukraine.

It is learnt that Gunathilake was also asked about the purchasing of life-expired aircraft and the transfer of funds to a designated third party that offered no bank guarantee or performance bond.

The FFID had specifically raised the issue of failure to forecast financial loss, as the particular MiG 27 model was no longer in production, at the time of purchase.

A unit price in 2006 was US$ 2,462,000. Three out of the four MiG 27s purchased in 2006, had been ruled out by SLAF TEC in 2000 as being unsuitable but the rejected aviation products were offered in two different parts, in 2006. The FFID, it is learnt, had questioned the former SLAF Commander whether the credentials of Belimissa Holdings did not give rise to any concerns.

Police Spokesman, ASP Ruwan Gunasekara, confirmed the matter was under investigation and there would be a "two-pronged investigation", looking into local and international components of the procurement.