Airbus bribery scam takes new twist with SL Airlines filing legal claim
15 April 2021 07:39 am
The Airbus bribery scandal has taken new twist , with SriLankan Airlines is suing the company for $1 billion in compensation relating to bribery claims surrounding an order of six A330s, four A350s, and a further four A350s to be leased.
The amount is being sought in respect of damages, loss of reputation and the reimbursement of costs and interests. The issue stems back to the Crown Court judgement in the UK, which found Airbus guilty of bribery in relation to aircraft deals.
SriLankan Airlines Chairman Ashok Pathirage, confirmed that legal action has been instituted against Airbus SE.
The previous UNP Government cancelled the purchase of the four A350 aircraft, resulting in SriLankan Airlines paying a cancellation fee exceeding $ 98 million.
SriLankan Airlines is also seeking to cancel the outstanding delivery of four A350-900s and to claw back some $19 million in pre-delivery payments for these planes.
The outcome of the UK investigation led to the approval of a Deferred Prosecution Agreement (DPA) between the Serious Fraud Office of the UK and Airbus. Announced in January 2020, this included a settlement of some $4.3 billion, with proceeds to be split between France, the UK and the US.
Sri Lanka was just one of several countries alleged to have been impacted by the bribery scandal. The offenses spanned countries including Taiwan, Indonesia, Malaysia, Nepal, Russia, China and Colombia. Impacted airlines included the AirAsia Group, TransAsia Airways, Garuda Indonesia and the aviation arm of the Ghanaian government.
Specifically, Airbus was alleged to have offered a Brunei-based straw company some $16.84 million in bribes relating to contracts for widebodies for SriLankan Airlines.
This included six A330-300s, four A350-900s and a further four A350-900s to be leased. Reports suggest that only $2 million of the proposed bribe was ever paid.
Canceling the lease contracts for the four A350-900s cost the company $98 million in cancellation payments. TISL has noted that this is money that could have been used to pay for COVID vaccines for the Sri Lankan people. It estimated that some 24.5 million doses could have been imported for this value.
In the end, SriLankan Airlines took delivery of the A330s from the Airbus deal. However, it has long been attempting to wriggle out of the A350 purchase agreements, beginning the extrication process just two years after the deal was signed.
It has even attempted to switch these to purchase orders for A330neo aircraft, which are better suited for its operations, but the contract remains legally binding.It remains to be seen how far the company will get in pursuing Airbus for such a large amount of compensation.