Gotabhaya Rajapaksa Former Secretary Ministry of Defence

Former Defence Secy. Gotabhaya Rajapaksa in a press release today, explians the much talked about MiG deal, which surfaces in the media from time to time.  A Week-End English paper carried an article criticizing the Defence Secy’s conduct with regard to the puchase of the MiG 27 Fighter Air Crafts in 2006.

In a bid to explain to the public the real circumasances leading to the purchase of these Air Crafts and the procedures followed while purchasing them, the Defence Secy has relased these Press Releases to the Media, today (3rd June).

PRESS RELEASE

Last Sunday, it was reported in one Sunday newspaper and one news website that the FCID which was carrying out an investigation into the purchase and overhaul of several MiG-27 aircraft in 2006 during my tenure as defence secretary had discovered a secret bank account in the name of Bellimissa Holdings Ltd which had been opened in the British Virgin Islands just before the deal. This is hardly the first time that this so called ‘MiG deal’ has featured in the press. This topic has been discussed in the media on an off for the past nine years. Since the change of government, interest in this matter has been revived by our political opponents and I believe this is an opportune moment to explain to the public what this issue is about. All the documents mentioned in this press release have been submitted the District Court of Mt LaviniaClarification regarding the ‘MiG deal’

1. When the Chandrika Kumaratunga government bought two MiG-27 ground attack aircraft and one MiG-23 trainer aircraft in the year 2000, the contract for the supply of the planes was signed on 24 October 2000 with one T.S.Lee of DS Alliance of Singapore. Everyone knows that MiG aircraft are not manufactured in Singapore. The policy of our government was that arms would be purchased directly from the manufacturers so as to eliminate middlemen.
2. When our government decided in 2006 to purchase four MiG-27 aircraft and to get the three existing MiG-27 planes and one MiG-23 overhauled, we directly approached UKRINMASH the manufacturers of MiG planes in Ukraine. In the ‘letter of offer’ sent by UKRINMASH to the Ministry of Defence on 6 February 2006, it was specifically stated that this offer was being made in conjunction with a financier providing financing to the manufacturer and that the beneficiary of the letter of credit will be the financier. This formal letter of offer further said that they will inform us of the name of the beneficiary company within three days of signing the contract.
3. The UNP government of 2001-2004 had also made overtures to UKRINMASH for the supply of four MiG- 27 aircraft and in the letter of offer they had sent to the then Defence Minister Tilak Marapone on 22 April 2003, UKRINMASH had specified that the payment should be made to a finance company and that they will inform Sri Lanka of the name of the beneficiary company within three days of signing the contract. The method of payment laid out in the offer made to Mr Marapone is word to word the same as made to us in 2006.
4. Mr D.A.Peregudov a Director of UKRINMASH has written to the Sri Lanka Defence Ministry explaining that UKRINMASH is a fully state owned enterprise and that according to Ukrainian law, his establishment does not have the right to trade on credit terms and that they cannot offer credit facilities for two years as requested by us. Hence a financier by the name of Bellimissa Holdings Ltd would provide financing for the transaction.
5. When the contract was signed on 26 July 2006 for the supply of four MiG-27 aircraft and the overhaul of four other MiG aircraft, there were three signatories – the Commander of the Sri Lanka Air Force as the buyer, UKRINMASH as the seller and Bellimissa Holdings Ltd as the designated party which was to receive the payment. This is a legally binding contract under Ukrainian and international law between two government agencies in Sri Lanka and Ukraine.
6. Section 23.1 of this contract specified that the buyer and the seller are aware that Bellimissa Holdings Ltd shall be involved to provide financing to facilitate the transaction and that all payments under this contract including freight charges shall be paid to Bellimissa Holdings Ltd.
7. When the Invoice for the purchase and overhaul of the MiG aircraft was sent by UKRINMASH to the commander of the air force on 31 July 2006, it was once again specified that the Bank of Ceylon should open letters of credit in favour of Bellimissa Holdings Ltd.

When a state owned enterprise in a foreign country enters into a legally binding contract for the supply of aircraft, the buyer has to make the payment as the seller specifies. There was nothing secret about the payment being made to Bellimissa Holdings Ltd, because they too were a signatory to the legal contract. We purchased these MiG aircraft directly from the manufacturers in Ukraine, the payment was made, the aircraft was delivered, they were used in the war which was won and those aircraft are still in service. This puerile attempt by certain interested parties to establish the impression among the public that there was something ‘secret’ and underhand about the purchase of these MiG aircraft is a part of a long standing attempt to sully my name and to cast doubt on my integrity. Behind all this is also the project of trying to tarnish the war victory itself. I call upon the people of Sri Lanka not to be misled by the propaganda of interested parties who are trying to turn a lie into a truth by constantly repeating the lie.

Gotabhaya Rajapaksa
Former Secretary Ministry of Defence