The anatomy of the MiG deal | Sunday Observer

The anatomy of the MiG deal

6 January, 2019

In 2007, journalist Lasantha Wickrematunge published a series of exposes about a murky arms procurement that has since come to be known as the ‘MiG deal’. The articles resulted in Lasantha and his newspaper being sued for defamation over his reporting on the alleged involvement of then Defence Secretary Gotabaya Rajapaksa in the transaction involving mothballed MiG-27 bombers in Ukraine. Friends and family have long suspected that the reporting and legal battle may have cost the outspoken journalist his life.

Years later, FCID investigations have vindicated The Sunday Leader editor, proving his reporting was factually accurate down to the tiniest detail, even though the fearless reporter never got his long awaited day in court to face off against the country’s most powerful man

In 2000, the Chandrika Kumaratunga Government awarded two tenders for the purchase of six MiG-27 bombers to Singapore-based arms dealer DS Alliance, which was represented by its director ‘Lee Thian Soo’, who went by the name ‘T.S. Lee’.

Under the contracts between the Sri Lanka Air Force and DS Alliance, the latter would acquire the aircraft from Ukrainian state-owned arms exporter Ukrinmash and resell them to the Air Force, at a price of approximately US $1.2 million each.

Udayanga Weeratunga and Gotabaya Rajapaksa

Half these aircraft were ill-fated. One crashed, months after it was acquired, in August 2007 near the Katunayake airport, killing its Ukrainian pilot. A second was damaged, and a third destroyed, when the LTTE attacked the Katunayake airport in 2001.

By January 2006, the Air Force Commander, Air Vice Marshal Donald Perera had placed on record that the air force should give up on MiG-27 aircraft and modernise its fleet by considering options available from several other countries, including the United States and Israel. The following month, however, the Commander was to make a u-turn, following a sudden meeting summoned by Defence Secretary Gotabaya Rajapaksa.

That meeting, held at the Defence Ministry on February 6, 2006, was for Rajapaksa’s cousin, Udayanga Weeratunga, and his business associate Dmytro Peregudov of Ukraine, to pitch MiG-27 aircraft to the air force once again. The Air Force Commander listened intently, but shared his concerns borne from bad experiences in dealing with DS Alliance, who had supplied the earlier aircraft. Weeratunga gave an assurance that DS Alliance would be left out of the equation, after which the Air Force Commander was urged to reverse his previous stance and accept a proposal from Peregudov and Weeratunga.

When Perera took the Peregudov-Weeratunga proposal to air force officers the following day, he was immediately advised of a procedural issue. Since the proposal was ‘unsolicited’, the air force was stymied from accepting it without following the standard government procurement procedure. Under pressure, Donald Perera resolved the impasse by issuing a comical letter to Peregudov, dated 7 February 2006, requesting to receive the proposal that he had been handed the previous day in the Defence Secretary’s office. Thereafter, a ‘tender process’ was sparked off, a committee was appointed to evaluate the proposal to purchase the MiG aircraft pitched by Peregudov, without any call for competing bids from competitors. Indeed, the air force used an expedited procurement procedure that bypassed the need to call for competing bids on the basis that the proposal was ‘government-to-government’ originating directly from a Ukraine state-owned entity, Ukrinmash.

The contract that was ultimately signed between the Air Force and Ukrinmash, in June 2006, was not one between governments, but one that stipulated that all payments – eventually amounting to almost US $15 million – were to be made to a mysterious third-party named ‘Bellimissa Holdings Limited’, for which a London address and fax number were given on the contract.

In December 2006 it was exposed by the Sunday Times that the MiG aircraft purchased through ‘Bellimissa Holdings’ by the Rajapaksa regime had cost US $2.4 million per plane, or double the price paid six years earlier per aircraft under the Kumaratunga regime.

In July 2007, Lasantha Wickrematunge and The Sunday Leader blew the deal wide open, by exposing that there had never been any ‘Bellimissa Holdings Limited’ registered in the United Kingdom, and that the address and fax number provided to the air force were ghost forwarding services.

In the weeks following Wickrematunge’s exposè, the Defence Ministry, and Secretary Gotabaya Rajapaksa in particular, rose to defend the MiG deal, asserting that the aircraft they had purchased had a much longer lifespan than those acquired in 2000, and denying the existence of a third-party in the transaction. Rajapaksa even went so far as to say he had no knowledge or involvement with the deal. Then, in September 2007, Wickrematunge and The Sunday Leader struck again and filled in the gaps, exposing February 6, 2006 meeting chaired by Rajapaksa, at which the MiG deal began, and detailing the involvement in the deal of Udayanga Weeratunga, who by then had been appointed President Mahinda Rajapaksa’s Ambassador to Russia and the Ukraine. The Defence Secretary then threatened to sue Wickrematunge in the District Court of Mount Lavinia, demanding Rs. 1 billion in damages. Wickrematunge responded by threatening to countersue the Defence Secretary for Rs. 2 billion in damages. The editor’s lawyer explained the higher damages he would seek from Rajapaksa as follows: “My client’s estimate of damages will be greater than that of your client since my client has always remained in this country and worked for its betterment and your client has voluntarily left this country and migrated to the United States of America and taking citizenship in that country by swearing allegiance to that country.” Eventually, Rajapaksa did file defamation action against The Sunday Leader.

Lasantha Wickrematunga was murdered shortly before the case was to come up for trial, and never had his day in court. Ownership of The Sunday Leader changed hands, and the new owners settled the defamation suit with Rajapaksa by withdrawing their articles and tendering an unconditional apology. Since the FCID began investigating the deal in 2015, it has come to light that the infamous ‘Bellimissa Holdings’ was a shell company in the British Virgin Islands that was all along owned by ‘T.S. Lee’ and the DS Alliance cabal.

Their bank account was traced by FCID to Singapore, to the same bank as DS Alliance. A parallel Ukrainian investigation into the MiG deal has revealed that the Ukrainian government never was a party to the MiG deal.

The aircraft that arrived in Sri Lanka in 2007, it turns out, were sold by Ukraine to DS Alliance for less than US $1 million each, with the middle men more than doubling the price they charged the Sri Lanka Air Force and pocketing the remaining US $1.4 million per aircraft. Several air force officers interviewed by the FCID have made it clear that despite breathless denials and a defamation settlement, there would have been no MiG deal without Gotabaya Rajapaksa and Udayanga Weeratunga. Based on the evidence collected so far from several jurisdictions and with the assistance of Interpol and the CID, the FCID has secured the arrest of Udayanga Weeratunga, who was in hiding outside Dubai.

The former Ambassador now awaits extradition to his home country. As the FCID net grows wider and wider, it is only a matter of time before the remaining culprits of the MiG deal are brought to book, and the public finds out who profited from the MiG deal.

For now, thanks to the tireless efforts of the FCID, everything that The Sunday Leader alleged about the MiG deal has been proven factually correct, and Lasantha Wickrematunge has been posthumously vindicated.