Sri Lanka's new government on Saturday announced a criminal investigation into the $2.3 billion purchase of 10 Airbus aircraft for the island's loss-making national carrier under the former government.
Prime Minister Ranil Wickremesinghe's office said an independent board of inquiry found gross violations of financial regulations and procurement procedures in state-owned Sri Lankan Airlines's deal, and said they warranted criminal prosecutions against former executives.
The panel carrying out the probe handed a dossier to Wickremesinghe on Thursday and officials, speaking on condition of anonymity, said the government had accepted its recommendations.
"The Board of Inquiry has found shocking details of corruption running into billions of dollars, manipulations of service contracting, recruitment of unqualified staff and major security breaches at Sri Lankan Airlines under the former government," the premier's office said in a statement.
It said the investigating panel, headed by a former chairman of anti-graft watchdog Transparency International's Sri Lanka office, found a "culture of corruption" in the airline, which had accumulated losses of over $650 million.
The board of inquiry recommended "criminal investigations into the entire re-fleeting process".
In particular, it said there was sufficient evidence to prosecute the airline's former chairman Nishantha Wickramasinghe -- the brother-in-law of ex-president Mahinda Rajapakse -- as well as former chief executive Kapila Chandrasena, who resigned last month when the panel called for action against him in an interim report.
"The former government of president Rajapakse made management changes to carry out a re-fleeting of the airline with brand-new aircraft costing $2.3 billion despite the availability of more cost effective alternatives," the statement said.
Sri Lankan Airlines ordered six Airbus A330 aircraft and four A350 planes in 2013. It took delivery of the first two A330 planes last year, months before Rajapakse's January election defeat.
The carrier has said it expects three A350 aircraft to be delivered next year and the fourth in 2017.
The statement from the premier's office said the probe also found that the national carrier had tried to "hush up" serious mistakes by pilots, but gave no details.
There were also allegedly attempts to reduce entry qualifications in recruiting cadet pilots, but they were averted because two instructors quit rather than agree to lowering professional standards.
However, several cabin crew were recruited on verbal requests from senior management despite having failed at preliminary tests and interviews, the statement said.
Soon after the new government came to power, Sri Lankan Airlines stopped flying to the island's second international airport, dismissed by critics as a white elephant Rajapakse built and named after himself.
The January election was fought partly on claims of corruption and waste by the Rajapakse administration, which is facing allegations of padding infrastructure projects to syphon off money.