Investigations
PUBLIC EYE INVESTIGATION
Meet Mahinda’s Man Friday
By Sonali Samarasinghe
A man is often judged by the company he keeps. President Mahinda Rajapakse is no different.
Sajin (circled with top peace players at Chateau de Bossey in Geneva. (right below) Paulina Edwina Williams’ special power of attorney to take legal action against Sajin
Already the President has come under heavy fire for his association with Ajith Nivard Cabraal, and questions have been raised regarding various business dealings of Cabraal and how it would impact on the nation’s economy given Rajapakse’s recent appointment of him as governor, Central Bank.
Now it seems that President Rajapakse’s blue eyed boy and his coordinating secretary to boot, Sajin de Vass Gunawardena comes with a dubious track record dotted with remand time, fraud bureau investigations, unpaid loans and unfulfilled promises.
President Rajapakse’s style of choosing his advisors and close allies become even more pertinent given that Sajin de Vass Gunawardena was refused a place by Ranil Wickremesinghe when the then prime minister was told that Sajin had a criminal track record. Wickremesinghe was to advice the young man to clear his name first.
It was after this that Sajin went off to Dubai to work with Trico and even there allegedly fell out with the management. However by a happy coincidence he was to meet the then Leader of the Opposition Mahinda Rajapakse who was in Dubai on a visit and young Sajin showed him around.
Rajapakse comfortable in the vernacular and a more simple way of life was rather enamoured of the well spoken young man who was both good in his English and rather spiffy on the computer. To Rajapakse this made Sajin seem like an excellent catch. “Why don’t you come and work for me,” the Opposition Leader invited. Sajin de Vass Gunawardena didn’t have to think twice. All his life he had wanted to get into politics. This seemed like the perfect opportunity. But more on Sajin’s re entry anon.
Meanwhile who is this young man so close to the Chief Executive?
Sajin de Vass Gunawardena, 33 years of age, is already Coordinating Secretary to President Mahendra Percy Rajapakse and is a well spoken, charming young man. He is also a key though nebulous figure in Rajapakse’s peace process.
In February this year at the first round of peace talks between the Tigers and the government, Sajin was to creep into the negotiation room at Chateau de Bossey in Geneva in a surrepticious manner. His name did not appear in any of the official lists.
Upstart
He arrived a day later than the official delegation which consisted of such renowned names as H. L. De Silva, Gomin Dayasiri, Palitha Kohona and John Gunaratne. He was sent there as a special emissary of the President himself to oversee and spy on the proceedings and the government players. Already seniors in politics such as Jeyaraj Fernandopulle and Mangala Samaraweera were beginning to look upon him as an unsavoury upstart.
If the second round of peace talks scheduled for April had materialised no doubt Sajin would have winged his way to cooler climes again. However in June his role in the peace process became less nebulous and more potent. The LTTE while rejecting the peace talks on various grounds agreed to meet in Oslo to discuss the limited issue of the Sri Lanka Monitoring Mission, its constitution and its security.
Having hemmed and hawed over its participation, the government finally decided to send a third level team to Oslo for the talks to be held on June 8 and 9 headed by Peace Secretariat Chief and consummate diplomat Palitha Kohona. To assist him was none other than young Sajin de Vass Gunawardena, Shanaka Jayasekara of the Peace Secretariat and Attorney-at-Law, Gomin Dayasiri.
Superstar
So who is Sajin? What perhaps has endeared him to President Rajapakse and why has this young man been shot to the top like a Sirasa Superstar?
Sajin is the son of A. De Vass Gunawardena who was for a space after Chandrika Kumaratunga’s regime took over government in 1994, the director general of the Board of Investment.
Vass Gunawardena senior was a remnant of the Premadasa era. However he continued as BOI chairman for sometime until replaced by Chandrika’s favourite, Thilan Wijesinghe.
It was during his father’s time at the BOI in 1995 that he got involved with the Grayline Group which at the time was considered controversial in their business dealings. At Grayline owned by Lal Wijeratne, as the new Project Development Manager Sajin proved a useful tool able to have easy access to the much sought after BOI due to his father’s position.
Sajin was still a young buck of 22 and was described by those who knew him then as an enthusiastic gung ho chap with a silver tongue and a smooth and slick manner. This always fooled the gullible person into helping him with money matters. And Sajin had one flaw. He couldn’t stop borrowing money and not paying back, until the police came knocking on his door. Before long, due to various issues he parted company with Grayline.
Loan
Sajin then decided in 1994 to launch into business at the Biyagama Free Trade Zone. He set up a company called Tapes International Pvt Ltd. Incorporated on October 11, 1994 the objectives of the company were to carry on business as manufacturers and dealers of adhesive gum tape, cellotape, silicon plated paper and aluminium coated sachets and byproducts.
In order to start the company at the time he was to obtain a loan of Rs. 2.5 million from a couple, Wimalasiri and Shirani Fernando of 14, Gregory’s Road, Colombo 7. A cheque was accordingly made out and one of the witnesses to the transaction was his father A. D. de Vass Gunawardena. After a couple of months however Sajin began to default on his interest payments and the Fernandos filed action for Rs. 3.5 million inclusive of interest in the district court of Colombo.
Shirani Fernando when contacted by this newspaper declined any further comment except to state that the case had been concluded and the chapter was closed.
That apart, the subscribers to this company were of course Sajin de Vass Gunawardena of 4/1, First Lane Egodawatte Road, Boralesgamuwa, his brother Rohan de Vass Gunawardena also of the same address and Charini Vilakshana de Silva of 117/18, Jaya Mw; Temple Road, Kalubowila who was his first wife.
The smooth talking Sajin is currently in his third marriage and the relevance of that is only to focus on a financial issue involving the second wife.
As at the annual return date of 14/01/1997 Sajin held the majority shares in the company while CF Venture Fund Ltd. was the only other major shareholder.
CF Venture Fund was the finance management company that Sajin approached to finance his FTZ venture. One Hiniduma Liyanage Lakpriya Manoharan Nanayakkara was on the board of CFVF and to the powers that be at CFVF Sajin looked like a personable young man who could get things done. And so they backed his venture for approximately Rs. 2-3 million.
At the time 40% of the funding was provided by CFVF. Approximately 20% by the NDB through equity injection and the rest of the funds was provided by Sajin himself.
Siphoning funds
It was not soon after that it was discovered that he was siphoning funds from Tapes International Company account to a private bank account. He was in fact drawing out money and issuing certificates on board resolutions even though the Board had never met or resolved any such money transactions.
On June 21, 1996 Sajin was to bring in his father Abeydeera De Vass Gunawardena as a director. At the same time he was also to bring in his uncle, Nandana Abeysuriya who was last month killed in a claymore attack at Wilpattu .
Be that as it may, it was now discovered by the board that Sajin had allegedly claimed he had paid a sum of approximately Rs. 5 million to a construction contractor, Sarath De Costa.
By this time one of Sajin’s close friends, Manoharan Nanayakkara had taken majority control of the company. But Sajin and Manoharan were to fall out - with Sajin in fact even walking into Manoharan’s room at CF Venture Fund and abusing him.
Manoharan Nanayakkara was to resign as a director of Tapes on October 29, 1996.
In January 1997 Manoharan more famously known as Mano Nanayakkara was to sell his shares in the company. It was a Korean company called Young An Lanka Pvt. Ltd. of Export Processing Zone Malwana, Biyagama in the exclusive business of making caps that bought these shares. Thus on February 5, 1997 Choon Jo Kim, Sang Heon Lee and Hyn Jun Lee of this company were appointed as directors of Tapes.
It was on the very same day that Charini Vilakshini De Silva, daughter of former SSP Carlyle Silva resigned. Charini was of course Sajin’s first wife.
Subsequently the Korean company was also to become suspicious about the financial activities of Sajin de Vass Gunawardena. They immediately prepared to bring in lawyers from the United States and to retain other legal luminaries from Sri Lanka to look after their interests at Tapes.
It was at this time that one Sharma of Indian origin was brought in to pump money to the ailing Tapes International Pvt. Ltd. Sharma was in fact introduced to Sajin through his uncle Gamini Abeysuriya who in turn was introduced to Sharma by Dubsy Kanagaratnam of George Steuart fame.
Somewhere in 1999/2000 relations began to sour between Sharma and Sajin. On a complaint made by Sharma the Fraud Bureau filed a case against Sajin in the Maligakanda Magistrate’s Court. Sajin was then remanded for a period of 10 days in the Mahara remand prison. However his father again had to rescue the young alleged habitual fraudster and pull some strings in order to place him at the Mahara prison hospital instead.
Standing bail for him in the case were his uncles, the late Nanda Abeysuriya, and Gamini Abeyusirya, formerly director marketing at Singer Sri Lanka. Later Sajin’s father sold his house in Wijerama Mawatha, Gangodawila to settle Sharma and thus the case was settled. Sajin’s father then moved to a residence in Battaramulla.
Account wiped out
The lawyer who appeared for Sajin in the case was Lakshman Ranasinghe.
There is now also a debt recovery action filed against Gunawardena by HNB over Tapes International and the case is now pending in the Colombo Civil court.
Nonetheless it was not long after the Sharma affair that Sajin left for Dubai to work with Trico.
If this were all it would yet be sufficient. However the list of Sajin’s transgressions goes on and on. It was his first wife Charini’s father, former Senior Superintendent of Police, Carlyle de Silva that was now the victim of this smooth talking man. Sajin it is alleged had wanted Rs. 600,000 to get him out of another familiar financial crisis. Being a kind and trusting father-in-law, Carlyle was to give his son-in-law at the time, Sajin, a blank cheque. Sajin allegedly quickly wrote down the enhanced sum of Rs. 2 million and by this wiped out the bank account of Carlyle Silva. Carlyle, a long time friend of President Rajapakse’s brother Chamal, himself a former police officer in despair wrote to him detailing the facts of the matter and Sajin’s subterfuge.
Sale of car
And then of course there was the other little matter of the car. It was somewhere in early 1996 that his business ally at the time, Mano Nanayakkara who was then married to Lakmali Nanayakkara of Ernst & Young, was successfully sold a car by Sajin that did not belong to him.
In 1996 Mano Nanayakkara was still dealing with Sajin in connection with Tapes International and was perhaps still a tad impressed by the smart smooth talking young man. So when in February or March 1996 Sajin drove in with an almost new black Mitsubishi Lancer and made a sales pitch the couple decided to purchase the car. The car had done some ridiculously low mileage of 2000 miles. The couple felt that a new car would go at about Rs. 950,000 and was happy to pay Rs. 850,000 for it. Sajin in fact even issued a receipt for the payment received.
It was then that the excreta hit the fan. One day as the old driver employed by Nanayakkara was driving in to United Motors he was stopped and told that the car he was driving was infact theirs. Sajin had apparently leased the car from United Motors and with no ownership title had sold the car to a third party. He was also overdue in rental payments and had defaulted for about four months.
United Motors now made a complaint to the police and very soon uniformed police personnel visited the Nanayakkara house in Talahena and requested them to report to the Mulleriyawa police station.
Sources close to Mano Nanayakkara who now reside in Brisbane, Australia told this newspaper that it was then that Mano had confronted Sajin and asked him to return the Rs. 850,000 and return the car to United Motors or face a jail term given the fact he had a reciept for the sale, and the matter was sorted out accordingly.
Endless list
But as we said the list does not stop. Now he gets entangled with a foreign national, Pauline Edwina Williams, holder of British Passport Number 022542371. Somewhere in September 2002 she was residing in room 242 at the Trans Asia Hotel. Williams was distraught. She was the proprietor of a pleasure yacht ‘Croft Original’ which was at the time lying at the yard at Colombo Engineering Enterprises in Colombo.
She had entrusted the repairs of this yacht to one Frank Wilfred Perera of No. 6, 7th Avenue, Alexandria Estate Jaela. She had remitted to the account of Wilfred Perera the sum of Sterling Pounds 9500 for the said repair to account number 8810002051 at the Commercial Bank at Jaela on April 24, 2002.
Wilfred Perera meanwhile had passed away on June 10, 2002 without being able to effect any repairs and Williams now proceeded to intervene in the testamentary proceedings 324/T for the recovery of this amount.
The late Wilfred Perera of course was interestingly connected. Sajin having divorced Charini De Silva married for the second time Wilfred Perera’s daughter, Dilrukshi, an airline stewardess. Pauline Edwina Williams also alleged that she had sent in October 2000 another sum of US$ 11,000 to Perera also for repairs but no repairs were done.
But Pauline had another grouse. It was obvious that Sajin was now getting involved in yacht repairs. Perhaps it was one reason why his father requested the top post at Sri Lanka Ports Authority during Ranil Wickremesinghe’s premiership. A post that was denied him.
Be that as it may, Pauline Edwina Williams in her complaint to the Fraud Bureau stated that Sajin De Vass Gunawardena accepted a sum of US$ 8,000 for the repair of her yacht but no repairs were affected by him. As Williams was leaving the country she effected a Special Power of Attorney through K. P. Law Associates of 218 Hulfstdorp Street, Colombo 12 on September 27, 2002 appointing an associate to act as her attorney. He was empowered through the special power of attorney to appear before the Colombo Fraud Investigation Bureau or any other police station in respect of the complaint made against Sajin.
In fact the Fraud Bureau through Inspector Pillai (now ASP) obtained an arrest warrant and informed the person holding the power of attorney they were looking to arrest Sajin. The Fraud Bureau thereafter went to the Jaela residence at Alexandria Estate only to be told Sajin was working at Trico. At Trico the Fraud Bureau was told Sajin had left to work in their Dubai office.
Not long after Sajin was to be divorced from Wilfred’s daughter.
So it is this very disturbed and habitually fraudulent young man who had already been rejected by Ranil Wickremesinghe for his dubious track record who was now taken in by Rajapakse, desperate perhaps for English speaking personable young persons to flash up his act.
Maga Neguma
Anyway having invited the young man to work for him Rajapakse winged his way back having been shown around Dubai by Sajin. When Sajin returned in 2003 he was to work for Rajapakse. Immediately after the general election victory of the UPFA in 2004 and Rajapakse ascended the Prime Ministership and the Highways Ministry, Sajin was appointed General Manager of the Maga Neguma project. Later however he was accused of making over payments to a company run by one of his uncles who stood bail for him in the Sharma case and he was moved out from this position as consultant to the the Palaly runway and KKS breakwater rehabilitation projects.
Sajin was in fact so influential with the then Prime Minister Rajapakse he would sit on invitation at board meetings of the Maga Neguma Road Construction Equipment Co. Ltd. even though he was not a form 48 bona fide director.
But if he was invaluable for whatever reason when Rajapakse was prime minister and leader of the opposition he became even more useful during the presidential campaign last year.
Chinthanaya
Sajin booked in his name and on behalf of the Rajapakse camp 25 rooms at the five star Cinnamon Grand Hotel to promote the Mahinda Chinthana campaign. The massive bills run up by those using the rooms were however paid regularly with Sajin coming over to the hotel personally and settling the bills. Sajin himself occupied one of the rooms.
However things became a little more sticky after Rajapkse’s victory in November 2005. Almost all those who were occupying the rooms vacated them but there was an outstanding bill of well over Rs. 2 million. To the consternation of the hotel this bill was not settled.
However the Cinnamon Grand now resorted to ‘hostage’ taking in sheer desperation. Fortunately for them one single remnant of the Rajapakse campaign camp remained. That was none other than Dayan Jayatilleke, who is a presidential advisor.
Lo and behold when Jayatilleke having possibly had enough of hotel life attempted to check out he was told that the hotel could not let him leave unless the outstanding bill is paid in full.
Apologising profusely, the hotel told him ‘we are very sorry but you are the only insurance we have to get our money back.’
Jayatilleke shot back, “don’t ask me, ask Sajin about this. He is supposed to make the payments.”
So Dayan stayed on as insurance while the hotel tried to contact Sajin who was not available for a couple of days. Nonetheless when the hotel finally reached him Sajin immediately told them, I will have the cash for you in half an hour. And as he promised, the cash of approximately over Rs. 2.5 million was paid and Jayatilleke released from ‘hotel’ arrest.
Question is how did Sajin have the money in half an hour? Has he declared these monies to income tax? Worse still is he collecting these from public funds with or without the knowledge of the President?
In the final analysis does a man with such a track record deserve to hold public office? As Coordinating Secretary to the Head of State at that? In President Rajapakse’s book, we guess he does.
Sajin unavailable for comment
The Sunday Leader tried several times to reach Sajin’s office and get through to him on his mobile phone but could not do so. We thus left a message with a lady staffer in his office at the Presidential Secretariat and stated we were writing an article and would like to speak to him urgently in that regard.
We also verified with her Sajin’s email address and sent him a list of questions which we hope he would answer for publication in next week’s issue of The Sunday Leader
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VAT scam a colossal Rs. 288 billion
By Sonali Samarasinghe
13 AUGUST 2006: If you thought the Rs. 3.5 billion VAT fraud was the biggest monetary scandal this century then you can think again. This nation and its public are being scammed every minute by its administrators and legislators. And they are being scammed big time.
The VAT fraud is no longerRs.3.5 billion. It is nearly 100 times that amount and that’s a modest estimate on available data. As it stands the sum is already a gigantic Rs.288.9 billion.
It has now come to light that a sum of Rs. 283.4 billion ofVAT monies has been lost to the state in a matter of just two years from January 2004 to end March 2006 due to fraud. Slamming the system in a damning report, the Auditor General (AG) states the loss in revenue is due to large scale fraudulent VAT refunds made by the VAT department without proper investigation and bureaucratic incompetence
A hard hitting Special Projects Report by the Auditor General tabled in parliament two weeks ago proves that the Department of Inland revenue is wracked with bureaucratic incompetence, riddled by irregularities and weighted down by negligence and fraud.
Not only is the department not reconciling its books with a discrepancy of Rs. 14.3 billion between the Individual Revenue Account and the Accounts of the Republic in 2005 alone, but the department’s administration is atrociously poor.
Shockingly, there were discrepancies of even the number of files on public corporations and institutions available in the Department. For instance within a space of six months between December 31, 2002 and June 30, 2003 the number of these files incredibly increased from 46 to 4,894. That is a difference of 4,848.
In fact according to the available obviously dubious data at the Department of Inland Revenue, within a space of six months the number of Employees under the Pay As You Earn Scheme dropped from 789,221 to 215,424. That is a drop of 573,797 employees. These discrepancies are shown when comparing the number of files appearing in the performance reports of the Department of Inland Revenue (DIR) as against the census reports of the DIR.
Negligence
The Auditor General also states the negligence and failure to recover VAT funds despite the issue of assessments for the recovery of these monies has exacerbated the situation contributing to a conducive environment within the DIR for such picaresque behaviour.
Another massive fraud
If that is not hard enough to swallow, the public has now been further defrauded of a colossal Rs.389 billion by fraud, negligence and illegal activity of government departments, ministers and the executive, a new audit report reveals. A weak system and lack of coordination between government institutions has contributed to a network of fraudulent and irregular activity that has drastically affected state revenue.
Already reeling from one of the biggest ever VAT fraud, in history, the nation’s beleaguered economy cannot any more take the slings and arrows of outrageous ministerial and administrative impiety.
Shocking
The Auditor General in his Special Project Report has revealed shocking details of how the government is being defrauded of billions of tax rupees due to departmental and ministerial malpractice.
If politics is the art of the possible then politicians are consummate con artists. And while the taxman may hunt down the small fry in frustration, it is in fact politicians who end up defrauding the government of revenue.
While the findings show that the annual loss of government revenue is astronomical and cannot even be computed, a series of test checks carried out by the department has shown a loss of Rs. 389 billion.
Slams government
The Auditor General, hard hitting and precise as always has blamed the fiasco squarely on the government. While citing several reasons for the loss of such a huge amount of revenue he says questionable responses made by institutions when audit queries are made and serious lapses are pointed out instead of immediately taking steps to rectify the situation.
Shirkers all
The AG also ticks off the Treasury Secretary, secretaries to relevant ministries and heads of respective departments for shirking their responsibilities. He reminds the Secretary to the Ministry of Finance that he, as the nation’s chief accounting officer is responsible over all and draws attention to the weaknesses in higher management and the lack of accountability
He also cites as a major reason for the colossal losses and weak management of tax revenue, the neglect to introduce specialised systems and controls by the authorities concerned.
Why this becomes vital is that the tax structure within the taxation policy of Sri Lanka facilitates a large portion of tax revenue to flow direct to the government.
For instance out of the total tax revenue of Rs. 198.3 billion received during 2005 by the Department of Inland Revenue , 97.6 percent had been directly remitted to the government as direct and indirect taxes through the department of customs including other government institutions, individuals and other institutions.
However, the Auditor General slams the system stating the coordination and flow of information and data between major government tax collecting institutions is almost non existent.
VAT fraud - just when you thought it was a mere Rs.3.5 billion
The VAT fraud is no longer Rs.3.5 billion. As it stands the sum is already a colossal Rs.288.9 billion.
Take revenue due to the government on Value Added Tax during the period 2003 to 2005 for instance. The accounts are horrendous. The arrears of VAT as at March 31, 2006 was a humongous Rs. 288.9 billion. The arrears of tax which amounted to Rs. 5.4 billion at the end of 2003 had within the space of two years leap frogged to Rs. 288.9 billion just four months ago.
Primary reason - fraud
The primary reason for these arrears the Auditor General states is large scale fraudulent VAT refunds and the failure to collect large amounts of tax upon assessment due to reasons best known to the department.
However it is not only fraud but also sheer negligence, incompetence and lack of computer technology and software that has contributed to this terrible blight on the public weal.
The AG had detected two instances of Value Added Tax totaling a humongous Rs. 200.6 billion owing to the state coffers that had not been included when computing arrears.
They were -
TIN Number Assmnt. Date Amount
Number Rs. Millions
409162070 9961882 2004.10.21 182,406.2
409162517 9961883 2004.10.21 18,206.8
Total 200,613.0
Even though these assessments had been computerised they did not come up on the computer screen due to the computer programme blocking out any data beyond a certain limit as erroneous.
In fact the above two VAT 20 Assessments had been handed over to the VAT department but on the receipt no official departmental stamp had been placed. Instead the dates September 29 and 30, 2004 had been manually written.
Fraudulent intent
You need not be a rocket scientist to figure out that it is possible to enter data in excess of the maximum capacity of the computer fraudulently with the full intention of committing a fraud even in an instance where the VAT 20 Assessments have been duly issued.
In this instance even though the two assessments related to two different institutions, both had been filled up and signed by the same person. However this same person had in fact signed and furnished another assessment relating to another institution where the official date stamp had been placed.
The Commissioner General of Inland Revenue attempts to cover up this matter. He states that the date was written manually as the date on the date stamp was unclear and that if one person is a partner of several partnerships such person can sign reports of partnerships and instances of the same person signing two VAT 20 forms is possible.
He also states in his observations that when values exceeding the upper ceiling are reported, it can be detected at the time of entering such data to the computer.
Nonetheless the Auditor General is unforgiving. He reprimands the Inland Revenue Department for not taking any steps whatsoever to rectify this situation even though 20 months had passed from the date of assessment up to the Auditor General’s report on the above VAT refunds. Who will monitor the monitors?
But more importantly even though such a huge amount appears on the computer printout none of the officers in the higher management of Inland Revenue have exercised any supervision of this extraordinary case, while the state continues to be deprived of this revenue.
Books don’t match
If you thought you’d heard it all hold on to your hats. There are also massive discrepancies between the accounts of the Treasury and the accounts of the DIR. Therefore the accounts of the republic do not reconcile with individual revenue accounts.
For instance in 2004 the discrepancy between the individual revenue account and the accounts of the republic was 589.5 million (Rs. 0.6 billion). This discrepancy bounded to a massive Rs. 14.3 billion in 2005.
In fact the Auditor General states the relevant authorities have taken no steps to rectify these discrepancies which very clearly appeared in the accounts of the republic presented by the Secretary, Ministry of Finance and Planning and the Secretary, General Treasury as recently as April 19, 2006 and the individual revenue accounts for 2005 presented for audit as recently as July 3, 2006.
There were also serious differences amounting to Rs.16.2 billion between the individual revenue accounts of the Department of Inland Revenue and the Treasury computer print outs.
Customary irregularities
And if that is still not enough, enter the Customs Department. Customs as we all know is big business. And nobody understands this better than the Auditor General himself.
He now turns his eye on the ‘highly questionable’ existence of discrepancies between data on imports fed into the computers by the Department of Customs and the Department of Inland Revenue.
In fact the Value Added Tax on eight import entries relating to two institutions during 2002 and 2003 according to the records of the Department of Inland Revenue and the Customs Department was Rs.1.2 million.
The VAT on six import entries to an institution entered into the data base of the statistical division of the Department of Customs but not appearing in the database of the Department of Inland Revenue was Rs. 863,095
The VAT on 23 import entries of that institution for August, September and October 2002 included in the data base of the DIR but not in the data base of the Department of Customs was Rs. 2 million.
There are also discrepancies between the data of the performance report of the DIR and the data of the department of fiscal policy. While in 2003 the difference was Rs. 50.8 million by 2004 it had risen considerably to Rs. 3.45 billion.
The latest Auditor General’s Special Project Report is a damning document as far as the Inland Revenue Department is concerned. It is now upto President Mahinda Rajapakse as the Minister of Finance to rein-in his ministers and his departmental heads and read them the riot act.
Rajapakse knows more than anyone else how important state revenue is at a time he is on the verge of launching the country back into full scale war.
Jeyaraj takes the Treasury for a ride
It is now revealed that Minister of Consumer Affairs Jeyaraj Fernandopulle has illegally revised vehicle permit fees, for the import of vehicles perhaps under the misapprehension that he is monarch of all he surveys, costing the country a loss of Rs. 9.8 million.
Certainly the public is aware that Minister of Consumer Affairs Jeyaraj Fernandopulle is a cavalier politician. The Minister is also happily for him in charge of the lucrative Department of Import and Export.
However no one seems to be more aware of Fernandopulle’s cavalier attitude than the country’s out going Auditor General, S.C. Mayadunne himself.
In a hard hitting Special Report to parliament the AG states the Minister has revised and reduced permit fees in an irregular manner.
Reduced fees
Though regulations made by the Minister in terms of Section 20(3) of the Imports and Exports (Control) Act must be published in the Gazette and only effective from the date of publication or on a date specified in the regulations, the Minister for reasons best known to him has thought it fit to drastically reduce the permit fees surrepticiously without publication in the Gazette.
Thus a number of vehicle import permits had been issued by the department based on the direction of the Minister by charging permit fees less that what was charged before September 15, 2005.
The loss of tax revenue to the government due to the Minister’s irregular revision of fees for 160 permits issued between September 15, 2005 and March 10, 2006 has amounted to Rs. 9.8 million.
The Controller of Imports and Exports says these revisions were made on the “written order of the Minister” which were in turn made in response to several requests made to the Minister for the revision of the above mentioned fees.
Extravagance of ape Mahinda
Prime Minister Mahinda Rajapakse
PM’s Secretary like Oliver Twist asking for more money on behalf of Rajapakse
The itemised list. Circled are the Premier’s fuel expenditure and miscellaneous recurrent expenditure only for the month of July
The car that was involved in the accident
By Sonali Samarasinghe
Mahinda Rajapakse, prime minister, is an eating drinking man. No immediate harm in that unless you have high cholesterol. He also cuts a somewhat dashing figure as his red scarf swishes about himself on his various walk-abouts.
And now, from documents in possession of The Sunday Leader, he is also a man who will not hesitate to roll his arm out or at least the arms of the taxpayers, bring out the silverware, pop the champagne or unscrew the arrack, whichever takes his fancy, and have a heck of a party.
If we were to tell you that the man spent over Rs. 5 million on hospitality up to July 13, this year, you may want to regurgitate your prawn cocktail from last night. Rs. 5,156,317 to be exact. What’s more in just seven months he frittered away his allocated hospitality provisions for the full year.
Mind boggling
One can only hope, especially if one were to hail from Hambantota, that the Prime Minister was entertaining many a tsunami donor whose heart bled for the southern coastal town.
Nonetheless the mind boggles at this wasteful spending and Babylonian revelry at a time when the country not unlike Shedrach Meshach and Abednigo were well and truly in the fiery furnace. One is reminded of Latin orgies before the fall of Rome and Nero’s fiddle comes to mind also.
The hospitality vote set aside in the budgetary allocations may only be spent on entertainment for foreign dignitaries and for gifts to them. Therefore if the Prime Minister of India were to visit and Prime Minister Rajapakse entertained him and presented the Indian premier with a parting gift of a sterling silver elephant that would be covered by this provision.
However, if Prime Minister Rajapakse were to entertain to tea 50 small time businessmen from Hambantota, he could not claim the expense under the provision.
We do not know why and to whom the Prime Minister was being so hospitable this year but watch these figures. By July 13, Prime Minister Mahinda Rajapakse had spent Rs. 5,156,317 on entertainment and gifts. A sum of Rs. 4,356,560 had already been spent by July 13,2005. Vouchers have been submitted for a further Rs.799,757.
Supplementary estimates
On May 11, Secretary to the Prime Minister, Lalith Weeratunga wrote to Director General, Budgets, Treasury, with regard to obtaining supplementary estimates for the year 2005. Weeratunga was to again write to Director General, Budgets, on June 2 on the same subject.
On July 15, Weeratunga, now already wallowing together with his boss the Prime Minister in the ‘Helping Hambantota’ scam, was to write yet again to the Director General, Budgets.
He reminded the Director General of his earlier two letters on the supplementary allocations for the Prime Minister for 2005 and stated that already the entertainment and gift allocations set aside for the Prime Minister have been exhausted. As such he requested that a supplementary estimate be made without delay.
The letter written in Sinhala goes on to set out as follows
The estimated provision (for 2005): Rs. 3,000,000
Supplementary estimate: Rs. 1,500,000
Total allocations: Rs. 4,500,000
Expenditure up to July 13, 2005: Rs. 4,356,560
Other vouchers submitted for payment: Rs. 799,757
Total expenditure: Rs.5,156,317
Shortfall: Rs. (656,317)
Provision needed for the rest of 2005: Rs.5,500,000
Thus the Prime Minister having already spent over Rs. 5 million on entertainment intends to party on and squander another Rs. 5.5 million of the country’s money. So for the year 2005 his total hospitality provision would come to over Rs. 10 million. Rs. 10,656,317. That is partying to the tune of nearly a million bucks a month.
But if his entertainment knows no bounds, then his travel expenses are a thing to marvel at. The Prime Minister maybe the highways minister, he may have commenced such projects as ‘Maga Neguma,’ but unless his fuel tank has sprung a massive leak, there is hardly any reason why he should spend over Rs.1.14 million for fuel in one month.
In the month of July alone the Prime Minister’s fuel bills came to an astronomical Rs.1,146, 067.90 - a sum that cannot be exhausted even if one were to travel all over Sri Lanka 24 hours of the day, seven days a week. Even Gulliver on his long and arduous journeys could not have done it. But the Prime Minister as highways minister has achieved the impossible.
No fuel charts
According to state regulations, the drivers of the Prime Minister’s vehicles must each maintain a vehicle registry and a fuel chart. However The Sunday Leader reliably learns that no such fuel charts have been maintained for the Prime Ministerial vehicles.
The fuel and lubricant budget estimates for 2005 is Rs. 2,330,000 - that’s for the whole year. Prime Minister Rajapakse spends Rs. 1,146,067.90 for just one month.
But that’s not all. His miscellaneous recurrent expenditure under the all encompassing ‘other’ category only for the month of July was Rs. 1,747,942. The budget estimate for this category is Rs. 725,000. That’s for the whole year.
The Prime Minister must be provided for sufficiently to be able to discharge his duties as the second highest in the land. But one is entitled to be nonplussed as to why Mahinda Rajapakse would spend over Rs. 1.7 million on misellaneous items in the month of July alone. Pray what are these items which cost the tax payer an arm and a leg in July?
Mahinda Rajapakse will remember well how he rallied the troops together in the late ’80s for a Paada Yatra, a demonstration primarily against the late President Premadasa and his spending ways. At the time, Rajapakse grumbled that Premadasa’s bed at Temple Trees was too ornate and shiny. His chairs were expensive, that he had set for himself a throne of gold.
Simply put, Premadasa’s extravagance was a thorn in the side for the frugal minded Prime Minister and he did not hesitate to be vociferous about it for political mileage. A frugality which Rajapakse seems to have total mislaid now.
| ‘Maga Neguma’ officials attack copsFive persons believed to be officials of the Prime Minister’s ‘Maga Neguma’ project of the Highways Ministry were involved in an accident last week. On August 22 the five officials had been travelling in a white Mitsubishi Lancer bearing registration number HB-5265 on the Peradeniya road. At about 4:30 a.m. the car had hit a mound on the road at the Getambe-Peradeniya junction.When two police constables manning a police barrier nearby had gone over to investigate, the occupants of the vehicle had allegedly attacked them. The constables had managed to message the Peradeniya police whereby other police officers had arrived on the scene, at which point they too were allegedly attacked by the occupants.Three police officers suffered injuries and were admitted to the Peradeniya Hospital. It is learnt that among the Maga Neguma officials who had allegedly attacked the police officers was a UNP municipal councillor.Two of the policemen were discharged by the hospital, one is still under treatment. Meanwhile it is learned that top officials of the Highways Ministry had tried to influence the doctor attending to the policeman to discharge him from hospital forthwith.It is also learnt that a person purporting to be the new Diyawadana Nilame, Pradeep Nilanga Dela Bandara has also tried to influence the hospital to discharge the injured police officer.
Over to you, Mr. Prime Minister. |
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Spotlight |
| Helping KumaratungaThe land allocated to the President at Madiwela: President Kumaratunga and Dinesh GunawardenaBy Sonali Samarasinghe It has been wisely said that if you need a helping hand you will always find one at the end of your arm. It is possibly armed with this truism, that politicians such as Mahinda Rajapakse and Chandrika Kumaratunga have lived their lives. Rajapakse in the guise of helping Hambantota helped himself. He freely dipped his ham like hand into the tsunami piggy bank and transferred the monies into his private account at the Standard Chartered Bank. Now President Kumaratunga using Urban Development and Water Supply Minister Dinesh Gunawardena as a ready and willing chisel, has carved out for herself if not a niche in the nation’s history; then an acreage in the nation’s Western Province. The land on the Talawathugoda road at the Talawathugoda-Madiwela Road intersection and situated close to the parliamentary complex is valued at over Rs 100 million and is in extent about one-and-a -half-acres or thereabouts. That’s 240 perches at least. What’s more, a 10 acre High Security Zone is expected to be cordoned off for the inconvenience of any residents who may have called Madiwela their home. Welcome to a nighmare. Minister Gunawardena however is quick to point out that a high security area has been in existence in the vicinity since parliament was built.(See box) Let’s look at the facts. It is only President Kumaratunga as the Head of State who can by law alienate freehold title to state land. Simply put, in this case then, President Kumaratunga shopped for herself. She wrapped her own gift, and gave it to herself. And its not even her birthday. Obtaining cabinet approval to paint a veneer of legitimacy to this outright robbery of state land will not fool anyone. One is only reminded of Prime Minister Rajapakse’s futile attempt to paint a veneer of legitimacy on the Helping Hambantota scam by publishing half-truths in the State media for public bamboozlement. Sherlock Holmes was to once exclaim after a particularly trying case. “Half-truths my dear Watson are more deadly than lies.” Be that as it may a memorandum - 05/1234/023/046 dated August 23 and signed by Minister Dinesh Gunawardena was presented to cabinet. It read inter alia thus: “Request for a block of land at Madiwela Village for construction of a residence.” It went on to describe the land and sought cabinet approval for a disposition of this state land on a freehold basis to President Kumaratunga. Cabinet accordingly granted approval to allocate the land on a free-hold basis for the construction of a residence at Kumaratunga’s own cost. President Kumaratunga was not present in cabinet on August 24 when the paper was taken up for discussion and later approved. The cabinet meeting was instead presided over by Prime Minister Mahinda Rajapakse. Rajapakse’s haste to alienate anything for gain is understandable. It’s a pattern of behaviour that has not gone unnoticed by the people. To the Prime Minister what’s another acre in Madiwela Village if he could go about the business of being SLFP’s presidential candidate without President Kumaratunga squealing about him at every turn. He’d give the shirt off citizen Silva’s back just to get her off his. After all, on Tuesday, September 6 at the SLFP Annual Convention, Rajapakse’s presidential nomination is up for official ratification. That said under what provision of law do politicians such as Rajapakse with Helping Hambantota and now Kumaratunga with Helping Herself decide so arrogantly to help themselves to property belonging to the people of the country? Constitution Article 33 of the Constitution which deals with the powers and functions of the President, provides in Article 33(d) for the president of the country under the public seal to make and execute such lands and immovable property vested in the republic as he/she is by law required or empowered to do. The 13th Amendment to the Constitution reiterates this position in Appendix II of the Provincial Councils list where it states that land and land settlement of state land shall continue to vest in the state and be disposed of by the president in accordance with Article 33(d) of the Constitution. State Lands Ordinance Under the State Lands Ordinance No 8 of 1947 as amended, it is only the president who may divest or dispose of state land on freehold basis and that, only under special circumstances. In Section 2 of Part One under the title ‘Grants, leases and other dispositions of state land’ it is the President who may make absolute or provisional grants, sell, lease or otherwise dispose of State Land. Section 6(1) of the Ordinance states that a special grant or lease of state land may be made at a nominal price or rent or gratuitously for any charitable, educational, philanthropic, religious or scientific purpose which the president may approve. Subsection (2) provides for title of the land to revert to the state if the land is not used for the purpose for which it was granted. Therefore the lesser the title to be divested the lower the level of approval. Thus if it is merely an annual permit that is required a divisional secretary may approve the permit. If it is a long lease for 30 to 99 years approval may be given by the commissioner of lands. The closer it gets to alienation of full title the level of approval required keeps rising. Thus for a total gift of state land the approval must come from the head of state - that is President Kumaratunga. UrbanDevelopment AuthorityLaw As far as government institutions or corporations are concerned such as the UDA, alienation of land must be in accordance with these above laws read with the laws governing these bodies. Therefore if the land belongs to the Urban Development Authority as in the case of the proposed Chandrika retirement home, the UDA Law No.41 of 1978 as amended shall come into play also. Section 18 of this law deals with the alienation of land or interest in land held by the Urban Development Authority. Here too it states clearly that the authority may, with the approval of the minister alienate by way of sale, lease, rent or rent purchase for purpose of urban development, any land or interest in land held by the authority, subject to such terms and conditions including the use or uses for which the land or interest in land is alienated as may be determined by the minister. The point is this. Nobody can approve freehold alienation except the president. Urban Development Minister, Dinesh Gunawardena may approve the sale, rent, lease or rent purchase of land by law but not freehold alienation of title. So what then has happened in this instance? President Kumaratunga has approved the alienation of state land for President Kumaratunga. Timing The timing of this cabinet paper is significant. It was presented to cabinet on Tuesday, August 23. The Supreme Court determination holding that the presidential election should be held in 2005 was delivered only on Friday, August 26. Mind you President Kumaratunga, her brother Foreign Affairs Minister Anura Bandaranaike, Health Minister and UPFA Spokesman Nimal Siripala de Silva and other top party stalwarts have been adamant that the presidential polls were to be held in 2006. In fact they announced their presidential candidate Prime Minister Mahinda Rajapakse as the candidate for 2006. Thus Kumaratunga was not a woman who wanted to budge from the top seat. Unless she was privy to the contents of the Supreme Court judgment there was no way Kumaratunga would have known that her term would be up in three months. However the President’s Office officially announced the details of the donation of the land well before the court ruling on Friday, August 26. So she had decided even before the judgment was delivered that she would forego her entitlements such as pension, official residence, maintenance allowances for the residence and all stipends to meet utility bills such as electricity, water etc. The President’s Office also stated that “The cabinet of ministers noted that President Kumaratunga had already decided to forego compensation due to her for the loss of an eye during an attempt on her life and the political assassination of her husband Mr. Vijaya Kumaratunga. The value of the land to be allocated to President Kumaratunga is insignificant compared with the entitlements she has given up and also proposes to forego in the future” a statement from the President’s Office said. Certainly as a former President of Sri Lanka, President Kumaratunga is entitled to many things under the law. The President’s Entitlements Act No. 4 of 1986 provides for the grant of official residences and other allowances and facilities to former presidents and to the widows (widowers) of former presidents, and to provide for the payments of pensions to such widows. Section 2 of this Act states that “There shall be provided to every former president and the widow of a former president during his or her life time the use of an appropriate residence free of rent. Presidential allowances The proviso to this section states that if for any reason an appropriate residence is not provided for the use of such former president or the widow there shall be paid a monthly allowance equivalent to one third of the monthly pension payable to such former president. Furthermore a former president is entitled to (1) A monthly secretarial allowance equivalent to the monthly salary payable to the private secretary to the president. (2) Official transport and all such other facilities as are for the time being provided to a cabinet minister. There is no provision for an exchange or barter of entitlements. No president can for instance arbitrarily decide that because she forfeits her entitlement to have her water bill paid she can carve out for herself a piece of land in greater Colombo. One is nonplussed at the wording of the Presidential statement. She states that the value of the land is nothing compared to the entitlements she has decided to forego and may decide to forego in the future. And pray what would those be? Because as far as we know she has no entitlements outside of the 1986 Act. President Kumaratunga in her official statement makes the point that she has already decided to forego compensation for the loss of her eye in an attempt on her life and the political assasination of her husband. While one sympathises sincerely with her loss, one is compelled to point out that Hema Premadasa, the widow of President Ranasinghe Premadasa also lost her husband in a brutal terror attack. While compensation of a relatively small amount was paid to her for the loss of her husband she enjoys as the widow of a former president only what the law entitles her under the 1986 Act. That is an official residence and a monthly pension equivalent to two thirds of the pension late president Premadasa was entitled to receive upon his death. A President’s salary while serving is Rs 25,000 per month. However, if Kumaratunga’s argument is the compensation issue then pray have all those innocent civilians who lost their limbs, their husbands, their mothers and fathers, all those dependents who lost the breadwinners of the family through terrorist attacks, been given compensation? Are they entitled to state lands too? Are the families of the soldiers who died in war entitled to acres of state land too? Gift to a politician It is hard enough for bona fide donors to get the government to release land for tsunami victims in affected areas. So much so that donors have gone back to their countries in disgust. Nine months after the tsunami people still live in tents. Many international donors cite the inability of the government to release land for donors to build permanent shelters as the main cause for the victims’ plight. The cabinet however has no qualms in approving a large chunk of land to the President for no reason other than it is now her whim to build a large house with a garden and maybe even a stable in Madiwela. Remember this. In every other case of a former president’s entitlements the president totally retired from politics. From President J.R.Jayewardene to D.B.Wijetunga to Presidential Widow Hema Premadasa. However President Kumaratunga come December 2005 will no more be President but she will remain in active politics as the leader of the Sri Lanka Freedom Party. She will continue to make policy decisions and be part of the political mainstream. Thus the government has in effect granted freehold title to prime land to a politician. If this isn’t corruption at its sophisticated best, we don’t know what is. The law on presidential entitlements is abundantly clear. Section 2 of the 1986 Act states, “There shall be provided to every former PThe chucking controversypresident and the widow (widower) of a former president during his or her life time the various entitlements as set out in the act.” Walauwa in the making And there lies the rub. President Kumaratunga is getting state land on a freehold basis to build for herself a house at her own cost. Her official statement on the issue is worded in order to bamboozle the country into believing that she is sacrificing an arm and a leg not to mention an eye and a husband. Sixty thousand people in this country at least have sacrificed as much for their country in just the last 20 years. In reality then the Bandaranaike family is grabbing as usual. As this is a freehold outright alienation of title it will not revert to the state in the event of President Kumaratunga’s, God forbid, demise, even one day after the title is given.The children will inherit the property and will be free to dispose of it for over Rs 100 million and there is nothing anyone can do about it. Unlike in the case of Hema Premadasa or D.B.Wijetunge, Kumaratunga and her great grand children will continue to enjoy this land at the expense of the people. It will be known as the Kumaratunga Walauwa 100 years hence and all would have forgotten it was ill gotten gains. At least Chandrika Kumaratunga like Donald Trump knows that property is the only worthwhile investment to make. In the final analysis, Kumaratnuga gets what Kumaratnuga wants. And to hell with the law of the country. As she retires as President will she gracefully settle for anything less than everything? Unlikely. box Dinesh justifies land gift
Even though the cabinet minute of August 24 reads “Request for a block of land at Madiwela Village for the construction of a residence, Urban Development Minister Dinesh Gunawardena denied that President Kumaratunga made any request for this land. It is difficult to believe however that the Minister is in possession of special soothsaying powers to know that President Kumaratunga would forego, as she herself in her statement had said, the entitlements due to her as a former president in lieu of obtaining land. It is a far more likely story that Minister Gunawardena has himself been a pawn in this presidential land grab. When asked under which law or provision the President waved her entitlements and then request other entitlements instead, Minister Gunawardena said that there have been many instances when entitlements were enhanced like providing more security or more cars to a minister. He cited the case of the late Lakshman Kadirgamar who was to be given more security which unfortunately didn’t happen in time to save his life. Minister Gunawardena points out that state land is disposed of all the time. The Steel Corporation was granted state land in Athurugiriya, then privatised and finally up to 2000 houses built on that land at Millenium City. But the Minister’s point is weak in the this context as the Athurugiriya land was sold, which is permissible under the law. In this case Kumaratunga is being gifted State land. Q: Isn’t it the President who must approve the alienation of state lands on a freehold basis? A: There are other procedures in place where institutions have been given powers to alienate small percentages of land. Q: The value of the land is given as Rupees 100 million, is that correct? A: We cannot make an assessment on that yet. Q: Is this land going to be filled? A: We cannot say yet, the SLRDC will have to recommend and give clearance. Q: But there is a cabinet decision late last year that halted the filling of land in the Western Province for three years because of grave flooding due to inadequate storm water retention provisions? A: Yes there is a moratorium by former Minister M.H.Mohamed, but that will end soon. And a committee will go into the storm water retention aspect. Anyway some way beyond where this particular land is situated police quarters are being built. So development is continuing according to plans prepared during President J.R.Jayewardene’s time for the development of Kotte. Government buildings are coming up and phase one is over now. We will start phase two which will go on for the next five years or so. State land has been gifted in many instances, observes the Minister. They are gifted to temples etc. Even the land commissioner has certain powers to alienate state land. Minister Gunawardena stated that the designated land was yet to be surveyed but confirmed that it was about one and half acres in extent. He also said that President Kumaratunga was not in cabinet when the cabinet paper was approved and the meeting was presided over by the Prime Minister. |
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http://www.thesundayleader.lk/archive/20050918/spotlight.htmPolitical games at Rupavahini
On September 30 an advertisement of the UNP candidate consisting of a narration, was broadcast on Rupavahini after due upfront payment. However the same advertisement was refused by SLRC officials three days later on Monday, October 3.The marketing division accepted the commercial schedule of the UNP ads but refused to accept the money. Up front cash payment is a condition of broadcast according to the Rupavahini election rate card. The marketing division officials stated they had been directed not to accept any more advertisements without the approval of the Chairman, SLRC, M.M. Zuhair. Chairman Zuhair told The Sunday Leader he had decided not to broadcast any advertisements until he had clarification from the Elections Commissioner regarding the issue. (See box for full interview) However this explanation is thin considering that the very same advertisement was in fact broadcast by Rupavahini on September 30. On Thursday, October 6, the UNP on behalf of its candidate Ranil Wickremesinghe gave the SLRC another set of commercial time schedules booking space for the final two weeks of the election campaign that is from November 1 to 14. Surprisingly this time the SLRC not only refused to accept the money which according to their own rate card must be paid in advance but they also refused to accept the time schedules. On refusal to accept any UNP advertisements the SLRC officials stated they were directed by the Chairman not to accept any advertising until the Elections Commissioner gives the SLRC clear directions on the matter. Conditions Furthermore the Rupavahini election advertisement rate card issued by the marketing division categorically states under its terms and conditions clause that: (1) All payments must be done on cash basis in advance; (2) If payment is made by cheque, advertising would start only on realisation of the cheque; (3) Commercial schedules should be submitted during weekday working hours two days prior to telecast. However the condition of upfront payment that is so assiduously followed when it comes to other candidates is thrown out the window when it comes to the advertising campaign of SLFP presidential candidate Mahinda Rajapakse. For instance Prime Minister Mahinda Rajapakse’s Media Secretary, Chandrapala Liyanage wrote to the Marking Manager, SLRC on a letterhead bearing the legend ‘Presidential Election Propaganda Coordinator Office.’ The letter was dated September 20. The letter according to the frank was however received by SLRC on September 19. He requested for four advertisements to be placed under the ‘Dinawamu Sri Lanka’ campaign launched by the Prime Minister. These advertisements were accordingly broadcast at the scheduled times without any upfront payment. It appears that Prime Minister Mahinda Rajapakse is able to run his ads on credit. And his credit period seems to last forever. Take invoice No. 6029 sent to Prime Minister’s Media Secretary Liyanage. The invoice relates to an advertisement run on September 5 on Rupavahini. The ad cost Rs.132, 250.00. The due date for payment for the ad is stated as September 20 even though the ad was broadcast on September 5. In the light of stringent payment conditions foisted on the other candidates, pray are these actions by the nation’s state media conducive to holding free and fair elections? Unlimited credit However the UPFA government certainly seems to have unlimited credit to conduct its propaganda campaigns whether it’s a general election campaign or a presidential one. Remember the ‘Rata Perata’ campaign at the general election in April 2004? Outstanding balances owing to the SLRC as at March 31, 2004 pertaining to that campaign amounted to some Rs.6, 583,045.29 + VAT. Even as at May 14, 2004 the bill had yet not been settled by the incumbent UPFA government. (Document displayed elsewhere on this page) The Prime Minister however seems to treat the SLRC as his own personal backyard. He has now requested the Rupavahini Corporation to forward to him a large number of video clips of various scenes both featuring himself and those of only scenic and cultural value. Sources in the Prime Minister’s Office say he intends to use these tapes to put together video clips for his election campaign. Indeed the contents of the clips themselves give a clue as to how he would like to run his campaign. On September 25, Prime Minister Mahinda Rajapakse’s Advisor Anura Siriwardena sent a letter to Zuhair on a Prime Ministerial letterhead requesting BETA CAM copies of 48 programmes on various subjects. The clips requested included the Prime Minister in the midst of the farmers, the Prime Minister speaking with labourers, the Prime Minister waving to the crowds and the Prime Minister meeting artistes among other clips. But the requests were not only for clips that featured the Prime Minister. The Prime Minister’s Office also requested the SLRC to send them video clips filed in their library of various artistic and cultural scenes. These included a sunset, a sandakada pahana, the Kataragama Devale and its perehera, the Kirinda Deevara Waraya, Independence Square, the Green Tiger Movement, a lotus filled pond, a flickering flame, a fish stall, a clip of ocean waves breaking against the shore together with the noise, fishermen pulling in their nets, distressed children, women demonstrating on issues, etcetera. State property Prime Minister Rajapakse by his actions seems to be exploiting his position and misusing the extensive facilities of the SLRC including the Rupavahini Corporation Library to further his personal presidential election campaign. If this is the case it is a shameful misuse of state property for electioneering purposes. In fact on October 3, PM’s Media Secretary Chandrapala Liyanage, on a Prime Minister’s Office letterhead wrote to the SLRC again. This time the letter was addressed to Director General, SLRC, Nishantha Ranatunga. The letter requested 30 video clips stating they were needed by the Prime Minister’s Media Unit to put together a programme and should be made available to the Prime Minister’s Office immediately. The video clips requested include scenes of the sun rising at Siripada, the Sinharaja forest, wild animals including peacocks, leopards, elephants and waterfalls. The Prime Minister’s propaganda outfit also requested the SLRC to provide them with clips of scenes demonstrating Sri Lanka’s destitute people, the Sinhala people running behind white tourists begging. Scenes of LTTE terror, killings, bomb scenes, baal dances, the LTTE having discussions with the Norwegians, scenes from the Kadirgamar assassination and the Millennium City incident. Bagful of requests They also requested cuts of relevant leaders making a case for federalism, election rallies, election queues, cuts of Soma Hamuduruwo, and a voice and visual cut of Prime Minister Rajapakse stating that when he wins the presidential election he would bring about not war but a time of peace. But this does not seem to be all that the Rajapakse camp would aspire to use in their election campaign advertisements. There would possibly be a ship sailing out to sea. An airplane cutting across the skies. The moon slowly rising in the night sky. A rocket zooming into the air from a space centre. Children from an international school working on laptop computers, scenes from the British Museum, citizens reading books in a modern library, close up of school bands and scenes of school children walking along the street in their uniforms. The pertinent point is this. Can the Prime Minister of this country misuse state property and state personnel - many hours will have to be dedicated by library staff of the SLRC to find these clips for the Prime Minister - for the purpose of a campaign? Not for commercial purposes Will the SLRC have at the disposal of all other presidential candidates its library in order that they too may request clips of various subjects in order to further their campaigns? Chairman Zuhair told The Sunday Leader the SLRC would normally issue copies of clips to public figures who are featured on programmes run by the television channel. He said the clips would be issued free of charge unless it is for a commercial purpose. Be that as it may, the state media must play a level field. It cannot play politics. Unlike private media, the state media is run with public money. Therefore it is answerable in every detail to the public. In terms of the 17th Amendment to the Constitution, the Elections Commissioner has the power to appoint a competent authority to monitor the state media. With regard to the private media in terms of the constitution the commissioner only has the power to issue guidelines but there is no provision for an implementing arm such as a competent authority that could enforce those guidelines. Thus when former Media and Ports Minister Mangala Samaraweera angrily requested Commissioner Dayananda Dissanayake to look into the practices of the private media as well, Dissanayake was to quickly point out that he was unable to issue anything other than guidelines to the private media under the law. Flaw Dissanayake pointed out the legal draftsmen should have taken this matter into consideration and the legislators should not have approved the 17th Amendment with this shortcoming in the law. Be that as it may this election is vital for the future of the country. It cannot be marred by state institutions run on public funds supporting any one candidate. This is an election which will either usher this country into an era of peace or plunge it into an abyss of war. No advertisement must be allowed to incite the public against any race or religion. It is the responsibility of the state media and the Elections Commissioner to monitor closely the campaign of all candidates in this regard. The national interest must prevail.
http://www.thesundayleader.lk/archive/20051009/issues.htm Fact or fiction Inside story of Ranil’s computer ‘deal’ By Sonali Samarasinghe Last Wednesday (12) Prime Minister Mahinda Rajapakse’s Campaign Coordinator and Prime Minister designate, and Ports and Civil Aviation Minister, Mangala Samaraweera, lodged a complaint with the Permanent Commission to Investigate Bribery and Corruption. To give him moral support in this endeavour he was accompanied by Propaganda Secretary of the JVP, Wimal Weerawansa, Deputy Minister of Sports and Youth Affairs, Sripathi Sooriyaarachchi, and lawyer Wijedasa Rajapakse. The complaint The complaint states that on or about November 2003, during Opposition Leader Ranil Wickremesinghe’s tenure as prime minister, the Prime Minister’s Office procured 39 computers and other accessories for a sum of Rs. 340 million. The complaint states that by doing so the people of this country were defrauded. The complaint further states that the retired Dixon Nilaweera was specially re-appointed to the Prime Minister’s Office by then PM Ranil Wickremesinghe in 2002. Samaraweera alleges that the Public Sector Management Division coming under the purview of the Prime Minister bought 39 computers from Advantage Technologies of No.435A, Galle Road, Colombo 3 to the value of Rs. 175 million, and paid another Rs. 165 million for software and electronic management techniques and a further Rs.137 million for maintenance to TATA Consultancy Services situated at No.435A Galle Road, Colombo 3. It states that these deals were concluded without a proper technical evaluation and without cabinet approval. The complaint adds that 90 percent of the above sums were paid before procurement of either the hardware or the software. That Nilaweera in a letter to Prime Minister’s Secretary Bradman Weerakoon dated 04.11.2003 which also contains a minute from Weerakoon, has stated that “Mr Paskaralingam has been calling me practically everyday regarding this payment” and urges the payment to be expedited. It also alleges that the said computers cannot be used for the purpose it was purchased. Samaraweera thus calls for the Bribery Commission to investigate allegations of corruption against Opposition Leader Ranil Wickremesinghe who was prime minister at the time, Dixon Nilaweera and R. Paskaralingam.
The reply The very next day (13) Opposition Leader and UNP presidential candidate Ranil Wickremesinghe addressing a packed news conference responded strongly and promptly to the complaint urging a full investigation should be conducted without interference. He also said that he had no intention of going to courts to stop the investigation and advised UPFA presidential hopeful Mahinda Rajapakse to withdraw court cases which sought to stall or stop investigations into bribery and corruption. Going a step further Wickremesinghe stated he would invite even a CID investigation on the matter and pledged that when he becomes president he will ensure that laws are enacted to prevent courts from stopping investigations. Wickremesinghe pointed out that current laws had adequate provisions to take action against those who made false complaints. Wickremesinghe immediately released details of the computer purchases referred to in Samaraweera’s complaint and reiterated that the deal received the approval of the cabinet and was done according to proper tender procedure on an Indian Line of Credit and the agreements were approved by cabinet. False complaints Indeed Section 21 of the Commission to Investigate Allegations of Bribery and Corruption Act No. 19 of 1994 adequately provides for false complaints. The section provides that any person who makes an allegation in a communication made by him to the commission knowing such allegation to be false or having reason to believe that such allegation is not true shall be guilty of an offence and shall on communication after summary trial before a magistrate be liable to imprisonment for a term not exceeding 10 years and/or to a fine not exceeding Rs. 200,000. In addition he shall be liable to the payment of compensation of such sum as the court may think fit. Thus the lodging of a complaint comes with a great deal of responsibility and the fact that the law frowns upon false complaints is amply manifest in the severity of the punishment. The fine is even higher than the fine that may be imposed upon a public servant who is found guilty of corruption under Section 70 of the Act. Section 70 of the Bribery Act deals with the offence of corruption by any public servant which includes the intent to cause wrongful or unlawful loss to the government, or to confer wrongful or unlawful benefit, favour or advantage on himself or any person. On conviction by a magistrate the accused will be liable to imprisonment of up to 10 years and a fine not exceeding Rs. 100,000. So what exactly is Minister Mangala Samaraweera talking about? And is he making an unsubstantiated allegation when he says there was no cabinet approval for the said computer deal? Let’s look at the documents now in the possession of The Sunday Leader. The Indian Credit Line In July 2002 India extended to Sri Lanka credit worth US$51 million at concessionary interest rates, a part of which was in support of the island’s Economic Stabilisation Programme, negotiated with the International Monetary Fund. The Sri Lankan Finance Secretary, Charitha Ratwatte signed two credit agreements, the first providing $31 million for the purchase of wheat grain from India, in response to a request made by the Prime Minister, Ranil Wickremesinghe, during his visit to India in December 2003. The repayment of this credit is spread over 15 years, with a grace period of five years. The second agreement provides $20 million in support of Sri Lanka’s Economic Stabilisation Programme, negotiated with the IMF. The repayment period for this credit is nine years, commencing from 2005. In fact building on this goodwill Indian Prime Minister Dr. Manmohan Singh in July 2004 pledged a further $250 million of credit to Prime Minister Mahinda Rajapakse on his first overseas visit after assuming duties as Premier. The credit was extended to cushion the increasing oil prices and develop the country’s road network. Accordingly, US$ 100 million was to be used to develop highways and the rural road network which comes under the Prime Minister’s purview. Smart governance The government at the time was looking at modernising the government mechanism and bringing it in line with regional and international standards. Part of that programme included computerising the public sector and making it efficient, cost effective and internationally competitive. Under the Indian Line of Credit the government now undertook to implement the smartgov project. Smartgov project The object of the smartgov project was to enhance productivity through the use of electronic management techniques. Thus the project sought to; (1) replace manual file processing with a electronic file processing system (2) send automatic reminders (3) develop standard formats for draft circulars, memos etc. (4) help with prioritising the work (5) provide mechanism for information sharing within the organisation (6) create an office management system The project was implemented in two locations; (1) Prime Minister’s Office - number of file processing officers - 40 (2) Ministry of Human Resource Development, Education and Cultural Affairs -number of file processing officers - 320. Under this project all these officers were provided with computers, printers, scanners etc. and the software was developed by TATA Consultancy Services. Negotiating committee The Cabinet Committee on Economic Policy accordingly appointed a Cabinet Approved Negotiating Committee (CANC) to negotiate and finalise a Smart-Governance Project to be implemented in the government of Sri Lanka. Deputy Secretary, Treasury, Ministry of Finance, N. Pathmanathan wrote to Secretary, Cabinet Sub Committee on Tender and Budget, F.M.K.Ratnayake stating that in terms of a decision made by the Cabinet Committee on Economic Policy the following officers were appointed to negotiate with TATA Consultancy Services to finalise the work programme connected with smartgov: (1) N.Pathmanathan, Deputy Secretary, Treasury (2) Santhush Jayasuriya, Deputy Director General, BOI (3) S.Ranugge, Deputy Director General, Ministry of Policy Development and Implementation (PD & I) (4) Ravi Senanayake, Director, Ministry Finance (5) Hans Wijesuriya, CEO, Dialog GSM Accordingly the CANC met on several occasions and sought clarifications when necessary from the local representatives of TATA Consultancy Services and held teleconferences with the technical counterparts in Mumbai. Additional Secretary, Ministry of PD & I, S. Rahubedda coordinated the work of the committee. On May 9, 2003 Finance Minister K.N.Choksy summoned a meeting with representatives of TATA, Advisor, Ministry of PD & I, R. Paskaralingam and members of the CANC where the Minister directed the matter to be expedited and a report be submitted to the Cabinet Committee on Economic Policy to be held on May 13, 2003. TATA presented the revised proposals which consisted of technical proposals and commercial proposals for systems integration of smartgov. Based on these proposals the CANC again had a teleconference with TATA on May 12, 2003 and subsequently submitted a full report on the proposals. In fact N. Ramanathan forwarded this report in full to Ratnayake and requested that he table this report at the next meeting of the Cabinet Sub Committee on Tenders and Budget (SCTB) and obtain approval. Cabinet approval obtained This report was then tabled at the meeting of the (SCTB) on May 28, 2003 and the minutes of this meeting were considered by cabinet. Cabinet then approved the report on June 11, 2003 (See document displayed elsewhere on this page). Addressed to Secretary, Ministry Finance for action, the cabinet approval stated that approval was granted to accept the TATA Consultancy Services’ proposal, subject to the following requirements at a cost of US $3.40 million; (a) to assure adequate capacity of the servers so that upgrading will not be necessary for the next two years, and will accommodate the growth of transactions through these servers due to other ministries being added on. This should be done within the prices proposed. (b) to provide a breakdown of costs, and, (c) to provide a more detailed implementation plan. On the basis of a recommendation by the Economic Policy Committee of the cabinet at its meeting held on 19.08.2003 an amendment to the aforesaid cabinet decision was also approved by cabinet on 17.09.2003. The amendment is an addition of a sub paragraph (d) which reads as “the required hardware components not procurable from India under the Indian Line of Credit, will be funded by the government of Sri Lanka.” Accordingly approval was granted by the cabinet of ministers to accept the TATA proposal at a cost of US$ 3.40 million. Credibility issue So far then Mangala Samaraweera has cause to look sheepish. His allegation to the Bribery Commission that no cabinet approval was obtained or that no technical evaluation of the deal does not seem credible. In fact a CANC had been appointed, a report had been forwarded which was duly discussed at the meeting of the Cabinet Sub Committee on Tender and Budgets and later the report and the deal were approved by the cabinet of ministers. This much can be seen by documentation in our possession. Contracts Subsequent to cabinet approval being obtained two contract documents were prepared by the Ministry of Policy Development and Implementation: (1) A sales contract for supply of software between the Government of Sri Lanka (GOSL) and TATA Consultancy Services valued at US$ 1,650,00 (2) Contract for the supply of hardware, networking and system software between GOSL, Advantage Technologies (Pvt) Ltd and TATA Consultancy Services valued at US$ 1,750,00. On October 16, 2003 Secretary, Treasury, Charitha Ratwatte writes to Director General, Public Sector Management Reforms, Dixon Nilaweera stating that Additional Secretary Ministry of PD & I, S. Rahubedda and Deputy Director, BOI, Santhush Jayasuriya were fully involved in the contract negotiations and should be included therefore in the project steering committee. Ratwatte also requested Nilaweera to keep the Ministry of Policy Development and Implementation informed when assistance or clarification is needed. He also pointed out that it was Additional Secretary S. Rahubedda who handled the subject. The two contracts were signed by Secretary to the Prime Minister, R.B.Weerakoon and Secretary, Ministry of Human Resource Development, Education and Cultural Affairs, V.K. Nanayakkara on behalf of the GOSL and representatives from TATA Consultancy Services and Advantage Technologies (Pvt) Ltd on behalf of the supplier. This was authenticated by Legal Advisor to the Ministry of Finance, Priyanthi Peiris. Legal Advisor Peiris wrote to R.B.Weerakoon on September 29, 2003 and forwarded the two contracts to the Prime Minister’s Office. The work accordingly commenced. Part payments were effected in terms of the contracts by the Prime Minister’s Office from the provision made for this purpose by the Department of Budget of the Treasury. On March 24, 2004, Project Director, smartgov Sri Lanka, TATA Consultancy Services of Hyderabad, India, Bala Ravirala wrote to the Project Manager smartgov Sri Lanka, Dixon Nilaweera and forwarded a completion report as per the contracts signed. Contractual obligations were fulfilled by TATA Consultancy Services as at March 25, 2004. Accordingly under the software contract the following deliverable were made; (1) Installation and configuration of smartgov product on the servers installed at both the ministries (2) Configuration of smartgov on ‘as-is’ basis (3) Training of 360 identified file processing officers (users) on smartgov (4) Training of identified data processing officers (5) Conducting workshop for senior officers (6) Post implementation support being provided till May 31, 2004 in both ministries. Additional tasks taken up over an above the contractual obligations were as follows: (1) Sinhala language integration (2) Employee data collection and loading (3) Building knowledge bank (4) Revenue, finance data collection and loading (5) Loading automatic server shutdown software in Prime Minister’s Office (PMO) to have system available 24/7 - to protect it from power fluctuations (6) Setting up server rooms in PMO and Ministry of Education (MOE) - Basic infrastructure for setting data centers (server installations) - follow ups (7) Conducted additional training sessions for DPOs and end users (8) Printed training manual for all users. All material to be supplied as per the contract had also been supplied by March 25, 2004. A perusal of the documents in our possession shows that the upgrading of the government offices was part of a larger plan to implement a programme under the economic policy reforms. It also transpires that all contracts were signed after due cabinet approval and in fact after due evaluation by a committee appointed to evaluate the project. Neither does Opposition Leader Ranil Wickremesinghe seem to have gained personally from these contracts. Rather it is Prime Minister Mahinda Rajapakse who now occupies the Prime Minister’s Office and the likes of Education Secretary Tara De Mel who are reaping the benefits of a more modernised and efficient office environment. In any event while Wickremesinghe as prime minister and minister of policy development and implementation must take the responsibility for the contract he was not personally involved in the process. However, it speaks well for Wickremesinghe that he immediately welcomed a full investigation into the matter so that the public may be fully appraised of the circumstances of the contracts signed in the process. It also speaks volumes for Wickremesinghe’s integrity that he was willing to hold a public debate on these matters with Prime Minister Mahinda Rajapakse. Prime Minister Mahinda Rajapakse will do well to take a leaf of Wickremesinghe’s book and allow a full investigation into the Helping Hambantota Fund. After all in that case Rs. 82 million was deposited in a private account of which one of the signatories was the Prime Minister’s own brother. Be that as it may the purely political nature of this complaint is all too obvious. While it is true that Wickremesinghe was prime minister at the time, his term ended with elections in April 2004. This complaint was lodged one and a half years later in October 2005 and thus raises serious credibility issues on the part of Samaraweera. The ludicrous nature of Samaraweera’s actions are further magnified as the Rajapakse camp earlier tried to trade in on the issue by urging Wickremesinghe to drop the Helping Hambantota matter in exchange for them dropping the computer issue. In true Wickremesinghe style, the ‘deal’ makers were politely told where to go. While campaign organiser Samaraweera though it fit to lodge a complaint against Ranil Wickremesinghe a few weeks before the presidential poll, the complaint on the Helping Hambantota issue was made no sooner the facts were known and certainly long before PM Mahinda Rajapakse was even declared a candidate. Nonetheless finally, it is the Bribery Commission that will independently investigate the complaint and arrive at its own finding. If Prime Minister Rajapakse has more to add on this matter the best forum to do so would be a public debate. After all both candidates are lawyers and as such one would not be handicapped when arguing their respective cases. In any event, the issue does not seem to bode well for the Rajapakse camp. It is learnt that Wickremesinghe will be filing a complaint with the Bribery Commission under Section 21 of the Act against Minister Mangala Samaraweera for allegedly making a false complaint http://www.thesundayleader.lk/archive/20051016/spotlight.htm#Fact
Selling the CWE assets PM has pledged to protect
The Minister of Trade, Commerce and Consumer Affairs, Jeyaraj Fernandopulle under whose purview the said assets fall is now selling off these properties like he were selling off bottles of vim at a Sathosa outlet.
Attempts are being made by the Minister to sell two valuable assets of the CWE, namely 226 perches of land at No.440 Union Place, Colombo 2 and approximately four acres of land in Pepiliyana sources at the CWE say could easily fetch Rs.600 million, for a fraction of its true value in indecent haste.
Minister Fernandopulle sought cabinet approval for the sale of the Union Place property on August 4, 2005 but the memorandum does not mention any other property.
The cabinet on August 10 appointed a 14 member committee to go into the proposals. However two weeks later on August 24 the cabinet for reasons known only to themselves rescinded their own decision of August 10, and gave the Minister the green light to go ahead with his proposals including the selling of the property.
Meanwhile it is learnt that the Sathosa premises opposite the new HSBC building in Rajagiriya which is owned by the State Trading Corporation has also been put up for sale by Minister Jeyaraj Fernandopulle. The property is owned by the State Trading Corporation and a private party is negotiating the deal informed sources at the Ministry of Trade told The Sunday Leader.
In typical turncoat fashion the government has now decided to restructure the CWE after all. It has decided to sell off the CWE’s immovable assets, terminate the employment of excess workers and hand over the management of the Sathosa Retail Limited (SRL) to the Post Graduate Institute of Management (PIM) for a payment.
Eighteen months ago this government together with the likes of the JVP’s Wimal Weerawansa rode into power by deceiving a section of the masses on various issues of national importance, not least of them being the partial privatisation by the UNF government of Sri Lanka’s white elephant the CWE.
Contradicting Mahinda Chinthana
What is more, the sale of these valuable state assets by the government contravenes Prime Minister and UPFA presidential candidate Mahinda Rajapakse’s own manifesto which on page 40 under the sub heading ‘New Economic National Policy’ states “government ownership in the strategically important enterprises of banking, power and energy, transport and ports, as well as national assets will be continued and such assets or such public enterprises will not be privatised.”
“Legislation will be enacted clearly spelling out the responsibility of the government in acting as the custodian in the management of institutions in order to protect the people’s ownership of national assets. Management of national assets and public institutions in a more professional and independent manner without being politicised will also be ensured by this legislation.”
At page 42 under Trade and Commerce the manifesto specifically states;
“State institutions such as the New Lanka CWE, Paddy Marketing Board including a Fruit and Vegetable Board will be established to provide efficient market networks to service the general public.”
Minister Fernandopulle is one of Rajapakse’s closest allies and a vociferous advocate of the prime minister. It is also Fernandopulle who advocated the advent of Wimal Weerawansa as the Prime Minister of this country if Foreign Minister Anura Bandaranaike refused to toe the line.
Indeed it was Jeyaraj Fernadopulle and Wimal Weerawansa and others of their ilk who having opposed the partial privatisation of the CWE for no higher purpose than to gain power; tongue in cheek pledged that the CWE would be brought back to state control under the UPFA government.
What they did not disclose to the masses was that the government will need over Rs.3 billion merely to kick start Sathosa into operation. Even then the government will need to subsidise goods on a massive scale leading to a huge burden on the Treasury.
CWE staff shocked
Sources within the CWE expressed shock stating that the immovable properties to be sold by the CWE have already been handed over to the Treasury to service a huge debt of Rs.13 billion carried over from when the previous UPFA government was in power.
Workers speaking to The Sunday Leader were also nonplussed as to why the sale of land is being executed in such a hurry. Staff met the Minister in this regard on Friday (28) to protest the sales. However the Minister was adamant.
The story
After the UPFA came into power in April 2004, Minister of Trade Jeyaraj Fernandopulle presented a Memorandum to Cabinet, titled ‘Buy Back of 40 % Shares and the Management Rights of the Sathosa Retail Limited (SRL) by the Co-operative Wholesale Establishment (CWE).’ The memorandum was differed for observations of the Minister of Finance and for alternative proposals that President Chandrika Kumaratunga also intended to submit. The matter was also referred to the Strategic Enterprises Management Agency (SEMA) and to the Public Enterprise Reform Commission (PERC).
Cabinet on April 20, 2005 granted its approval in principal for the take over of SRL by the CWE but differed for further consideration without making a final decision.
Later by a letter dated June 3, 2005 the International Grocers Alliance (Pvt) Ltd (IGA) the consortium of three private companies - Ceylon Biscuits Ltd, Carson Cumberbatch & Co.Ltd. and Richard Peiris & Co. Ltd., that purchased the 40 percent share capital of SRL and the management rights thereof for a sum of Rs. 680 million, discharged itself from its obligations.
This action was precipitated due to a variety of reasons not least of which was that the government had already made moves to take back control of the 40 percent shares, the SRL was running at a huge loss due to the Minister purchasing goods without tenders and suppliers and banks had halted credit to the SRL no sooner the UPFA government made it public they were taking back control.
The IGA informed the board of directors of both the CWE and SRL that due to reasons beyond their control they were (1)discharging themselves from further performance of its obligations under the management agreement by which the entirety of management of the SRL was vested with the IGA.
(2)The three board members of SRL nominated by the IGA resigned by letters dated May 26, 27 and 30, 2005. (3) SRL will have to look after the interests of the SRL by itself.
By a further letter dated June 17, 2005 the IGA stated they would not be nominating their representatives to the board of directors in place of those who resigned.
As a result of this crisis, of the 150 Retail outlets of SRL, six were closed down several months ago with the balance 144 languishing in a state of virtual close down with no business. The salaries for the months of June and July had not been paid even by August for the workforce of 3157 amounting to Rs. 61 million.
Furthermore while collecting their salaries a majority of the workers had not even reported to work for several weeks while some of them were engaged in organised agitation and others had filed a fundamental rights application.
According to the Statement of Accounts of SRL, the liabilities to the creditors of SRL as at August this year stood at Rs. 740.7 million while an overdraft of Rs.300 million from the Bank of Ceylon remained unsettled, as at 31.3.2005. The reported loss of business was Rs. 1,064,750.574.
Cabinet memorandum
Having realised to his folly that the CWE cannot be managed by the state alone and having admitted the serious shortcomings in the SRL, on August 4, 2005 Minister Fernandopulle in a cabinet memorandum titled “Current crisis situation in the management of the Sathosa Retail Limited (SRL) and a proposal for restructuring” sought the approval of cabinet for the following
(1) To make an ex gratia payment to all employees of the SRL through the CWE of Rs. 4000 per employee using a grant given by the Treasury. This amounts to Rs. 12.46 million per month.
Note: This was set to burden the state coffers to the tune of Rs. 149.52 million per annum to maintain this parasitic institution in its present state.
2) The chairman SRL who is also the chairman CWE to take over the management responsibility of the SRL including the retail outlets and other business depots under overall guidance of the secretary, Ministry of Trade and Consumer Affairs.
The memorandum also sought approval from cabinet for the following recommendations made by the Mahinda Amaraweera Committee. A committee chaired by Deputy Minister of Urban Development and Water Supply Mahnida Amaraweera was appointed by Fernandopulle to look into the takeover of SRL by the CWE.
Accordingly the following recommendations were made inter alia.
(1)The entirety of the Management of the SRL be vested with a professional board of management who would run it as an independent business organisation
(2) Restructure of the SRL, which may involve the creation of a new entity in the ownership/shareholding of which would be the CWE and the Treasury whilst not causing a liability to government.
Note: Fernandopulle is already burdening the public coffers by disorganised purchases without tender procedure and by maintaining a redundant staff. He is also planning to hand over management to a new entity admitting that the CWE cannot be managed by the state.
(3) Obtain the professional services of the Post Graduate Institute on Management (PIM) of the University of Sri Jayawardenapura to prepare a restructuring plan for SRL and a plan for business operations to develop as a viable business which would include recommendations on the termination of employment of excess staff.
Note: It is ironic that Minister Fernandopulle has decided to implement a retirement package on the same terms as the packages offered on previous occasions including the stage at which SRL was privatised. To Fernandopulle even the 3157 remaining staff is in excess. However he was not above reviling the UNF government when the voluntary retirement package was implemented to cut down the huge staff of 6000. At the time 2700 workers accepted the package.
(5) To consider entering into a long term partnership with the PIM for vesting certain managerial functions of the new entity which would be established to carry out the business activities handled by SRL.
In order to implement these proposals the Minister seeks approval to sell the property of the CWE at No. 440 Union Place, Colombo 2.
Union Place property
Fernandopulle seeks the sale of the Union Place property in order to implement the restructuring and to satisfy any other obligations of SRL through an advance provided by the Treasury.
(a) Initially pledging to the Treasury the requisite portion of 01 acre 01 rood and 26.68 perches land owned by the CWE , situated at No.440 Union Place, Colombo 2; and,
(b) By disposing of the aforesaid property in accordance with government approved tender procedure, with the view to recovering the sum of money necessary to settle the debts of SRL, to pay compensation to the excess workforce of SRL. To provide working capital to the new enterprise established to run the business activities previously handled by SRL, and to settle the advances and grants given by the Treasury.
Cabinet on August 10, 2005 in a paper addressed to S.Wirithamulla Secretary Ministry of Trade, Commerce and Consumer Affairs S. Wirithamulla, decided to appoint a 14 member committee to consider Minister Fernandopulle’s proposals of August 04.
In the meantime in a Cabinet Memorandum dated 24.08.2005, Minister Fernandopulle further explained his memorandum of 04.08.2005.
Thus on August 24, 2005 cabinet decided to rescind the previous decision taken on August 10,2005 and to grant blanket approval for Fernandopulle’s proposals of August 4. The cabinet further approved the monthly payment of Rs.4000 for each of the 3157 employees employed by Sathosa Retail Ltd. for a further period of three months and directed the General Treasury to provide Rs. 12.46 million per month for this period.
Invitations to bid
The Ministry of Trade, Commerce and Consumer Affairs on September 7, 2005 prepared advertisements for the said Union Place land situated between Hyde Park Corner and Town Hall and was set to publish invitations to bid in the English, Sinhala and Tamil newspapers.
However they then hastily abandoned the publication of these invitations to bid, and instead decided to divest the land through the Stock Exchange.
CWE board approves asset sale
Nonetheless following cabinet approval of the Minister’s proposals, by a board paper signed by Chairman CWE ,Mahinda Gammampila on September 13, board approval was sought to sell the property at No 440 Union place, Colombo 2. By board resolution of September 15 the CWE approved the sale of this asset in accordance with government approved tender procedure for the purposes mentioned in the cabinet memorandum.
Director opposes sale
However Director Lasantha Lakpriya, the labourer who was controversially appointed a director by Minister Fernandopulle did not support the board paper to sell off the property stating this was a prime asset owned by the CWE and in any event IGA debt should not be settled with this money.
Meanwhile in keeping with the spirit of undue urgency displayed by Fernandopulle, Ministry Secretary Wirithamulla wrote to the Surveyor General’s Department on October 19,urging him to speed up the boundary verification certificate of the Union Place property to facilitate a quick sale.
On October 21, 2005 the Survey Department sent a vouncher for Rs. 7935.00 in order to survey the land.
Pepiliyana land
In a separate bid to hurriedly sell CWE assets, approximately four acres of lands and buildings at Pepiliyana occupied at present by the Sri Lanka Army has been sold over the counter to the SLA without proper tender procedures or even approval by cabinet.
With shocking haste the Ministry of Trade, Commerce and Consumer Affairs on September 13, 2005 wrote to the Chairman, CWE stating that the SLA had already forwarded a Bank of Ceylon Cheque no 732549 dated 14.09.2005 for Rs. 100 million to the Ministry for the purchase of the Pepiliyana land and buildings. Additional Secretary, Janaka Sugathadasa in his letter requested the Chairman to forward an official receipt to the Army Commander and to also officially acknowledge receipt of the monies to the Ministry.
A general receipt was issued by the CWE to the Army Commander, Sri Lanka Army Headquarters, Colombo 1 on 14.09.2005.
On September 21, 2005, Brigadier W.R.Wasantha Kumara on behalf of the Sri Lanka Army(SLA) wrote to the Secretary, Ministry of Trade, Commerce and Consumer Affairs requesting that the necessary deeds be prepared in order to transfer the said land and buildings to the Sri Lanka Army. The letter also drew attention to the consideration of Rs. 100 million that had already been paid to the Ministry.
On October 4, 2005 Additional Secretary, Ministry of Trade, Sugathadasa, forwarded Brigadier Wasantha Kumara’s letter to the Chairman CWE for necessary action.
On October 6, 2005 Army Headquarters urgently wrote to the Chairman, CWE. The army queried as to why the transfer deeds had yet not been prepared to duly transfer the property to the SLA as payment has already been made and acknowledged. The letter again called for speedy action on the matter.
White elephant
The CWE with 150 outlets nationwide could not cope with the 3000 outlets around the country, not including boutiques and wayside stalls that sold similar produce at competitive prices. The largest retail outlet in the country also became the largest human dumping ground for politicians, thus swelling its workforce and burdening it financially.
Thus the CWE has been incurring losses of about Rs 1.5 billion per annum. Since 1994 this situation has got considerably worse. Since 2004 Jeyaraj Fernandopulle as the new Trade Minister began to import goods helter skelter sans any tenders thus increasing the CWE debt.
In December 2004 for instance, Fernandopulle planned to import flour, big onions, dhal and potatoes worth 10 million US dollars within two months. The purchases were to be made through the People’s Bank, which had been given a guarantee by the Treasury.
In the meantime the government has to pay the 3,157 idling employees of the defunct CWE an additional Rs. 4,000 each since last June. That’s a colossal loss of Rs. 151.44 million annually.
In the final analysis it is Prime Minister Rajapakse, his close ally Jeyaraj Fernandopulle and the joker of his pack, Wimal Weerawansa who stand exposed as ideological frauds.
Furthermore, Rajapakse with the sale of these state assets has the distinction of being the first presidential candidate to break his own pledge in his manifesto even before he is voted in to power.
Neither Minister Fernandopulle nor Chairman, CWE, Mahinda Gammanpila were available for comment. However a senior source at the Ministry who wished to remain anonymous confirmed that advertisements to invite quotations to bid for the Union Place property, were indeed prepared but not eventually published. It was decided to divest the said Union Place land through the Colombo Stock Exchange with the NDB acting as fund manager. The source denied that the Sathosa premises at Rajagiriya is being sold.
On the Pepiliyana land bought by the army the source said the cabinet paper was presented by President Chandrika Kumaratunga. When asked why a four acre land was being sold at only Rs. 100 million, the source said the land was valued in 2001 at Rs. 90 million. Furthermore the army ha d encroached on the land.
http://www.thesundayleader.lk/archive/20051030/spotlight.htm
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