Convenience: Temporary ed for five years
Ew unity plans in Parliament; mmittees appointed to nd speak in one voice "Abandoned " properties at Malwana, Matara likely to be taken over; questions over Basil's admission to National Hospital
the discussions largely centred on the current political situation and investigations into charges against Mahinda Rajapaksa and members of his family. It was agreed that contrary to a previous move to make a few exceptions, they should go ahead with legal action if there was compelling evidence. Cases against them are to be expedited. For this purpose both the investigative agencies and the Attorney General’s Department are to be so advised. Kumaratunga, who is outspoken, complained that there were inordinate delays in the prosecutions resulting in wrong impressions being created among the people. Other partners of the Government were briefed on the outcome of the meeting of this ‘Supreme Council’ on Thursday. It was decided that both the UNP and the SLFP should remain united to ensure the Opposition did not drive a wedge to separate them.
Amid discussions on investigations into cases involving members of the Rajapaksa family, the Government is also focusing on another aspect -- the takeover of a property. This is on the grounds that it is “abandoned.” Investigations against former Minister Basil Rajapaksa for allegedly acquiring two properties through improper means, one in Matara and the other on the banks of the Kelani River in Malwana, both said to be worth over Rs. 90 million, are still continuing. He has denied the accusations. The Matara property, the FCID detectives have found, is in the name of Ayomi Galappathy, a resident of Canada and sister-in-law of Basil Rajapaksa. Though the Malwana property is in the name of Muditha Jayakody, an architect, he has said in a second statement to the FCID that the money he paid to buy it came from Basil Rajapaksa and he did not own the property. He had earlier claimed it was his own. Here again Basil Rajapaksa has denied the claim.
The nearly completed Malwana luxury house on the banks of the Kelani River is the subject of attention now. It transpired during investigations that an auspicious time for the construction of this house was sought by a lady from Sumanadasa Abeywickreme, who was then a celebrated astrologer. He was former President Rajapaksa’s astrologer and predicted Rajapaksa would win the January 8, 2015 presidential election.
Senior investigators have reported to the Government that no one has so far provided proof of legal ownership of the Malwana property and advised that it should therefore be vested in the Government. The AG’s Department has been called upon to closely study the matter and take appropriate action. A senior Government leader, familiar with the investigations and the intricacies of matters legal, came up with this suggestion. A source close to him said whilst a protracted case was likely to continue, the luxury property which is in legal terms “abandoned,” will be testimony to what has been going on under the previous regime. Another matter now under consideration by the Government is the establishment of a separate court to hear cases involving financial crimes.
In the light of Wednesday’s assertions, one could expect a limited ‘thaw’ in the UNP-SLFP relationship. That is by no means to say that everything would be smooth hereafter and continue on a happy note in the weeks and months to come. As is clear, the rapprochement has been forced by the Opposition groups headed by Mahinda Rajapaksa flexing their muscles and more particularly the July 28 march from Kandy to Colombo.
As for the expeditious clearance of cases against members of the Rajapaksa family, the process will involve greater coordination between the investigative agencies and the Attorney General’s Department. At a recent progress review meeting chaired by President Sirisena, it transpired that the Department had been instructed by Government leaders not to file action unless they were “two hundred per cent sure of a conviction.” Thus, investigators say providing detailed information involved time and argued this was why there were protracted delays. They also say that a few investigations or arrests have been stalled or stopped altogether after appeals from political leaders. They did not want embarrassment to themselves when persons known are caught up, said one exasperated investigator. These are not cases involving minor theft, he said underscoring his frustration and the enormity of the money involved.
In the case of the others, there were categories who cannot be arrested, not even acting on the instructions of the Attorney General. Explicit orders to this effect have been issued to them. These include senior public service officials, officer ranks of the armed services, both serving as well as those retired and members of the clergy. This has led to anomalous situations. In the case of one investigative agency, it received instructions with endorsement from an important personality, that the party responsible for corrupt activity be arrested. However, the order not to arrest them arrived in the meanwhile and the file remains in their office.
If the rumblings by the Opposition have united a divided Government, issues where the partners are at variance remain. It came at a time when reports, some credible, circulated about serious divisions between those in the UNP and the SLFP. One such issue was the increase in VAT from 11 per cent to 15 per cent -- the issue that has come as a rallying point for the Opposition. Some SLFP Parliamentarians threatened to vote against the Bill in Parliament. A debate on it was originally scheduled for this month but was put off.
The Supreme Court is hearing a petition which, among other matters, challenges the legality of such a Bill which seeks to impose the tax retrospectively. Since the SC has already ruled that the way the VAT was introduced was illegal, it is being argued that an illegal action cannot be righted through retroactive legislation. The debate on the Bill in Parliament now hinges on the outcome of the Supreme Court verdict. If it is in Government’s favour, the Bill is likely to be debated next month. In such an event, it would be a revised VAT that would be introduced in Parliament. The demands for revision, sought by SLFP parliamentarians when they met Sirisena, are to be taken into consideration, a Government source said.
Besides VAT, there are also other worrisome issues over the economy. It has fallen on Premier Wickremesinghe, as Minister of National Policies and Economic Affairs, to resolve an issue involving heavy financial mismanagement under the previous administration. This was after the Ceylon Petroleum Corporation (CPC) entered into hedging contracts with a number of foreign and local banks in 2007 in the belief that they would help face surging oil prices. It was profitable at the beginning but oil prices dropped steeply forcing the CPC to suffer heavy losses. Petitions before the Supreme Court alleged heavy corruption. The SC ordered the suspension temporarily of payments. Deutsche Bank AG filed an arbitration claim with the International Centre for Settlement of Investment Disputes (ICSID) in March 2009.
This Tribunal declared that simple contractual rights are “not protected” but ruled that investments, like the one in question, were. It held that an instrument, a hedging agreement, constituted an ‘investment.’ Deutsche Bank AG was awarded US$ 78,469,623.71 (over 78 million dollars) or Rs. 11.3 billion. Subsequent litigation continued since 2012 with the Government hiring foreign lawyers. Now, the Government reached agreement with Deutsche Bank to pay US$ 26, 562,926.73 or Rs. 4 billion. The Deutsche Bank AG has agreed that it will withdraw any allegations it had made against the Government of Sri Lanka and the Central Bank.
Premier Wickremesinghe recently sought approval from his ministerial colleagues to enter into a settlement with the Deutsche Bank AG by signing a “Settlement Deed.” The Ceylon Petroleum Corporation (CPC) will enter into this agreement. This was after the Attorney General said in a letter to the Governor of the Central Bank on June 17, 2016 that he sees no legal impediment for the arrangement. Yet, despite widespread allegations of corruption, investigations into the hedging deal where billions of rupees of taxpayer’s money are involved, has not been concluded. Similar hedging deals were entered into by the CPC with Standard Chartered Bank. It was awarded US$ 60 million (then Rs 7.5 billion). The Citibank, which also entered into a hedging deal with the CPC went for international arbitration in Singapore but its claim was rejected.
Meanwhile, President Sirisena, acting on a request from Premier Wickremesinghe, has made changes in the resettlement process of those displaced in the separatist war. As reported in these columns last week, the Cabinet of Ministers decided to “include traditional Sinhala villages in the resettlement programmes.” Minister Rishad Bathiuddin was named as Chairman of a Task Force for this purpose. President Sirisena has now made changes to the composition of this Task Force. There will be four co-chairpersons for this task force instead of Minister Bathiuddin alone. The others will be Ministers Duminda Dissanayake, Faiszer Musthapha and D.M. Swaminathan.
The responsibilities of the Task Force have also been amplified. It will be to “include traditional Sinhala villages in the Northern Province and the then threatened villages in adjoining districts which have not been included in the resettlement programmes by the Government and the various donor agencies and include the Trincomalee District in the proposed programme that will be formulated in consultation with the UN HABITAT office as proposed by the Prime Minister.”
Wednesday’s move for the two main partners of the National Unity Government to remain together for the duration of their entire term of office is politically significant but the journey is likely to be an arduous one. Like the issue over a successor to Arjuna Mahendran as Governor of the Central Bank or the imposition of VAT that has hit poorer sections, new issues are bound to crop up. Of course, one could argue that they could be resolved by a dialogue, perhaps by the Committee that has been named to speak with one voice. Already, pro- Rajapaksa SLFP members are dubbing the new arrangement as one that has subjugated their party to the UNP. If such accusations and public confusion are to be avoided, appointing committees, as has been the practice of the Government, is just one small step. If no credible action follows from them, it will end in zero benefits to the Government and even to those who voted it to power.