“Ashamed of failure to ensure punitive measures in respect of 2013 SriLankan Airlines deal’

By Shamindra Ferdinando

Samagi Jana Balavegaya (SJB) MP Eran Wickramaratne says Sri Lanka should have an Office of Prosecutions independent of the Attorney General (AG). Such an apparatus can inspire public confidence at a time the rationale behind the dismissal of a spate of high profile cases is being questioned, the SJB National List MP points out.

In a brief interview with The Island, the former UNPer and one-time banker emphasised the responsibility on the part of Parliament to take tangible measures in this regard.

Referring to the withdrawal of many high profile cases filed by the AG and the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) since the last presidential election in 2019, MP Wickramaratne said that such actions caused controversy and drastically undermined public confidence. Therefore, political parties represented in Parliament should seriously consider ways and means of reaching a consensus on an Office of Prosecutions, the former State Finance Minister said. Wickramaratne served as the late Mangala Samaraweera’s Deputy during the 2017-2019 period. “There is a clear case of conflict of interest in some instances as the AG is the Chief Legal Officer of the government,” the MP said.

Wickramaratne received the State Finance portfolio a year after the second Treasury bond scam perpetrated by the then UNP government after the Central Bank was brought under the then PM Ranil Wickremesinghe.

Responding to another query, Wickramaratne, who first entered parliament in 2010 on the UNP National List, acknowledged that his previous efforts to convince his parliamentary colleagues to consider an Office of Prosecutions hadn’t been successful. “The situation is so bad, I sincerely hope all political parties recognise the need to strengthen the system. Parliament is responsible for financial discipline and enactment of laws. Therefore, Parliament should address this matter,” Wickramaratne, who served as Deputy Minister of Investment Promotions and Highways before being appointed State Finance Minister, said.

Wickramaratne successfully contested the Colombo district at the 2015 general election. He switched his allegiance to the breakaway SJB in early 2020 in the wake of the split in the UNP. The former CEO of the National Development Bank entered Parliament for the third consecutive time in 2020 through the SJB National List.

Top SJB spokesperson said that the country urgently required an efficient system free of political interference to tackle major cases. The lawmaker said that the unprecedented scam in what he called sugar duty fraud perpetrated in Oct 2020 just two months after the general election underscored the need for examination of the whole system. Declaring that it hadn’t been an ordinary scam, MP Wickramaratne pointed out how a gazette bearing 2197/12 issued by the Finance Ministry on Oct 13, 2020 paved the way for the alleged fraud.

Anura Priyadarshana Yapa (SLPP/Kurunegala District), in his capacity as Chairman of the Committee on Public Finance (COPF) on January 5, 2021 declared that consumers hadn’t benefited at all from the sharp reduction of duty on a kilo of sugar from Rs 50 to 25 cents.

Referring to a statement dated January 7 issued by the Communications Department of the Parliament, lawmaker Wickramaratne said that COPF called for a report from the Finance Ministry in that regard. Responding to the COPF request, Secretary to the Finance Ministry S.R. Attygalle submitted a report dated Feb 24, 2021 that placed the loss of revenue suffered by the Treasury at Rs 15.9 bn during Oct 14, 2020-Feb 20, 2021.

Lawmaker Wickramaratne explained that in the wake of the issuance of Oct 13, 2020 gazette, major importers imported/cleared 266,212 metric tonnes of sugar (Sept-Nov, 2020) and 433,000 metric tonnes (Jan-June, 2021) at Rs 25 cents a kilo. However, MP Wickramaratne said that his calculation was different. The MP declared that the Treasury had suffered a revenue loss of Rs 35 bn at a time the government was struggling on the economic front.

MP Wickmaratne said that the COPF discussed the sugar duty scam again on Feb 25, 2021. Asked whether he represented the COPF, MP Wickramaratne said that he was a member of the other parliamentary watchdog, Committee on Public Enterprises (COPE). The former State Finance Minister emphasised that the losses inflicted on the Treasury was quite shocking against the backdrop of revenue loss of well over Rs 500 bn as a result of the questionable decision to do away with several taxes soon after the 2019 presidential election.

The MP was referring to quite controversial decision to do away with a range of taxes, including PAYE (Pay As You Earn), NBT (Nation Building Tax), Withholding tax, Capital Gain tax imposed on the Colombo Stock Exchange, Bank Debit tax and unprecedented reduction of VAT (Value Added Tax). The 15% VAT and the 2% NBT which amounted to 17% imposed on all goods and services were unified and reduced to 8%, effective from the first of December 2019. The decision was taken at the first cabinet meeting of the incumbent government held on Nov 27, 2019.

During Wickramaratne’s tenure as the State Finance Minister, the government income passed Rs 1,900 mark in 2018 and 2019 and dropped to Rs 1,300 bn in 2020.

Commenting on recent efforts taken by the government to stabilise the price of sugar, lawmaker Wickramaratne pointed out that those in authority had conveniently forgotten how the gazette issued on Oct 13, 2021 created an environment conducive for sugar fraud. Those responsible should be held accountable for driving the price of sugar to Rs 220-240 per kilo by August this year, the SJB official said, referring to a gazette issued subsequent to the Oct 13, 2021 duty reduction that was meant to sell a kilo of sugar at Rs 85. Now the same stocks that had been cleared at 25 cents a kilo over a period of time was being sold at the government set price at Rs 122.

Asked what he believed should be the government’s strategy, lawmaker Wickramaratne said that the market couldn’t be stabilised by price controls. The government should realise desired market stabilisation could be only achieved by ensuring uninterrupted supplies of whatever commodities in short supply, the former State Minister said.

The MP strongly disputed efforts to bring the price of essentials under control through what he called artificial measures. The SJB spokesman questioned the basis for the appointment of a serving military officer holding the rank of Major General as the Commissioner General of Essential Services.

MP Wickramaratne asked whether action had been initiated against those accused by the government of hoarding large stocks of sugar as well as paddy.

The Presidential Media Division last week named Pyramid Wilmar Company, Global Trading Company, Wilson Trading Company and R.G. Stores as hoarders. The National List MP said the government owed an explanation as to how the wrongdoers would be punished. The government couldn’t ignore the fact that hoarders earned massive profits at the expense of the hapless public.

The need for the establishment of an Office of Prosecutions should be studied taking into consideration Sri Lanka’s failure to tackle corruption, lawmaker Wickramaratne said, pointing out the questionable conduct of the AG in respect of some contentious cases.

Wickramaratne said that as a member of the previous administration he was ashamed of its pathetic failure to ensure action in respect of the national carrier, Sri Lankan Airlines, embroiled in massive corruption. Alleging waste, corruption, irregularities and negligence ruined the national career, the MP asked what really happened to the investigation ordered by President Gotabaya Rajapaksa in Feb 2020 into alleged financial irregularities in the transaction between SriLankan Airlines and Airbus. The presidential directive followed international media reports that the multinational aircraft manufacturer paid massive bribes to airline executives to secure contracts.

Pointing out that the alleged transaction took place in 2013, MP Wickramaratne according to disclosures in courts in Washington DC, Paris and London Airbus for years conducted a “massive scheme to offer and pay bribes” involving very senior executives in 16 countries, including SriLankan Airlines. The parliamentarian said that in spite of revelations that Airbus paid USD 2 mn to influence SriLankan Airlines’ purchase of 10 Airbus aircraft and the lease of an additional four aircraft to an intermediary company registered in Brunei under the wife of an executive at SriLankan Airlines, successive government failed to prosecute those responsible, the MP said.

“We cancelled the order and took other measures but never addressed the issue properly.” In 2017, Sri Lanka paid US$ 98 million in penalties for cancelling the order in 2016 and returning four A350 extra wide-body aircraft that are specifically designed for long haul routes and unsuitable for the airline’s business model.

Covid-19 has devastated the national economy and the country was facing a serious balance of payments crisis, the MP said. As part of Sri Lanka’s overall response to the situation, the government in consultation with all stakeholders should tackle waste, corruption, irregularities and negligence and also streamline the revenue collection process, the MP said.