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Central Bank salary controversy: MP finds fault with composition of Governing Board

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Gevindu Cumaratunga

…  asks House to rectify fundamental blunder

by Shamindra Ferdinando

Lawmaker Gevindu Cumaratunga, on behalf of the Uththara Lanka Sabhagaya (ULS), has requested the Chairman of the Committee on Public Finance (CoPF) Dr. Harsha De Silva to propose fundamental change to the Central Bank of Sri Lanka Act (No 16 of 2023) by including Secretary to the Finance Ministry/Treasury Secretary in the decision-making Governing Board (GB) of the Central Bank.

The Governing Board consists of Dr. P Nandalal Weerasinghe (Chairman), A N Fonseka, Dr. Ravi Ratnayake, Anushka S Wijesinha, Vish Govindasamy, Rajeev Amarasuriya and Manil Jayesinghe.

The SLPP National List MP has, in a letter dated March 07, 2024, addressed to de Silva, said that the controversial salary increase granted by the GB with effect from January 1, 2024, should be examined against the backdrop of the Finance Ministry Secretary not being a member of that decision-making body.

The leader of the Yuthukama civil society group said that the Finance Ministry Secretary had been a member of the five-member Monetary Board (MB) that dealt with salary increases in terms of the Monetary Law Act that was in force since 1950 until the enactment of the 2023 law in response to the deterioration of the national economy to such an extent the country halted paying debt.

The MB comprised Central Bank Governor as its Chairman, Finance Secretary both ex-officio members and three appointed members.

Declaring that leaving Finance Secretary out of the decision-making process a fundamental and catastrophic change in the new law that governed the Central Bank, MP Cumaratunga said that the common stand taken by Central Bank Governor Dr. Weerasinghe and CoPF Chairman Dr. de Silva that the salary increases were always decided by then MB on its own was not acceptable.

In terms of the new law, the GB is tasked with overseeing the administration, management and determination of general policies.

MP Cumaratunga said that the inclusion of the Finance Secretary in the MB made a huge difference as he couldn’t have ignored under any circumstances the salary structures of other categories of public sector employees when deciding on increments to Central Bank employees.

Parliament passed the Central Bank of Sri Lanka Act (No 16 of 2023) in July last year. Of 225 MPs, only 66 voted for the new law whereas 24 voted against. MP Cumaratunga said that he was among those who voted against the new law.

Pointing out President Ranil Wickremesinghe, in his capacity as the Finance Minister, asked the CoPF Chairman to submit a report on the Central Bank salary issue, MP Cumaratunga said that he expected the House Committee to recommend the inclusion of the Finance Secretary.

The Island sought an explanation from MP Cumaratunga what he expected to achieve by his proposal as the current Finance Secretary Mahinda Siriwardena as a Deputy Governor of the Central Bank, too, received the disputed salary increase. MP Cumaratunga said that if the Finance Secretary also served on the GB, he would have to explain how he agreed with the rest of the board while repeatedly demanding curbs on state sector expenditure. The MP pointed out that just a year ago Wickremesinghe-Rajapaksa government indefinitely put off Local Government polls claiming that it couldn’t afford to allocate funds for the conducting of the election. MP Cumaratunga said that at the end, the Finance Secretary, in his capacity as Deputy Governor now entitled for Rs 1.7 mn monthly salary.

Referring to recent statements made by President Ranil Wickremesinghe, at an event held at the BMICH on March 03, regarding the enactment of 42 new laws within 14 months since his election lawmaker Cumaratunga said that such boasts seemed absurd when the whole law-making process was in deepening turmoil.

The MP pointed out that the continuing controversy over the enactment of the Online Safety law that ultimately was taken up even at the ongoing 55th session of the Geneva-based United Nations Human Rights Council (UNHRC) underscored the gravity of the developing situation.

The President owed an explanation how Parliament enacted that law disregarding specific recommendations made by the Supreme Court to make it compatible with the Constitution.

MP Cumaratunga said that Justice Minister Dr. Wijeyadasa Rajapakshe, PC, recently declared that a new law was required to ensure that no one operated outside the Constitution. Pointing out that this declaration was made in the wake of the Central Bank salary issue, MP Cumaratunga emphasised that the country was paying a very heavy price for irresponsible approach towards the enactment of new laws.



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Lanka enters new phase of prosecutions as hurdles clear

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MONETABRIEF –The prosecution of high-profile individuals from the former Rajapaksa administrations is set to escalate this month with the clearing of legal hurdles and administrative bottlenecks, according to officials involved in the process.

Former president Gotabaya Rajapaksa’s attempt to secure an order preventing his arrest in connection with the Easter Sunday massacre was turned down by the Court of Appeal on Thursday.

An overseas travel ban has been in operation against Rajapaksa since June, but the Criminal Investigations Department made no move to question him. He instead filed a writ application seeking an order preventing his possible arrest.

President of the Court of Appeal Rohantha Abeysuriya noted that the court would not interfere with the investigative process. Any attempt by the court would amount to an obstruction of the investigation.

In an unrelated case, the same court rejected an application by opposition legislator Dilith Jayaweera seeking the quashing of a contempt charge filed against him by the Fort magistrate. The charges against Jayaweera and a few other opposition politicians are expected to be taken up in the coming week.

Jayaweera and other opposition politicians — Wimal Weerawansa, Udaya Gammanpila, Sugeeshwara Bandara, and Asanka Navaratne

— were hauled up over their remarks relating to the arrest of Suresh Sallay, the former head of the State Intelligence Service.

SLPP academic Mahinda Pathirana is also charged over his public comments about Sallay’s arrest in February under the draconian Prevention of Terrorism Act.

Former president Mahinda Rajapaksa’s son, legislator Namal Rajapaksa, is already in remand custody following his arrest in connection with three cases of bribery and money laundering relating to the 2013 Airbus deal and the Krrish property development in Colombo.

Although Namal has been granted bail in the Airbus money laundering charge, he is in custody until October 13 over the bribery charge relating to the same Airbus transaction. His arrest is under a provision of the Anti-Corruption Act that does not allow a magistrate to grant bail unless under exceptional circumstances.

Meanwhile, his mother Shiranthi Rajapaksa, who had been asked to report to the Financial Crimes Investigations Division on September 24, was a no-show and was yet to return from Singapore.

She had travelled overseas on September 16, and a family spokesman said she was handed the FCID summons at the departure lounge of Bandaranaike International Airport just before she boarded a flight to Singapore.

At the time, the family spokesman said she was due to return in three days.

“We will see greater momentum in the legacy cases in the coming weeks,” an official involved in the prosecutions said.

“We have cleared the legal hurdles to press ahead with more arrests,” he said.

“We are working on a few administrative issues which will be resolved very soon.”

The controversial prosecution of former President Ranil Wickremesinghe is dragging on without him being formally indicted since his arrest in August last year. The Fort magistrate has listed the case again for November 11, when the Attorney-General is expected to report on his decision regarding action against Wickremesinghe.

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Police warn: Court evaders face property seizure

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Police have reminded the public that courts have the power to take legal action against individuals who evade arrest or remain in hiding after warrants have been issued against them.

Police said that under Section 60 of the Code of Criminal Procedure Act No. 15 of 1979, a court could issue a written proclamation requiring a person evading arrest under a warrant to appear at a specified place and time.

The proclamation must allow the person at least 30 days to appear before court, Police said.

If the person fails to appear even after the proclamation has been issued, the court may take further action under Section 61 of the Act.

This includes issuing an order for the attachment of the movable or immovable property belonging to the person concerned.Police issued the reminder highlighting the legal measures available against persons who deliberately evade arrest and remain in hiding after warrants have been issued.

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Nearly 20 Iranian tankers stranded off Lanka amid US sanctions

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Around 20 Iranian oil tankers are reportedly stranded about 15 nautical miles off Sri Lanka’s southwestern coast, with several vessels facing shortages of food, fuel and fresh water amid tightening US sanctions and maritime restrictions, The Wall Street Journal reported.

According to the report published on Thursday (1), US officials have in recent weeks urged Sri Lanka to prevent local vessels from supplying essential provisions to the tankers and their crews.

The report, citing Sri Lankan Government documents and companies involved in supplying the vessels, said the US had raised concerns over assistance being provided to the sanctioned tankers.

The situation follows the United States’ decision to reimpose a maritime blockade of the Strait of Hormuz in July, which has reportedly left dozens of Iranian and Iran-linked tankers involved in transporting sanctioned oil to China stranded near Asian countries, including Sri Lanka and Malaysia.

Most of the vessels are reportedly empty tankers that had previously transported Iranian crude to Asia, often through ship-to-ship transfers, before preparing to return to Iran for additional cargo.

The WSJ reported that the US Embassy had warned Sri Lanka in August that it was monitoring 19 Iranian tankers off the country’s western coast and had raised the possibility of secondary sanctions against companies providing services to sanctioned vessels.

Sri Lankan authorities have maintained that the vessels are located outside the country’s 12-nautical-mile territorial waters and that the Government is not providing them with logistical assistance.

Meanwhile, shipping companies told the WSJ that obtaining approval to supply essential items, including food, drinking water and fuel, as well as repair services, to the Iranian vessels had become increasingly difficult.

Separately, Reuters reported in late August that 27 sanctioned Iran-linked tankers were waiting off Sri Lanka without cargo.

The Trump administration has also imposed additional sanctions on Iran and warned countries and companies trading with Tehran of potential consequences, as Washington seeks to pressure Iran to make concessions amid the ongoing conflict.

Similar concentrations of Iranian-linked tankers have been reported off Malaysia, where waters have historically been used for ship-to-ship transfers of Iranian crude destined mainly for China.

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