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‘Bad Boy Billionaires’ of Sri Lanka

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By UPALI COORAY

This headline quotation in part, is the title of a Netflix series “Bad Boy Billionaires”. This Netflix series brings out some of the epoch-making financial scams in India. The documentary film exposes the truth in an investigation in major corruption scandals, money laundering in India involving Vijay Mallaya (Kingfisher Airlines) Subrata Roy (Sahara India) Nirav Modi (Gitanjali group) Ramalinga Raju (Sathyamgani computers)

Among these scammers Subrata Roy has done something which has parallels in Sri Lanka.

India’s market regulator petitioned the Supreme Court to direct tycoon Subrata Roy to an immediate payment of 626 billion rupees ($8.4 billion) meant for poor investors.

The Securities and Exchange Board of India said the outstanding liability of the Sahara India Parivar group’s two companies and the conglomerate’s chief Roy stand at 626 billion rupees, including interest, according to court filings.

India’s Supreme Court in 2012 ruled that Sahara group of companies violated securities laws and illegally raised over $3.5 billion. The companies said monies were raised in cash from millions of poorest of the poor of Indians who could not avail banking facilities. SEBI could not trace the investors and when Sahara firms failed to pay up, the court sent Roy to jail.

Roy, who at different times owned an airline, Formula one team, cricket team, plush hotels in London and New York, and financial companies, stayed in jail for over two years and has been out on parole since 2016.

The Sahara story, almost a decade after the final judgment, is far from over. Roy has so far deposited over 150 billion rupees, SEBI said in the court filing, while the Sahara group said it had deposited 220 billion rupees.

Financial scams in our country have increased in recent times and not a day passes without news of customers being cheated by finance companies, etc. Let’s start with the oldest of Sri Lankan con- artistes Emil Savundra or Emil Savundranayagam, who was a Sri Lankan who settled down in Britain in 1960, a born cheat. The collapse of his Fire, Auto and Marine Insurance Company left about 400,000 motorists in the United Kingdom without cover.

As a post-war bootlegger, Savundra committed bribery and fraud on an international scale before settling down in the UK to sell low-cost insurance in the fast-growing automotive market. By defaulting on mandatory securities, he funded a lavish lifestyle and travelled in fashionable circles even with the famous Christine Keeler and Mandy Rice-Davies. He was into power boat racing too.

This drew scrutiny by the press, which discovered major frauds. In a TV interview with David Frost, Savundra demonstrated contempt for his defrauded customers. The police had been investigating him, and he was soon arrested and sentenced to eight years imprisonment. Released after six, Savundra died two years later as a drug addict.

Piyadasa Ratnayaka alias Danduvam Mudalali of Hungama, Southern province, had allegedly accepted deposits from over 20,000 investors in a pyramid scheme. He was on bail for the alleged financial scam. Mudalali was killed by an unknown armed gang in Pusallawatte, Kuruwita.

Hideki Finance and Investments, which went bust in 1987, had over 4,000 depositors. The Central Bank had to intervene and pay the depositors their dues in instalments.

The multi-million rupee ‘Sakvithi’ scam by Sakithi Ranasingha did not spare even the handicapped or the sick, as it plundered the wealth of thousands of unsuspecting customers who suddenly realised that all their savings had gone up in smoke. About 5,000 investors were defrauded to the tune of 900 million rupees. A Police inspector was also allegedly involved in the scam, which was exposed following a raid by the Central Bank on unregistered financial institutions.

Kingsley de Silva, an ex-naval rating suffering from a chronic kidney ailment, has been robbed of Rs. 1.2 million — money he had saved for a life-saving surgery. This money, the 65-year-old Mr. Silva said, included payment he received from the Navy on retirement and the rest from the part-sale of ancestral land in Maharagama. He did not know what to do or whom to turn to.

Dulanjan Atapattu, a retired government teacher was due to undergo heart surgery. He needed extra money for the operation and medication, and invested his savings in what he thought would be an income-generating scheme.

“I invested Rs. 2 million after selling my house. Initially, I got a monthly interest, and was impressed with the return. But I was soon to be proved wrong,”

With a self-esteem as philanthropists, embracing the word of God, the very name Deshamanya Dr. Lalith Kotelawala and Lady Dr. Sicille Kotelawala evoked respect, trust and above all a sense of security. That was why 9,054 people in this country, trusted the duo with millions of rupees, in some cases tens of millions of rupees in life savings. Maybe part of those millions belonging to some depositors was black money. Perhaps, some of them invested their money to evade paying tax to the government, or they were just plain greedy or a mixture of both. After all, why did they not invest the monies with financially stable banks?

Whatever the case, they were confident that their savings/loot would be safe in the hands of two human beings held in the highest esteem. There were leading businessmen, civil servants, Buddhist monks, Christian clergy and world-renowned Sri Lanka cricketers, who would never have resorted to money laundering, were also deceived.

When Golden Key collapsed like a pack of cards in December in the year 2008, and as the unsavoury details unraveled in staggered scenes of drama, horrified, dismayed depositors who had been earning as much as 30 and 32 percent on their investments at Golden Key, were forced to come to grips with the fact that soon their monies would be confined to mere numbers on a piece of paper. Soon to be identified as one of the biggest white-collar frauds.

Held in esteem by those who claimed to be his friends and say they trusted him wholeheartedly. Today, these same people spit his name out with vilification. Thousands of families robbed of a monthly interest amounting from thousands to millions of rupees, earned off their capital investment with Golden Key.

At least one depositor from this list, Lady Dr. Sicille Kotelawala will have no such qualms. Her investment in Golden Key was to the tune of Rs. 10.6 million only. A paltry sum by her standards. Even that most likely is what she skimmed off from the company itself. After all, according to court documents she was paid a staggering Rs. 3.5 million a month for being the Deputy Chairperson was just peanuts. She was rich enough not to have to worry about paying for groceries or medicines.

From lower middle-class families to upper, from the rich to the superrich there was no class distinction between the 9,054 people who entrusted their monies with Golden Key.

The strange thing is that most of the big depositors are businessmen who understand finance. They would have known that the unrealistically high interest rates paid by Golden Key could not be sustained. They would have also known that it was not registered with the Central Bank. But then again, the company had been in existence since 1978, and the collapse of the Ceylinco Empire had been predicted for more than a decade. You can run a pyramid scheme for so long, only if new depositors keep depositing money in.

After 10 years of agitation the depositors were paid by the Central Bank with funds from liquidated assets of the collapsed venture.

What is important to note is that most of these company founders were well-respected businessmen in Sri Lanka.

Justin Kotalawala the founder of Ceylinco insurance was a well-respected businessman in the country. He was related to one-time prime minister Sir John Kotalawala.

Sakvithi Ranasingha was a private tuition master highly respected by his students and their parents. He abused his reputation to deceive the unsuspecting depositors and lived a lavish life. In fact, he taught English to prisoners while in jai.

Late E.A.P Edirisinghe and his spouse Late Soma Edirisinghe – Desha Bandu Desha Shakthi and a Honorary Doctorate from Open University of Sri Lanka, an unparalleled feat of being awarded the “Lion of the year” on four occasions and many more, were entrepreneurs who would never have resorted to deception. They were pawn brokers, jewellers, film producers, cinema and TV channel owners and philanthropists. The ETI finance matter is sub judice and, therefore, will not be discussed any further.

Late Kattar Aloysius, the founder of Free Lanka Trading company, a well-known businessman in the country who was initially a major exporter of dried fish, but subsequently diversified into industrial products, granite, indenting agent for importing commodities to Sri Lanka, agents for alcoholic beverages such as cognac, Dewar’s whisky, etc. He was respected among the business circles here and abroad.

Now, the name of Aloysius is synonymous with the Treasury bond scams.

As you sow so shall you reap.

 

 



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Opinion

How many people can the Earth sustain?

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=On Nov 15 November 2022, we became a world of 8 billion people. 

It’s a milestone we can celebrate, and an occasion to reflect: How can we create a world in which all 8 billion of us can thrive? The growth of our population is a testament to humanity’s achievements, including reductions in poverty and gender inequality, advancements in health care, and expanded access to education. These have resulted in more women surviving childbirth, more children surviving their early years, and longer, healthier lifespans, decade after decade.

Looking beyond the averages, at the populations of countries and regions, the picture is much more nuanced – and quickly takes us beyond the numbers themselves. Stark disparities in life expectancy point to unequal access to health care, opportunities and resources, and unequal burdens of violence, conflict, poverty and ill health.

Birth rates vary from country to country, with some populations still growing fast, others beginning to shrink. But underlying these trends, whichever way they point, is a widespread lack of choice. Discrimination, poverty and crisis – as well as coercive policies that violate the reproductive rights of women and girls – put sexual and reproductive health care and information, including contraception and sex education, out of reach for far too many people.

We face serious challenges as a global community, including the mounting impacts of climate change, ongoing conflicts and forced displacement. To meet them, we need resilient countries and communities. And that means investing in people and making our societies inclusive, so that everyone is afforded a quality of life that allows them to thrive in our changing world.

To build demographic resilience, we need to invest in better infrastructure, education and health care, and ensure access to sexual and reproductive health and rights. We need to systematically remove the barriers – based on gender, race, disability, sexual orientation or migration status – that prevent people from accessing the services and opportunities they need to thrive.

We need to rethink models of economic growth and development that have led to overconsumption and fuelled violence, exploitation, environmental degradation and climate change, and we need to ensure that the poorest countries – which did not create these problems, yet bear the brunt of their impacts – have the resources to build the resilience and well-being of their growing populations.

We need to understand and anticipate demographic trends, so that governments can make informed policies and resource allocations to equip their populations with the right skills, tools and opportunities.

But while demographic trends can help guide the policy choices we make as societies, there are other choices – including if and when to have children – that policy cannot dictate, because they belong to each individual. This right to bodily autonomy underlies the full range of our human rights, forming a foundation for resilient, inclusive and thriving societies that can meet the challenges of our world. When our bodies and futures are our own, we are #8BillionStrong.

(UNFPA)

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Opinion

Sri Lanka Now Famous For Bribery And Corruption

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Bribery and corruption are two words that Sri Lanka has become “famous” for during the last few decades. This was something rare about half a century ago. We very rarely heard of Cabinet Ministers resorting to bribery, except in two cases.

If I remember right one was indicted in courts and had to serve a period in Her Majesty’s free hostel. The other was one of the members of the multi-Member Kadugannawa constituency, but it was not a very serious one as it involved the granting of appointments like sub-Post Mistress. There was also a businessman nabbed for giving bribes and held in a house in Paget Road. However, then it was rare and only a few cases such as that mentioned were known. In addition, these instances did not in any way effect the economy of the country or the people.

Gradually, the art of bribery and corruption became so well-known that most investors and contractors from abroad and locally were not willing to tender for essential supplies and construction of buildings and roads as they had to oil the palms right down the line. At one time a Cabinet Minister was nicknamed Mr. Ten Percent indicating his ‘cut’ on any tender or contract!

This country became famous for bribery and corruption in a big way after the tsunami in 2004 with the Helping Hambantota project, where funds from abroad to assist the victims went into a wrong pocket.

It was also very recently that a Cabinet Minister was reported to the President regarding a bribe he had solicited from a foreign tenderer. The then President asked him to step down till an inquiry was held. But with the change in the top position, a retired judge was appointed to inquire into this allegation. As in the bond scam the inquiry found him not guilty, and he was reinstated in the Cabinet. It is only in Sri Lanka that this type of thing could happen.

The Sri Lankan diaspora would have helped the country to recover from the economic mess the leaders plunged it into by sending money from abroad. But they did not want to do so as they knew what would happen to such funds. Even people here requested them not to send assistance till the corrupt leaders have been got rid of.This resplendent island may have been the pearl of the Indian Ocean at one time but now it has become notorious for bribery and corruption! When will we get honest leaders to run this country as was done about a century ago?

HM NISSANKA WARAKAULLE

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Opinion

The Rehabilitation Bill

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The high priests of our temple of justice has reaffirmed our faith in our legal system and the rule of law. A country without the rule of law will disintegrate into worse chaos than we are plunged in today.

It was heartening to see the determination by the Supreme Court on the Rehabilitation Bill. The legal preamble is a bit hard for an average lay person to follow. To my understanding, they have thrown some strong road blocks on the passage of this Bill. Well and good. I don’t think it will be that easy for the govt to surmount them. The legal fraternity, civil society and ordinary citizens, must fight hard to see that there is no transgression of the determination of the Supreme Court.

We need not and don’t need to incarcerate anybody. Those addicted to drugs should be handled by the health dept. or better still their families. These are our misguided sons and daughters who have taken a wrong path due to a failure in their families and the society around them. They need to be handled with care and consideration. Institutionalizing them would make the problem a costly failure.

Our lawmakers should hang their heads in shame if they vote for this draconian Bill as they may be viewed as persons who serve the wishes of the rulers and not those of the people.

Padmini Nanayakkara
Colombo-3

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