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Corruption on the march: Eran calls for ‘Office of Prosecutions’ independent of AG



“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.

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GL follows up Udaya’s initiative, negotiates concessionary crude oil supplies with UAE



Balance-of-payment crisis continues to stagger govt.

By Shamindra Ferdinando

The United Arab Emirates (UAD) has agreed to discuss a possible arrangement to provide Sri Lanka crude oil on concessionary terms in the face of the country experiencing a severe balance-of-payments crisis, according to the Foreign Ministry.

Foreign Minister Prof. G.L. Peiris took up the matter with UAE Minister of Industry and Advanced Technology Dr. Sultan Al Jaber, on the sidelines of the 76th session of the United Nations General Assembly (UNGA) in New York. Prof. Peiris is on President Gotabaya Rajapaksa’s delegation to the UNGA.

In late August, Energy Minister Udaya Gammanpila sought the intervention of the Acting Head of the UAE Embassy in Sri Lanka, Saif Alanofy. Minister Gammanpila also met the Iranian Ambassador in Colombo in a bid to explore the possibility of obtaining oil from Iran on concessionary arrangements.

The Foreign Ministry statement on Prof. Peiris meeting with the UAE Minister dealt with the financial crisis experienced by the country. “Foreign Minister Peiris explained the challenges Sri Lanka is experiencing in respect of its external budget, as a result of the COVID-19 pandemic. Prof. Peiris focused in particular on the country’s requirement for oil and requested concessionary arrangements from the UAE.”

The Foreign Ministry quoted Minister Al Jaber as having said that the UAE would be happy to assist and proposed the establishment of a strategic framework to take the process forward.”

The ministry stressed that both sides agreed to follow-up rapidly.

Energy Minister Udaya Gammanpila earlier told The Island that concessionary arrangements were required to procure oil as part of an overall strategy to overcome the developing crisis.

Pivithuru Hela Urumaya (PHU) leader and Attorney-at-law Gammanpila said that increase in fuel prices in the second week of June this year was only a part of the government’s response to heavy pressure on foreign reserves. Minister Gammanpila said that the decision was taken close on the heels of dire warning from the Central Bank.

Minister Gammanpila said that in spite of foreign currency crisis, the government ensured an uninterrupted supply of fuel. According to him, Sri Lanka spent as much as USD 3.5 to 5 bn annually on oil imports depending on the world market prices.

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President attends 9/11 commemoration in NY



President Gotabaya Rajapaksa yesterday attended the special commemorative event near the Manhattan Memorial in the United States to mark the 20th anniversary of terrorist attacks in Washington and New York.

The terrorist attacks took place on September 11, 2001, targeting the World Trade Center in New York and the Pentagon, the headquarters of the United States Department of Defence.

Coinciding with the 76th Session of the United Nations General Assembly, the United Nations Office of Counter-Terrorism and the 9/11 Memorial Museum jointly organised the event. Other Heads of State and government representatives, who were in New York to attend the UN General Assembly, were also present at the event to pay tribute to those who lost their lives in those attacks.

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FSP calls on govt. allies not to pretend to oppose adverse deal with US firm



By Anuradha Hiripitiyage

Due to the secret agreement signed with US firm New Fortress Energy, Sri Lanka would soon face a situation akin to the one already faced by Ukraine, the Frontline Socialist Party (FSP) predicted yesterday.

“Sri Lanka is trying to reduce its dependency on coal and switch over to LNG. With this in mind, several coal and diesel power plants are to be converted into LNG in the coming decade. Now, we will entirely depend on the US to provide us with LNG to power these plants. Given that the US intends to control the seas in which Sri Lanka is placed strategically, they will not let us off the hook once they establish their foothold here. We are in deep trouble,” FSP Propaganda Secretary, Duminda Nagamuwa said.

Nagamuwa said that some constituents of the government were pretending that they opposed the transfer of government’s shares in the Yugadanavi Power Plant to New Fortress Energy. “But this is not the time for theatrics but for concrete action”, he said.

Nagamuwa said that the agreement between the government and US Company New Fortress Energy to construct a new offshore liquefied natural gas (LNG) receiving, storage and regasification terminal at Kerawalapitiya as well as the transfer of government’s shares in the Yugadanavi Power Plant had to be scrapped.

“Even government ministers agree that the agreement was not discussed with them. Several affiliates of the government are trying to convince the people that they are fighting this decision from inside. However, past experience has shown that when push comes to shove they will stay with the government. They must show the leaders of the government that they are not puppets,” he said.

Nagamuwa said that if those affiliated to the government were serious in their opposition to undermining Sri Lanka’s energy security they should show their commitment by doing something concrete.

The Yugadanavi Power Station at Kerawalapitiya already produced 300 MWs of energy and there was a plan to build another 350 MW plant there. The US Company had now been allowed to build an offshore LNG receiving, storage, and regasification terminal and to provide LNG to the existing Power Station and the new 350 MW power plant to be built, he said.

“Now we are under the power of the US. We will soon be facing the plight of Ukraine,” he said.

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