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

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“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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Unions resist tripartite EPF management plan

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… warn of dire consequences

A group of trade unions and civil society groups has requested President Anura Kumara Dissanayake to abandon his government’s controversial plan for the proposed tripartite management of the EPF.

The group has told the President: “We strongly object to the government’s plan to transfer the EPF to a tripartite board—jointly promoted by the Employers’ Federation of Ceylon (EFC), International Monetary Fund (IMF) and the International Labour Organisation (ILO)—and to increase the investments of those funds within private equity and debt markets.

“While the EFC and the government jointly project this plan as a ‘modern governance framework’, it poses a serious threat to the EPF’s financial stability, fiduciary conduct, and returns to workers’ life savings, with severe consequences for broader macroeconomic stability. Rather than replacing the corruption existing in the public sector, this tripartite framework paves the way for a corporate takeover of the EPF. Through this, the fund is exposed to unlawful business practices such as insider trading using internal information of EPF investments, conflicts of interest and corporate bailouts of unstable private companies.

“Sri Lanka’s corporate sector has a tremendously negative track record, which you alluded to during your victorious election campaign in 2024. This was recently unravelled by the multi-billion-dollar illicit capital flight through trade misinvoicing, which your administration is now actively working to curb in the imports sector.

“The recent banking sector fraud exceeds Rs. 13 billion; widespread corporate tax evasion destabilised the fiscal position (Sri Lanka Auditor General’s Department Annual Reports) and consequently inflated the tax burden on the general public. The EFC has found it convenient to remain silent about these crimes, possibly assuming that their silence would preserve their social standing. Considering this inherent corruption within Sri Lanka’s corporate sector and its disregard to the living standards of the general public, there is no realistic basis to integrate corporate interests to actively manage the EPF. The corporate sector of Sri Lanka has not developed sufficiently on technical and ethical grounds to safely entrust the largest retirement savings pool in the country. The EPF is a captive fund that has no mechanism for the owners to divest if the management is corrupt. This further increases the possibility of corporate fraud when the management of the fund is jointly held with the corporate sector.

“Furthermore, during the recent public discussion with trade unions, Deputy Minister of Finance Dr. Anila Jayantha pointed out that the domestic debt restructuring (DDR) would inflict a loss of Rs. 600 billion to the EPF. Our independent calculations—formally submitted as an affidavit to the Supreme Court approved by the Federation of University Teachers’ Associations in 2024—reveal that nominal loss alone is Rs. 634.4 billion. When factoring in foreclosed reinvestment returns, the true loss skyrockets to Rs. 1,711 billion, wiping out 48% of the fund’s projected gross income for the 2023 – 2028 period. Under the pretext of safeguarding the banking system, this colossal robbery preserved high yields on government bonds held by commercial banks and high-net-worth individuals, subsequently reaping them astronomical profits. Now, the exact same plunder is rearing its head again disguised as a tripartite committee.”

“The main arguments supporting our resistance and viable alternatives for optimising EPF management directly under the Central Bank of Sri Lanka (CBSL), are outlined below.

“Objections to the government’s tripartite proposal:

1. The “International best practice and conflict of interest fallacies”

The government holds that tripartite management of pension funds is the “international best practice” and that there is a “conflict of interest” in CBSL managing the EPF. They are key pillars justifying government’s tripartite proposal.

These two positions are shockingly misleading given that four of the five largest pension funds in the world, in Norway, Japan, the U.S., and Singapore, are managed directly by state bodies or central banks. Therefore, ‘international best practice’ in pension fund management is the exact opposite of what the government and the IMF are proposing. We hence reject these baseless positions.

2. Corporate captivity and bailouts

It is clear that the EFC is desperately pushing for this proposal at a time of global uncertainty, to cushion the effects of the crisis and maximise gains. Under corporate influence within the proposed tripartite board, the private conglomerates can use the multi-trillion-rupee EPF to continue their unstable commercial operations without having to risk their own capital or savings to do so. This will severely erode the financial stability of the EPF and its returns.

3. Risk of front running

“Because the EPF is a colossal fund, its investment decisions can alter asset prices. This creates immense monetary value for the information generated by its investment decisions. Corporate representatives on the proposed tripartite board will be perfectly positioned to use this information to trade ahead of the EPF (front-running), buying assets cheaply and dumping them onto the EPF at inflated prices for guaranteed corporate gain, resulting in a reduction of returns to the EPF.

4. Unavoidable loopholes

“Presence of a separate group of investment analysts, trade union representatives and government officials within the proposed tripartite structure cannot prevent pre-market corporate access to EPF’s investment decisions. Investment proposals made by the analysts has to be first approved by the proposed tripartite committee, making it impossible to prevent corporate access to insider information on EPF investments.”

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Two arrest warrants issued for Gnanasara thera

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Galagoda Aththe Gnanasara

The Colombo High Court and Court of Appeal yesterday issued arrest warrants for the Bodu Bala Sena general secretary Galagoda Aththe Gnanasara in a case involving an alleged statement insulting Islam.

The arrest warrants were issued on Tuesday and Wednesday. The Court of Appeal issued an open warrant two weeks after the court rescinded the presidential pardon granted to the thera when he was serving a six-year term for contempt of court.

The Appeals Court also imposed a travel ban on the monk and ordered that the Controller General of Immigration and Emigration be informed of the restriction.

The case was taken up before Colombo High Court Judge Buddhika C. Ragala. Gnanasara Thera was not present when the case was called.

A medical report was submitted stating that Thera was unwell, while his sureties also failed to appear before court. His counsel, Asoka Weerasuriya, told court that his client wished to bring the case to an early conclusion and that representations had been made to the Attorney General in that regard.

However, after considering the submissions, the High Court judge said he was not satisfied with the medical report submitted on behalf of the accused. The court also noted the failure of the sureties to appear.

The judge subsequently ordered that Gnanasara Thera be arrested and produced before court.The Attorney General filed the case under provisions of the Penal Code, alleging that remarks made by Gnanasara Thera concerning the Holy Quran amounted to an insult to Islam.

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CA dismisses GR’s writ petition against arrest

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Gotabaya

A two-member bench comprising Court of Appeal President Justice Rohantha Abeysuriya and Justice Sarath Dissanayake yesterday (1) dismissed a writ petition filed by former President Gotabaya Rajapaksa seeking judicial intervention to prevent his arrest under the Prevention of Terrorism Act (PTA) in connection with the ongoing investigations into 2019 Easter Sunday terror attacks.

The writ petition was rejected in limine.

In the petition, the former President cited Inspector General of Police Priyantha Weerasooriya, Criminal Investigation Department (CID) Director Shani Abeysekera, the Officer-in-Charge of the CID’s Special Investigations Unit and the Attorney General as respondents. The ex-President sought the court intervention after the arrest of former head of the State Intelligence Service (SIS) retired Maj. Gen. Suresh Sallay over the Easter Sunday attacks.

Since then , former Director of Directorate of Military Intelligence (DMI) has been named as a suspect.

Earlier, the Fort Magistrate’s Court imposed a travel ban on him in relation to investigations stemming from allegations made by Asad Moulana in the Channel 4 documentary on the Easter attacks.

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