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Easter Sunday probe: CB not informed of Rs 4 bn Hizbullah et al received from overseas

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By Rathindra Kuruwita

Two current accounts, operated by former Eastern Province Governor M. L. A. M. Hizbullah and others at the Bank of Ceylon (BoC) branch at Kollupitiya, had received foreign funding close to Rs. 4 billion within three years, the Presidential Commission of Inquiry (PCoI) probing the Easter Sunday attacks was informed yesterday.

It was also revealed that the BoC had not informed the Central Bank of Sri Lanka (CBSL) of those transactions although it was required to do so in respect of foreign transactions over one million rupees.

Ms I.C.K. Kannangara, former Manager of the BoC Kollupitiya branch, told the PCoI that foreign funds had been sent the two accounts from 2016 to 2019.

Kannangara said that one account, for Sri Lanka Hira Foundation had received Rs. 313,128,281.59. The funds had been received in 12 separate transactions between March 11, 2016 and April 24, 2019. While a significant portion of the funds came from Ali Abdullah Al Juffali inheritance, Rs. 284.8 million, the rest of the funding came from Siddique and Diana Osmond and Credential Limited from London. Al Juffali family is one of the richest Saudis with an estimated worth of $19.8 billion.

Hizbullah, Abdul Samsudeen and Faleel Mohommad operated this account, opened on August 18, 1993 in the name of a social service organisation. However it was only on September 09, 1993 that Sri Lanka Hira Foundation had been certified by the Department of Social Services. Kannangara responding to a question posed by the Commissioners admitted that allowing the foundation to open a bank account without the proper registration was irregular.

The Batticaloa Campus Private Limited had received Rs. 3.65 billion from Ali Abdullah Al Juffali inheritance between March 04, 2016 and June 07, 2017, the commission was informed.

The funds had been credited on seven separate occasions. The dates and details of these transactions are as follows: Rs. 695.8 million on March 04, 2016, Rs. 546.1 million on May 05, 2016, Rs. 526.9 million on August  03, 2016, Rs. 424.6 million on October  05, 2016, Rs. 541.4 million on an undisclosed date, Rs. 458 million on March  04, 2017 and Rs. 450.2 million on June 07, 2017.

Commissioners then asked Kannangara if she had been aware of the Central Bank of Sri Lanka (CBSL) rule making mandatory for financial institutions to inform the CBSL’s Financial Intelligence Unit of Sri Lanka (FIU) if they received a cash transactions and/or electronic funds transfers of an amount exceeding rupees one million (Rs. 1,000,000), or its equivalent in any foreign currency. Kannangara answered in the affirmative.

“In this case a number of transactions over one million rupees have taken place, but you inform the FIU?” the Senior State Counsel leading the evidence asked

Kannangara said that it was the Chief Compliance Officer of BoC who usually contacted the FIU. The Kollupitiya Branch had already identified the two accounts as high risk accounts, the witness said.

Kannangara said: “There were significant transactions and in 2016 and 2017, we informed the Chief Compliance Officer of BoC that special attention must be paid. The Chief Compliance Officer asked us to submit all documents and we did. However, on both occasions, the Headquarters decided that these accounts are not suspicious.”

Therefore, BoC had not reported the accounts to the FIU of CBSL before the Easter Sunday attacks, she said.

“When you spoke to the Chief Compliance Officer about these accounts, were the name of a particular person mentioned?” a Commissioner asked the witness.

Kannangara said: “Yes, Hizbullah’s name was mentioned. He was a Governor at that time.”

A commissioner asked, “Did that play a role in deciding that the accounts were not suspicious? How did you know that the money was being used to build a campus?”

“We saw media reports,” she said. The witness is to provide information on three more bank accounts operated by Hizbullah at the BoC Colpetty Branch.

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There’s nothing prescribed as Parliament has failed to enact legislation for contempt of court — Sumanthiran

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TNA MP M. A. Sumanthiran, in an intervention in Parliament, said he was privileged to appear for Ranjan Ramanayake, a clean, honest politician in the Supreme Court and he was proud of that.

Nevertheless, Ranjan Ramanayake was convicted and sentenced. The sentence of four years’ rigorous imprisonment was unprecedented and exceptionally severe, and Parliament has a responsibility in this regard because we have not enacted a law for contempt of court, the MP noted.

At the outset, he said, “I want to flag one or two issues concerning the responsibility of the Parliament in this regard. But before I do that I am bound by law and tradition to disclose my interest in the matter. I am the counsel who appeared for Hon. Ranjan Ramanayake in the Supreme Court”.

This has an implication to the article in the constitution that the Hon. Leader of the Opposition just mentioned because it says for an offense for which the prescribed punishment is two years or more. But there’s nothing prescribed, nothing prescribed in the law because for long Parliament has failed to enact legislation for contempt of court, the TNA MP said.

Although there had been in the public as well, a lot of instances where drafts have been made, we have not done that – that is one. And by failing to do that, it has been like the freedom of the wild ass; anything can be given as a sentence and that is not a good thing.  I don’t want to go into the merits of the case or anything like that, but in this case Parliament has to take steps, to enact a law, he further said.

English law is supposed to be the substantive law because we don’t have a statute law now, and in English law itself scandalizing the court is no longer an offence of contempt of court. But unfortunately the court disregarded that, and has misdirected itself – that’s my position, Sumanthiran continued.

“But I want to bring to your notice a serious lacuna in the law with regard to a statue for contempt of court that has resulted in this unprecedented injustice to an honest Member of Parliament”, he added.

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Colombo share market gallops to all time highs

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The Colombo Stock Exchange (CSE) galloped last week with the benchmark All Share Price Index (ASPI) hitting an all time high on Monday and improving on that performance on subsequent trading days to close the week at 8,463 points on Friday. The more liquid S&P Index that normally trails the ASPI also gained sharply though less so than the benchmark index.

Brokers and analysts attributed the surge to prevailing low interest rates and said that people holding funds in fixed interest instruments have seen greater potential in the stock market and have so far not been proved wrong.

“Take the case of vehicle importers,” said one businessman. “With imports disallowed, cash that would have been once used to replenish inventory becomes available for investment elsewhere. The stock market is a magnet for such funds.”

Also, many companies have resorted to a share split strategy to make their shares both more liquid and more affordable on the market.

“Take the example of a fifty-rupee share split into two. Theoretically, it should then trade at Rs. 25 a share after the split. But often it does better than that at no cost to the company that had split the share because its stated capital remains what it was,” explained and analyst.

“It’s different in the case of bonus shares or scrip issues as they are called where reserves are capitalized to pay for the new shares priced at realistic values.”

Last week the Hayleys conglomerate announced share splits in over a dozen group companies. These ranged from each share being split into ten in the parent company (Hayleys) and thriving subsidiaries like Haycarb and Dipped Products while other companies like Kingsbury split a share into two.

Brokers and analysts said that the current market surge was largely driven by the Dhammika Perera controlled Hayleys and the Ishara Nanayakkara controlled LOLC groups.

Last week Hayleys announced over a dozen share splits including in its recently acquired Singer Group companies. The majority of these involved dividing each share into two though at Singer Sri Lanka each share will be split into three.

The biggest share split ever proposed is one that is pending at EB Creasy (EBC) where each share is to be split into 100. The seldom traded EBC share is quoted at the top end of the CSE sharelist. Analysts said the massive split is intended to pump liquidity into the share and make it more affordable.

“There’s a lot of retail play in the market right now with new investors who recently took some risk doing very nicely in this bull run,” a broker said.

The CSE hit rock bottom after a seven-week closure in March last year.

 

 

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Covid-19 has now spread geographically across SL

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In small numbers to an extensive region

Pandemic situation in Western Province improves

by Suresh Perera

Though there are no big Covid-19 clusters at present, the dreaded virus has spread geographically across the country due to the unrestricted movement of people, a senior medical official said.

“The transmission of the contagion in small numbers to an extensive region was inevitable in a society which remains ‘open’ with inter-provincial travel happening on a daily basis”, says Dr. Hemantha Herath, Deputy Director of Public Health Services.

He said the spillover from the Western province was expected as there was an outflow of people to other districts particularly during the festive season.

“I am not blaming anybody, but a lockdown was not viable when taking into account the economic consequences and the livelihoods of the people. We could have imposed a curfew to restrict travel during the New Year, but we have to consider the fallout of such a measure”, he noted.

It true that geographically numbers have increased within a wide area, but the numbers are small and there are no big clusters as seen at Minuwangoda and Peliyagoda, the senior medical official explained.

Asked whether the pandemic has translated into a community spread as considerable positive cases continue to emerge on a daily basis, Dr. Herath replied, “no, that has not happened. If the Covid-19 situation was beyond control, we would have made a social and community transmission declaration”.

He said the pandemic situation in the Western province has improved with a dip in positive cases. However, the spillover is evident by the jump in figures at provincial level.

“We knew there was a risk, but we had to take it as locking down the country was not the solution

For example, if a Covid-19 patient infects two persons per day, there will be 200 positive cases within 100 days and one can imagine the critical situation that will emerge if the trend is allowed to continue, Dr. Herath continued.

“We are now managing under 1,000 cases per day”, he said, while assuring that the right mechanism is in place to identify positive cases through PCR and rapid antigen screening and place them under medical treatment, isolate and quarantine first contacts of patients”, he further said.

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