News
Harsha accuses govt. of being secretive about debt negotiations with international commercial creditors
By Saman Indrajith
The Samagi Jana Balawegaya (SJB) is not at all satisfied with the furtive manner in which the government is conducting discussions with Sri Lanka’s commercial creditors to restructure 12 billion dollars of debt, SJB MP and Chairman of the Committee on Public Finance (COPF), Dr. Harsha de Silva said.
The SJB MP added that the country’s international commercial creditors account for a large portion of its domestic debt and they have formed a group, i.e. ‘The Ad Hoc Group of Bondholders’ that has procured the services of two powerful consulting firms.
The Group is advised by Rothschild & Co and White & Case LLP as financial and legal advisors, respectively, he said.
Sri Lanka has made some progress with bilateral creditors including China and India, he said.
“China for the first time since it started lending has agreed to accept the same conditions that the other creditors receive. This is a great victory. However, the stumbling block seems to be our dealings with the commercial creditors and I am not sure if we are doing all we can to get a speedy resolution.”
MP de Silva said that early in 2023, the Ad Hoc Group of Bondholders came up with a “Macro-Linked Bond” (MLB) as a way of restructuring the debt. MLB links payouts to the evolution of Sri Lanka’s gross domestic product. They proposed the government the issuance of 10 bonds linked with the country’s macroeconomic health that will mature between 2027 and 2036, he said.
“They have proposed a 20 percent haircut and an interest rate up to 9.5 percent to be paid in cash and in kind.” But if GDP growth is lower than the bondholders expect the interest rates will drop further. The Sri Lankan government said, in October, it was not too keen on this and I don’t blame them.”
In late 2023, White & Case LLP issued a statement on behalf of the Ad Hoc Group of Bondholders. In this statement they said they have repeatedly tried to engage with the Sri Lankan authorities and its advisors in good faith. They say no substantive engagement has taken place between Sri Lanka and its private creditors by December 2023, de Silva said.
“Now it’s mid- March and no one knows what is going on. We have achieved stability, but we have done so by drastically increasing poverty, significant job losses and the closure of small and medium enterprises. Moreover, Sri Lankan workers sacrificed a lot for the government to restructure domestic debt. So people have sacrificed greatly for stability and therefore they need to know what is going on. But the government is secretive and does not tell us anything that is happening with foreign debt restructuring.”
The SJB MP went on to say that Sri Lanka will be able to dispel the moniker of a bankrupt state when it is able to access international capital markets. For this Sri Lanka’s credit rating must improve.
“President Ranil Wickremesinghe says Sri Lanka will shed the moniker of a bankrupt state by April. I think a lot needs to be done before we reach that stage. We are at the bottom of the ratings, and we need to at least get to where the country was before the Gotabaya Rajapaksa administration.”
MP de Silva said that Sri Lanka needs to grow at double digits to escape the current stagnation and that the best way to do it is to explore how the country can benefit from the fast-growing Indian South.
“This will be the fastest growing area in the world in the coming decades. We need to see how we can link with them and benefit.”
The government has chosen not to respond to questions raised by the United Nations Human Rights Council (UNHRC) regarding the detention of retired Maj. Gen. Suresh Sallay in connection with the ongoing investigations into the 2019 Easter Sunday attacks.
The Criminal Investigation Department (CID) arrested the ex-official in late February this year. The Special Rapporteur on the promotion and protection of human rights and fundamental freedoms while countering terrorism, the Working Group on Arbitrary Detention, the Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health and the Special Rapporteur on the independence of judges and lawyers have jointly raised the issue on 20 July, 2026.
Drawing attention of President Anura Kumara Dissanayake to what they called alleged arbitrary detention of Sallay, former Director General of the State Intelligence Service (SIS) and former Director of Military Intelligence (DMI), under the Prevention of Terrorism Act (PTA), as well as allegations of torture and other cruel, inhuman or degrading treatment while in custody, resulting in the grave deterioration of his health, and imminent risks of retaliation through further torture and ill-treatment resulting in irreparable harm, should he be released from hospital and returned to custody, the UN sought the government explanation with a 60-day period.
The UN has stated: “This communication, and any response received from your Excellency’s Government, will be made public via the communications reporting website at the 60 days mark. Should your Excellency’s Government respond within 60 days, both the communication and the response, may be published before the 60 days mark. The communications and responses
will also be made available in the subsequent periodic report to be presented to the Human Rights Council.”
In the absence of the government’s response, the UN posted the letter, dated 20 July, 2026, addressed to President Dissanayake. The full letter can be accessed https://spcommreports.ohchr.org/TMResultsBase/DownLoadPublicCommunicationFile?gId=31125
News
Section of wartime KKS High Security Zone vacated to facilitate economic development in the area
The Army, last week, vacated an area, within the wartime high security zone in the Jaffna peninsula. The Defence Ministry said that an extent of 187.56 acres of land, belonging to the Cement Corporation in Kankesanthurai, Jaffna, has been released by the military. The released land, located in Grama Niladhari Division J/233, Kankesanthurai West, within the Valikamam North (Tellippalai) Divisional Secretariat Division, had been utilised by the Sri Lanka Army since the middle of 1997.
The release of the 187.56-acre extent forms part of the initiative to make State land available for the proposed investment zone in Kankesanthurai, thereby facilitating future investment and economic development in the area.
A complaint has been lodged with the Colombo Fraud Investigation Bureau against the Government Printer and the Secretary to the Ministry of Media regarding the online release of falsified documents bearing a forged Speaker’s certificate.
Attorney-at-Law Aruna Laksiri has lodged a complaint with the Colombo Fraud Investigation Bureau requesting legal action against the Government Printer of the Department of Government Printing (No. 118, Dr. Danister de Silva Mawatha, Colombo 08), Prasanna Jayaratne, and the Secretary to the Ministry of Mass Media (Asidisi Medura, 163, Kirulapone Mawatha, Polhengoda, Colombo 05), Dr. Anil Jasinghe.
The complaint alleges the commission of offences by forging and uploading falsified documents online using a forged Speaker’s certification, failure to perform statutory duties, and misappropriation of public property.
The complaint states that a copy of the English translation of the 22nd Amendment to the Constitution was downloaded and printed from the official website of the Government Printing Department (www.documents.gov.lk), which operates under the Ministry of Mass Media. On its outer cover and on page 1, the text “certified on 25th of September, 2026” is inscribed inside brackets.
The complaint pointed out that the Speaker has certified an English translation. Under Articles 23, 79, 83, and 80 of the Constitution, Parliament enacts laws and the Speaker certifies bills strictly in the Sinhala and Tamil languages; under the Constitution, therefore the Speaker cannot apply such certification to an English translation.
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Section of wartime KKS High Security Zone vacated to facilitate economic development in the area
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