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Lanka Sathosa Chairman says he was neither sacked nor was there a ‘rice scandal’



by Suresh Perera

The purported “sacking” of the Lanka Sathosa Chairman over what was described as a “scandal” in the procurement of rice captured intense media attention, but Nushad Perera, who headed the country’s biggest retail chain, dismissed the claims as “bunkum”.

“I was neither sacked as Chairman nor was there a ‘rice deal’, as claimed”, he said last week.

He said that he resigned on December 31, 2020, to take up his new appointment as Chairman of the Sri Lanka Standards Institution (SLSI) as the President wanted him to build up the national standards body to broad-base benchmarking the country’s export sector.

As a marketing professional, Perera earlier served for two decades as a member of the senior management team of Dialog Group and was also the founding CEO of Dialog TV.

He was appointed Chairman of Lanka Sathosa and the affiliated CWE (Cooperative Wholesale Establishment) by the President on January 1, 2020.


“I opted to resign as CWE Chairman on November 30 to dedicate more time to Lanka Sathosa to keep the wheels turning to ensure a steady supply of consumer essentials through the retail chain’s 416 outlets especially at a time the country is grappling with a pandemic”, Perera explained.

“We have to be fully operational to face the challenge”, he underscored.

As Chairman of the two institutions, he had to also attend board meetings every two weeks, which made it difficult to cope with the workload.

He said that he didn’t accept a remuneration as the head of the CWE. At Lanka Sathosa, he was paid Rs. 100,000 per month but largely used his private vehicle.

Asked about the Lanka Sathosa Chairman’s exit, Trade Minister Bandula Gunawardena said there was nothing amiss as the heads of the SLSI and EDB (Export Development Board) were also replaced.

“The heads of three institutions under my Ministry were changed in keeping with national priorities”, he told The Sunday Island.

Asked about allegations of irregularities in rice imports on the Lanka Sathosa Chairman’s watch, the Minister said that such claims were baseless. “There was nothing of that sort – it’s a figment of imagination”.

“The Chairman alone cannot decide on procurements”, Perera stressed.

There is a six-member procurement committee, including the Chairman, Secretary to the Trade Ministry and a treasury representative, which decides on purchases. This is followed by another three-member technical committee which evaluates the quality of the commodities to be procured, he explained.

In the case of rice, purchases are made locally by the procurement committees on the basis of 750 metric tons, which works out to one week’s requirement, Perera outlined.

Asked how a Fellow of the Chartered Institute of Marketing (FCIM), who was named ‘CIM Marketer of the Year’ in 2001 and awarded the coveted ‘Global Brand Leadership Award’ at the Asia Brand Congress in 2007, could fit into a scientific body, he said the SLSI can be better marketed as a productive tool to the private sector.

“We need to take this national certification body to the private sector in a big way as the quality of all commodities including fruits and vegetables will have to be SLSI certified for the export market”, he said.

“There’s a lot of work to be done there after I assume duties on January 1, 2021”, Perera added.

To be appointed Sathosa Chairman is akin to being asked to sit on a smoking volcano, industry officials quipped.

Whatever the dispensation, there’s bound to be tremendous pressure from various ‘interest groups’ eager to make a quick buck, they said.

Under the former UNP regime, it was like a game of musical chairs with heads rolling so often that the question jocularly asked was ‘who would be this week’s chairman?’, they recalled.

There were a few Chairmen with integrity, the officials recounted, referring to renowned marketing expert, Dr. Rohantha Athukorala, who collected his laptop, flagged down a three-wheeler and pushed off home (leaving behind his official vehicle) when asked to do what was considered unethical during Minister Rishad Bathiudeen’s time.

It’s a case of old wine in new bottles, they laughed. “Jockeys may come and go but the old horses in the stables know how the cookie crumbles”.

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CB Governor: Lanka now in a position to pay for essentials



‘Inflation will not be as high as initially expected’

Inflation will not be as high as initially expected and there are signs of economy stabilising, Central Bank Governor Dr. Nandalal Weerasinghe says.Dr. Weerasinghe said that during the past few months a number of initiatives had been made to improve the economy and they were yielding the desired results.

“During the last review, we thought the inflation would reach 70%. However, now we believe that the inflation will not be that high even with the electricity tariff hike,” he said.

Dr. Weerasinghe said that the severity of the shortage of foreign currency had lessened. The country was now in a position to import fuel, gas and medicines.

“This has become possible because of the decisions we took. Imports have decreased. Export revenue has somewhat increased. Even without short-term loans we have been able to meet our basic needs. This is a positive development,” Dr. Weerasinghe said.The CB Governor said that inflation driven by demand had lessened because the expansion of loans had been curtailed.The supply side inflation too would drop with price and foreign exchange stabilisation.

“Still the inflation is about 60% and that’s why we need to maintain the current high policy rates. Once the government adjusts the fiscal policy, tax, and presents the new budget, things will improve. I think you can also see this. We are seeing positives,” he said.

Dr. Weerasinghe also urged exporters to bring back the foreign exchange earnings, and that the Central Bank had taken steps to ensure that exporters abided by the CB regulations.

“The irregularities due to open accounts, hawala and undial are being controlled and the black market premium is dropping. The foreign exchange liquidity in the banking sector has increased,” he said.

The Governor added that negotiations with the International Monetary Fund (IMF) had made good progress. An IMF delegation was expected to visit Sri Lanka by the end of August to reach a staff-level agreement.After Sri Lanka reached a staff-level agreement with the IMF, it had to start engaging with its creditors on debt restructuring.

“Once we reach an agreement with the IMF the situation will improve further,” he added. (RK)

(See related stories in the business section)

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CID arrests Mervyn 15 years after he forcibly entered Rupavahini



By Norman Palihawadana

Former Minister Mervyn Silva was yesterday arrested by the Criminal Investigation Department (CID) for forcibly entering the Sri Lanka Rupavahini Corporation (SLRC) and attacking some employees there in 2007.On 27 Dec. 2007, Silva and his associates entered the SLRC premises and assaulted its news director for not airing a speech he had made in Matara.

SLRC employees held Silva incommunicado for hours, and the police intervened to secure his release. A few weeks later, some of the workers involved in the incident came under goon attacks.Mahinda Rajapaksa was the President at the time.

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Aeroflot affair: flights yet to resume; MP questions status of probe into detention of SU 289



ByShamindra Ferdinando

Sri Lanka hadn’t been able yet to convince Russia to resume Aeroflot flights and tourists from there to Sri Lanka suspended in the wake of the detention of SU 289 at the Bandaranaike International Airport (BIA) on the afternoon of June 02, authoritative sources said.

Sri Lanka grappling with an unprecedented foreign exchange shortage desperately needs tourists from an important destination like Russia, which earlier accounted for a sizeable share of the incoming traffic. Responding to The Island queries, sources said that relevant authorities were in the process of looking into the issue at hand.Having summoned Sri Lanka’s Ambassador to Moscow Janitha Abeywickrema Liyanage soon after the incident at the BIA, the Russian Foreign Ministry issued a stern warning over the incident.

In the wake of the Russian warning, the then government took measures to lift restrictions imposed on the aircraft that was to be detained till June 16. The detained SU 289 was allowed to leave on June 06.Former Public Security Minister Rear Admiral Sarath Weerasekera yesterday (18) told The Island that no holds barred investigation was required to ascertain the truth.

Lawmaker Weerasekera said that the government should inform the Parliament of the progress of the investigation and what steps it intended to take as well as measures already taken to mend relations with Russia.

The retired Navy Chief of Staff said that those in authority should investigate whether a court ruling issued in respect of a case filed by Ireland-based Celestial Aviation Trading Company Ltd., against Aeroflot had been manipulated by interested parties.

It transpired that no sooner High Court Judge, S. M. H. S.P. Sethunge, in the Commercial High Court of the Western Province, Attorney-at-Law Aruna de Silva accompanied a fiscal officer of the same Court to the BIA at lightning speed to deliver the ruling.

Lawyer de Silva appeared for the plaintiff with Avindra Rodrigo, PC, (litigation) of FJ & Saram, leading law firm from the colonial times. The law firm has previously declined to comment on this matter.High Court judge Sethunga is on record as having said that he didn’t order the BIA not to permit Aeroflot SU 289 to take off on the afternoon of June 02.

Attorney-at-Law Dasun Nagasena, Coordinating Secretary to Justice Minister Dr. Wijeyadasa Rajapakse, PC yesterday (18) said that the Justice Ministry recommended action against the Attorney-at-Law to the Chief Justice Jayantha Jayasuriya, PC. Nagasena said that the fiscal officer who served the Justice Ministry had been interdicted, pending further investigations. As regards the lawyer, it would be handled on the advice of the CJ, the official said. Responding to another query, the official said that the Justice Ministry hadn’t been informed yet of the progress of the investigations.

Ports, Shipping and Aviation Secretary K.D.S. Ruwanchandra yesterday said that ministry officials on Wednesday (17) discussed ways and means of resuming Aeroflot flights with relevant authorities, including the Russian embassy. Ruwanchandra said they were hopeful reaching a consensus on this matter soon. The official said so in response to The Island queries.

The Bar Association of Sri Lanka (BASL) President Saliya Pieris, PC, yesterday said that they could initiate an inquiry only on the basis of a formal complaint. He said so when The Island asked him whether the BASL initiated an inquiry into the lawyer’s conduct in this regard. The President’s Counsel said that normally the BASL wouldn’t launch an investigation into a matter inquired into by the CJ.

At the time of the BIA incident, Prof. G.L. Peiris had been the minister in charge of foreign affairs. Since the change of government, President Ranil Wickremesinghe has sworn in Ali Sabry, PC, as the new minister of foreign affairs.

Russia has pointed out that action was taken against SU 289 in spite of an assurance given by Sri Lanka in respect of regular flights to Colombo.Sri Lankan Airlines in late March suspended flights to Moscow in the wake of imposition of what the airline called operational restrictions in the wake of war between Russia and Ukraine.

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