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Midweek Review

Pre-and post-Aragalaya sugar tax scams and culpability of Finance Ministry

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Then Secretary to the Ministry of Finance S.R. Attygalle declared, at a hastily arranged media briefing on March 12, 2021, that the Treasury suffered revenue loss due to reduction of Special Commodity Levy (SCL) on sugar imports from Rs. 50 a kilo to 25 cents

The Supreme Court ruling delivered on Nov 14, 2023 dealt with the economic crisis and found fault with the then President Gotabaya Rajapaksa, Finance Ministers, Mahinda Rajapaksa and Basil Rajapaksa and others. But absolutely no action has been taken yet on the basis of the Supreme Court findings. Instead, Parliament continue with a Select Committee tasked with investigating causes for the financial bankruptcy. The Opposition has boycotted the Committee, headed by SLPP General Secretary and Attorney-at-Law Sagara Kariyawasam.

By Shamindra Ferdinando

Last week’s Midweek piece “Warning issued over proposed ‘Open Government Partnership’ action plan” (OGP action plan) dealt with the daunting challenge in addressing improvement of public services, prevention of bribery and corruption, proper management of public resources, ways and means of addressing basic requirement of vulnerable communities and the management of state and privately funded projects at national and provincial level.

The decision on the part of President Ranil Wickremesinghe to place the high profile project under the Additional Secretary to the President at the Presidential Secretariat Chandima Wickramasinghe underscored the importance the UNP leader attached to the initiative. Sri Lanka is in the process of preparing a third OGP action plan which is expected to be submitted to the Cabinet-of-Ministers by no less a person than President Ranil Wickremesinghe. As the National Focal point for the OGP, Chandima Wickramasinghe is spearheading the effort.

Against that background, let me discuss the sugar scams perpetrated in Oct 2019 and Nov 2023 and the continuing failure on the part of Parliament to compel the Finance Ministry to take action at least in respect of the first scam. If the Wickremesinghe-Rajapaksa government is genuinely interested in addressing bribery and corruption, it needs to act on such mega corrupt deals without further delay. Those who have been tasked with preparing the OGP action plan should examine the sugar scams as they could help them to realize the daunting challenges ahead from within the government.

Mahinda Rajapaksa served as the Finance Minister at the time of the first sugar scam, whereas the second fraud took place under incumbent President and Finance Minister Wickremesinghe’s watch.

Unless the incumbent government is prepared to tackle waste, corruption, irregularities and mismanagement in line with OGP action plan, it shouldn’t squander time and energy thinking it can again hoodwink the masses with the latest OGP project. The government should bear in mind that the first and the second OGP projects flopped.

The Yahapalana government (2015-2019) and the Gotabaya Rajapaksa administration (2019-July 2022) should be held responsible for the collapse of OGP initiatives and the declaration of bankruptcy in April 2022.

High-handed tax fraud

In spite of the Committee on Public Finance (CoPF) relentlessly pressing the Finance Ministry and the Inland Revenue Department (IRD) over the inordinate delay in recovering the losses caused by the first sugar scam, the powers that be continued to hold up the process. Obviously overthrowing President Gotabaya Rajapaksa in July 2022 hasn’t resulted in speeding up of the process.

CoPF, under the chairmanship of Dr. Harsha de Silva, censured the Finance Ministry and IRD over their pathetic failure to recover the losses in terms of the findings made by Auditor General W.P.C. Wickremaratne. Senior representatives of the Finance Ministry and IRD appeared before CoPF on Aug 16. Among those who had been present at the proceedings were SLPP MP Chandima Weerakkody (now aligned with the main Opposition Samagi Jana Balawegaya), SLPP MP Duminda Dissanayake (SLFPer elected on the SLPP ticket), SLPP MP U.K. Sumith Udukumbura and SLPP MP Madura Vithanage.

CoPF flayed the Finance Ministry for turning a blind eye to sordid operations carried out by sugar importers who thrived at the expense of hapless consumers. The SJB should demand an explanation from President Wickremesinghe, as well as State Finance Ministers Ranjith Siyambalapitiya and Shehan Semasinghe, both elected on the SLPP, and members of the government parliamentary group at the time Gotabaya Rajapaksa’s government perpetrated the first sugar scam.

Then Finance Minister Mahinda Rajapaksa issued a gazette, dated Oct 13, 2020, in respect of the import of white sugar. The twice former President brought down the import tax (Special Commodity Levy/SCL) from Rs.50 to 25 cents (per kg).

It would be pertinent to mention that the then Trade Minister Bandula Gunawardena is on record as having said that he was never consulted on the Oct 13, 2020 gazette. S.R. Attygalle served as Secretary to the Treasury, whereas intervention made by then Presidential Secretary Dr. P.B. Jayasundera, to facilitate the scam, is in the public domain.

Anura Priyadarshana Yapa, MP, in his capacity as Chairman, CoPF, in early 2021, declared that the consumers hadn’t benefited at all from the sharp reduction of the SCL. The Gotabaya Rajapaksa government ignored the CoPF chief’s assertion. The government absolutely paid no attention to a special report issued by the National Audit Office regarding the sugar tax scam. The report asked the government to recover the losses from importers who made massive profits, thanks to the massive slashing of the sugar import tax.

According to the special audit, within four months after the reduction of the tax (14th October 2020 to 8th February 2021) the cash-strapped government was deprived of tax revenue to the tune of a whopping Rs. 16.763 bn. During the same period some of the stock had also been dumped on Sathosa above the cleared price and that resulted in a loss of Rs. 102 mn to the state enterprise.

The audit revealed that one of the major sugar importers Pyramid Wilmar recorded a colossal profit of some 1,222%.

The Human Rights Commission, on April 18, 2022, amidst growing unrest, urged Gotabaya Rajapaksa’s government to immediately implement the Auditor General’s recommendation.

The then Commission’s chairperson and retired Supreme Court Justice Rohini Marasinghe stressed in a statement: “… the arbitrary and unreasonable use of state power affects the economic, social and cultural rights of citizens.” The government simply ignored that warning, too.

In addition to the Finance Ministry and the IRD, lawmaker Patali Champika Ranawaka, in his capacity as Chairman of the House Ways and Means Committee, has strongly questioned the Attorney General’s Department’s response to the sugar scams. However, MP Ranawaka’s criticism should be examined, also taking into consideration the second sugar scam perpetrated by the incumbent government in the first week of last November.

Dr. de Silva, at the conclusion of the January 16 proceedings, had asked the IRD to submit a report as to why the monies owed by major sugar importers couldn’t be collected.

The failure on the part of responsible authorities to reach a consensus on a specific plan to deal with tax frauds remains a major problem.

Let me stress that the real issue is the circumstances under which the Finance Ministry issued the relevant gazette notification, dated Oct 13, 2020, pertaining to the reduction of the sugar tax. The Auditor General’s report conveniently failed to inquire into that aspect. If the AG quite rightly asserted that sugar importers benefited from the issuance of that particular gazette, it would be the responsibility of the government to investigate the possible collusion between the importers and the Cabinet-of-Ministers, who obviously leaked that information to them in advance and thereby helped them to import vast quantities if sugar at 25 cents a kilo tax and then made a killing when the tax was raised overnight to Rs 50 per kg.

Manusha on second sugar scam

The Wickremesinghe-Rajapaksa government made a desperate bid to dismiss accusations regarding the second sugar fraud that captured media attention in the run-up to the presentation of Budget 2024.

In the second scam, sugar consignments had been cleared just before the government increased the tax from 25 cents per kg of sugar to Rs 50 from midnight Nov 1.

President Ranil Wickremesinghe’s Director General on Trade unions Saman Ratnapriya during his regular media briefing at Lake House denied what he called the Opposition’s unsubstantiated claim that sugar importers had benefited from the latest increase in sugar tax.

The writer who had been there to cover the media briefing and sought an explanation from former UNP National List MP Ratnapriya regarding Labour and Foreign Employment Minister Manusha Nanayakkara’s accusation that sugar importers benefited from what he called inside information.

SJB Galle District MP Nanayakkara who switched allegiance to the then Premier Ranil Wickremesinghe and reiterated the commitment to President Wickremesinghe and found fault with the Customs.

Minister Nanayakkara declared that he wouldn’t remain silent regarding the latest scam as he raised his voice against the one perpetrated during the previous administration.

However, the lawmaker hadn’t commented on the second scam since his initial observation issued by way of a statement released by the Labour and Foreign Employment Ministry on Nov 07, 2023. Claiming that only Customs had been aware of the impending revision of tax, lawmaker Nanayakkara called for an investigation to ascertain how sugar importers received that information even before the Cabinet-of-Ministers was made aware of the move.

Minister Nanayakkara shouldn’t forget that the issuance of the relevant gazette notification is the responsibility of the Finance Ministry and certainly not the Customs which comes under the former.

CoPF and Auditor General should also inquire into the second scam. Authorities haven’t inquired into lawmaker Nanayakkara’s claim made in his capacity as a member of the current Cabinet. In his statement, MP Nanayakkara cleared the Cabinet, but the Cabinet-of-Ministers cannot absolve itself of the responsibility for leaking of such sensitive information at a time the country is yet struggling to overcome a state of bankruptcy.

The most obvious conclusion we can reach is that the latest scam was allowed in order to build a war chest for the present government to fight the next election. And the previous one was to pay off someone who financed the SLPP’s last polls campaign. All these happen as international lenders, like the IMF, blow lots of hot air about how keen they are in fighting corruption, while allowing such daylight robberies to continue which only results in the poor and even middle class Sri Lankans going without meals! What a way to tighten our belts IMF?

The team tasked with preparing the OGP action plan under any circumstances cannot be blind to continuing corruption at every level. Those tasked with the job involving the Presidential Secretariat, Transparency International Sri Lanka and Sarvodaya have to consider the current economic status, especially against the backdrop of the historic and unprecedented Supreme Court ruling in respect of the economic ruination.

Preparation of a report acceptable to the OGP community would pose quite a challenge as the country is down on its knees before the International Monetary Fund (IMF) for the 17th occasion.

The current crisis could have been averted if the Gotabaya Rajapaksa government sought the IMF intervention earlier, as experts have claimed. But, ironically, instead, the then government, soon after the 2019 presidential election, declared an unparalleled tax cut that deprived the Treasury of a staggering Rs 600 bn in much needed revenue, on top of the body blow the country received, especially to its lucrative tourism industry from the devastating Easter Sunday terror attacks, which even targeted important tourist hotels. To make matters worse, we were struck by the COVID pandemic that also paralysed much of the world, never before experienced in our living memory.

The Supreme Court ruling that was delivered on Nov 14, 2023 dealt with the issue and found fault with the then President Gotabaya Rajapaksa, Finance Ministers, Mahinda Rajapaksa and Basil Rajapaksa and others. But absolutely no action has been taken yet on the basis of the Supreme Court findings. Instead, Parliament continue with a Select Committee tasked with investigating causes for the financial bankruptcy. The Opposition has boycotted the Committee, headed by SLPP General Secretary and Attorney-at-Law Sagara Kariyawasam.

Former COPE Chairman Prof. Charitha Herath who promised in last July to release a comprehensive report on the economic crisis within three months is yet to do so (https://island.lk/probe-into-countrys-bankruptcy-ex-cope-chief-going-ahead-with-own-inquiry/). Whatever the outcome of the parliamentary probe, conducted by the SLPP and dissident SLPPer’s report, the OGP should go by the Supreme Court ruling. The possibility of attempts at different versions to suit political agendas in an election year cannot be ruled out.

A govt. in dilemma

The post-Supreme Court ruling scenario cannot be discussed without taking into consideration the continuing alliance between President Wickremesinghe and the SLPP. The latest to declare his support for the incumbent President is Chief Government Whip Prasanna Ranatunga, the SLPP’s Gampaha District strongman.

With an influential section of the SLPP openly backing Wickremesinghe’s candidature at the next presidential election, scheduled for later this year, the UNP leader seemed to have secured the backing of a sizable group of government group members. Of course of the SLPP MPs, Gampaha District lawmaker Nimal Lanza is the first to throw his weight behind the UNP leader at an early stage of the Wickremesinghe presidency.

OGP Research Officer Christina Socci, in an article titled ‘Reform Space to Watch: Strengthening Governance in Sri Lanka,’ posted on Dec 12, 2023, dealt with the situation and developments here. Socci, formerly of the National Democratic Institute (NDI) and the UN Project Office on Governance, emphasized the responsibility on the part of the government to adopt and implement new policies to promote integrity, eliminate corruption and corruption vulnerabilities. Socci quite rightly declared that in the wake of President Gotabaya Rajapaksa’s ouster (she called it people’s uprising) the executive, the legislature and judiciary were coming under increasing pressure to adopt far reaching reforms at all levels (https://www.opengovpartnership.org/stories/reforms-to-watch-2023-strengthening-governance-in-sri-lanka/)

The crux of the matter is can Sri Lanka restore public faith in a system brazenly abused, exploited and used by political parties currently in Parliament. In fact, the Parliament has been accused of enacting several laws which were actually detrimental to the country. There cannot be a better example than the enactment of the Foreign Exchange Act No 12 of 2017 by the Yahapalana administration that severely weakened regulatory powers. That law was brought in place of the time-tested Foreign Exchange Control Act No 24 of 1953 (https://island.lk/abolition-of-time-tested-exchange-control-act-in-terms-of-rti-act-house-releases- names-of-mps-who-voted-for-new-law/)

The then UNP parliamentary group voted for that destructive law. Some of those who voted for that law now function as members of the SJB. Regardless of the breaking up of the UNP ahead of the 2020 general election in 2020 those who voted for Foreign Exchange Act No 12 of 2017, too, should be held accountable for the current crisis.

All political parties need to review their strategies and policies. Perhaps the OGP action plan can sort of guide political parties.

While appreciating the OGP project, it must be pointed out that even after the declaration of bankruptcy political parties represented in Parliament are yet to agree on a tangible action plan to curb rampant waste, corruption, irregularities and mismanagement. The allegations made against President Gotabaya Rajapaksa’s Cabinet in a fundamental rights petition filed by three of his ministers, Vasudeva Nanayakkara, Wimal Weerawansa and Udaya Gammanpila in respect of the controversial Yugadanavi agreement signed in Sept 2021 should have promoted genuine examination of the immoral system in place. Instead, President Gotabaya Rajapaksa sacked Weerawansa and Gammanpila in early March 2022.

Three weeks later public protests, backed by the US, erupted and by July 2022 the man who handsomely won the presidential poll was out and Wickremesinghe, discarded at the parliamentary polls, took over the presidency. The rest is history. But, the UNP leader, regardless of the criticism of the way he secured the executive office, brought the situation under control swiftly.

The ongoing controversy over Sri Lanka Cricket (SLC), based on damning disclosures made by the National Audit Office (NAO) in its report on Sri Lanka’s tour of Australia for the T20 World Cup (Oct. 09-Nov.13), in 2022. The Wickremesinghe-Rajapaksa government’s reaction to that report revealed the pathetic state of affairs – instead of taking action, the political leadership unceremoniously sacked Sports Minister Roshan Ranasinghe and brought the Ministry under Harin Fernando, MP. Having entered Parliament on the SJB National List, Fernando served as Tourism and Lands Minister when he was also sworn in as Sports and Youth Affairs Minister on Nov 27, 2023 by President Wickremesinghe.

Opposition accusations directed at the Chairman of Committee on Public Enterprises (COPE) Prof. Ranjith Bandara (SLPP National List) as regards his alleged attempts to shield the SLC underscored the responsibility on the part of the government and Parliament to restore public confidence in the parliamentary system. Sri Lanka is in such a precarious state, political parties represented in Parliament are no longer in a position to hoodwink the public. President Gotabaya Rajapaksa’s fate proved beyond doubt that cosmetic political, economic and social reforms won’t end developing instability caused by the executive, legislature and the judiciary to a certain extent.



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Midweek Review

July 09: An inexcusable overall security failure and exceptional contingency plan

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A massive throng of people inside the President's House after mobs forced Gotabaya Rajapaksa to flee on 09 July, 2022

Ulugetenne

The Sri Lanka Navy, on 04 June, commissioned SLNS Samudravijaya, formerly United States Coast Guard Cutter Decisive. It is the fourth mothballed US Coast Guard cutter transferred to the SLN through the US Excess Defence Articles Programme. President Anura Kumara Dissanayake attended the ceremony at the Colombo Port. The US Embassy in Colombo, in a statement issued on the same day, quoted Defence Attaché Lieutenant Colonel Matthew House as having said: “Few partners have demonstrated the commitment to maintaining and operating these vessels as successfully as the Sri Lanka Navy. The outstanding condition and operational performance of SLNS Samudura, SLNS Gajabahu, and SLNS Vijayabahu are a testament to the professionalism and technical expertise of Sri Lankan sailors. Their stewardship of these vessels helped build the confidence that made this fourth transfer possible.” The first of the four vessels SLNS Samudura was commissioned on 19 February, 2005, during Chandrika Bandaranaike Kumaratunga’s tenure as the President. Milinda Moragoda, Economic Reforms and Science and Technology Minister of the previous UNP-led UNF government, played a significant role in acquiring that vessel. SLNS Samudura boosted SLN and participated in numerous operations, including the high profile hunt for LTTE floating warehouses, during the Eelam War IV. But, the US refrained from transferring any more big ships during the war though on the then Navy Commander Vice Admiral Wsantha Karannagoda’s request to provide intelligence and Washington obliging, made the successful hunt for LTTE floating arsenals in the last stages of the war possible. The transfer of the second vessel took place 19 years after the end of the war. Ex USCG Sherman was commissioned 06 June, 2019, as SLNS Gajabahu (P626). The third vessel was transferred to the Sri Lanka Navy on October 26, 2021, as the country was heading towards an unprecedented economic crisis. That vessel was commissioned as SLNS Vijayabahu at the Colombo Port with the participation of President Ranil Wickramasinghe and US Ambassador to Sri Lanka Julie Chung on November 20, 2022. Ironically SLNS Gajabahu, one of the ex-US vessels prominently figured in the contingency plan to save President Gotabaya Rajapaksa, but whose downfall was engineered by the US.

By Shamindra Ferdinando

The moment President Gotabaya Rajapaksa decided to take up residence at the President’s House (Janadhipathi Mandiraya), Fort, in the first week of April, 2022, the Navy had no option but to prepare a thorough contingency plan, in case the regime change project posed a realistic threat to the life of the President.

The President, in consultation with senior military officers, made his move within 48 hours after violence erupted outside his private residence at Pangiriwatte, Mirihana, on the night of 31 March, 2022. That decision seemed realistic and sensible at that time.

But, in the wake of the disastrous overall armed forces response to the coordinated violence unleashed by the regime change project on 09 May, 2022, in the aftermath of the Temple Trees ordered attack on Galle Face protesters, the top brass must have recognised the urgent need for total overhauling of security strategy. But, unfortunately, that hadn’t been the case. With violent crowds overwhelming the armed forces, deployed to block them, rapidly approaching the President’s House, those who had been at the makeshift Operations Room there were stunned.

In hindsight, the President’s decision to remain at the President’s House, regardless of the near failure on the part of the armed forces to repulse the raid on Temple Trees, on 09 May, seemed unwise. The rescue operation could have gone wrong and the war-winning President Mahinda Rajapaksa could have ended up in the hands of an angry mob.

Perhaps, the conspirators envisaged the President’s move, from Pangiriwatte to the President’s House, situated walking distance away from the Galle Face protest site, where they could draw additional strength.

The failure on the part of the government to take tangible measures, in the wake of the President’s House becoming the sole target on that fateful day, is a contentious issue that needs to be properly investigated. Don’t forget that the court case filed over the 09 May attacks on the residences and properties belonging to SLPP politicians, and some supporters ,was later withdrawn. The Wickremesinghe-Rajapaksa government never investigated the 09 May incidents.

Exactly two months after the mobs almost succeeded in breaking through defences at Temple Trees, on the night of 09 May/10, where Prime Minister Mahinda Rajapaksa was residing, they mounted the assault on the President’s House.

In the wake of the 09 May mayhem, President Gotabaya Rajapaksa named Lt. Gen. Vikum Liyanage as the Commander of the Army. He succeeded General Shavendra Silva who served as the CDS but was out of the country when all-out mayhem was unleashed by the Aragalaya mobs on 09 July, 2022, to oust the sitting government.

In spite of a direct and growing threat to the President’s House, on 09 July, 2022, the President felt confident in meeting the challenge. The President issued a directive to the Secretary, Ministry of Defence, General (retd.) Kamal Gunaratne, to shift the Operations Room from the Defence Force Headquarters, at Akuregoda, to the President’s House. Having shifted the Operations Room on 08 July, 2022, to the President’s House, as directed by the President, the top brass prepared to face the challenge.

Maj. General K.B. Egodawela, who served as an Additional Secretary (Administration) to the President, from the day the President moved to the President’s House, till he vacated on 09 July, 2022, in his memoirs ‘Aragalaya: Adarayen Prachandathwayata’ (From Love to Violence) revealed that though the top brass opposed the shifting of the Operations Room they carried out the directive. While the President felt that the top brass could collectively work at the President’s House to bring the situation under control, Gen Gunaratne proposed that the President should move to Akuregoda Defence Forces Headquarters, according to Egodawela. In fact, Gunaratne, who had been with Gotabaya Rajapaksa from the very beginning of the sinister campaign, strongly opposed the President’s decision to remain there.

Obviously, the President’s House pathetically failed to ascertain the scale of the protest and the rapidity with which protesters overwhelmed troops deployed outside the President’s House stunned the top brass. Had they swiftly reached consensus on Gen. Gunaratne’s suggestion, perhaps the 09 July regime change operation could have been thwarted. The armed forces could have resorted to tougher measures to prevent a march on Akuregoda Defence Forces Headquarters had the President agreed to move there.

Within two hours after the protest, targeting the President’s House began, video footage provided by drones indicated that troops couldn’t hold the rampaging mobs any longer. According to Egodawela, the top brass had been prepared to remove the President, even without his consent, by landing a helicopter in the Colombo harbor or by ship. Finally, they resorted to the second option. As the President and First Lady Ayoma got into a vehicle and took the rear exit into the adjoining former Navy Headquarters, mobs entered the President’s House. Another vehicle carrying several other persons followed.

The then Navy Commander Vice Admiral Nishantha Ulugetenne who had been with the President at the President’s House got into the vehicle carrying the President. Had they stayed at the President’s House for 10 more minutes, the consequences could have been devastating. https://island.lk/gotabayas-escape-from-aragalaya-mob-in-rti-spotlight/

Egodawela, who had been with the President from the very beginning of the presidential term, alleged that the raiders planned to kill the President and several others and display their bodies. The author quoted an unidentified intelligence officer as having told him that the raiders wanted to display the bodies the way LTTE leader Velupillai Prabhakaran’s body was shown.

Perhaps shifting the Operations Room from Akuregoda Defence Force Headquarters to the President’s House had been a risky move that, in a way, facilitated the regime change operation. The rationale in bringing those who had been tasked with countering the impending threat to one place (President’s House) to be with the target (Gotabaya Rajapaksa) seems unbelievably a dicey move. The President had been influenced by what he described as inordinate and unforgivable delay on the part of the Akuregoda Operations Room to carry out timely evacuation of Prime Minister Mahinda Rajapaksa on the night of 09 May from Temple Trees. Most probably, the President wanted to oversee the 09 July counter operation personally. But, in hindsight, the decision to shift the Operations Room from Akuregoda to the President’s House obviously hadn’t been a clever move.

SLN preparations

When mobs threatened to overwhelm the President’s security at Pangiriwattta, on 31 March, additional police and STF contingents were brought in. They were followed by the Navy and Air Force. The Army arrived at the scene, subsequently.

As pointed out by the President himself, the situation at Temple Trees, on 09 May, had been far worse and the combined police and armed forces response revealed that they hadn’t taken precautionary/counter measures, even after the Pangiriwatta fiasco.

At the time of the incidents, the overall Temple Trees security deployment included about 60 elite Special Boat Squadron (SBS) personnel deployed within the premises and were supplemented by seven SLN platoons. The Army also moved in to strengthen Temple Trees defences but the mobs pressed on till troops fired blank ammunition.

The top brass, directing counter measures from Akuregoda Defence Force Headquarters, had to act swiftly and decisively to evacuate those at the Temple Trees or face the consequences. As there hadn’t been any other alternative place of living proposed, Prime Minister Mahinda Rajapaksa, wife Shiranthi and their eldest son Namal were escorted to nearby former Air Force Headquarters and from there flown to the Trincomalee Navy base. VA Ulugetenne, over the phone, issued instructions to the relevant officer in Trincomalee to make arrangements as two helicopters carrying the group took off from the helipad on the top of the former Air Force Headquarters. The helicopters departed around 04 in the morning.

They had stayed at Trincomalee Navy House for about a week and, as requested by the Navy, paid for their stay because by then Mahinda Rajapaksa had resigned. Perhaps, they could have taken refuge at the Panagoda Army cantonment or at Saliyapura, home to the Gajaba Regiment, but, at the end, sought the protection at the Trincomalee Navy base.

Ironically, President Gotabaya Rajapaksa, too, had to take refuge at the Trincomalee Navy base, exactly two months later. Ever since the President moved into the President’s House, Fort, the Navy had been on their toes to meet any eventuality. The daunting task of arranging evacuation by sea fell on the shoulders of VA Ulugetenne, who, meticulously, planned the operation with his staff.

Having informed the President of the contingency plans, VA Ulugetenne stationed two Advanced Offshore Patrol Vessels (AOPVs), namely SLNS Sindurala and SLNS Gajabahu and four Fast Attack Craft (FACs), at the Colombo Port. It would be pertinent to mention that SLNS Sindurala, built at the Goa shipyard, in terms of an agreement signed at the tail end of the Mahinda Rajapaksa government, was adjudged the best vessel in the SLN fleet in 2022.

Additional SBS personnel and snipers, too, had been brought in to Colombo though none of them knew exactly what their task would be. The OPV and FAC crews most probably felt that they were awaiting orders for a major anti-drug operation in the high seas.

As the decision was made to evacuate the President and the First Lady, the Chief alerted the vessels and quickly deployed tugboats to pull SLNS Sindurala and, shortly thereafter, SLNS Gajabahu, formerly of the US Coast Guard, carrying the President and the First Lady. By the time the two AOPVs moved in different directions, on the instructions of VA Ulugetenne, the hand phones of SLNS Gajabahu crew were collected to prevent them from revealing what was happening. Along with the AOPVs, two pairs of FACs had moved out to sea. (https://island.lk/ranil-reveals-bid-to-get-rid-of-him-while-gr-was-fleeing-to-trinco-on-board-slns-gajabahu/)

Nearly 12-hour journey to Trinco

The SLNS Gajabahu, formerly of the US Coast Guard, had a crew consisting of over 100 officers and men. Someone, most probably a port employee, posted a short clip of some unidentified persons taking large travelling bags into the ship but the President, First Lady and VA Ulugetenne going in were never captured on a camera.

As the vessel began its journey towards Trincomalee, it remained approximately 12 nautical miles from land and the President received many calls, some of which weren’t answered. VA Ulugetenne, too, received quite a number of calls. Those familiar with the developments at that time said that some felt that SLNS Gajabahu should move out of Sri Lankan waters. There had been suggestions that the destination should be the Maldives, India or Singapore. Regardless of such suggestions, SLNS Gajabahu proceeded towards Trincomalee where the Navy made necessary arrangements to host them.

Captain Marlon Perera, who still serves the Navy, had been the Commanding Officer of the vessel. Perera now holds the Commodore rank.

During the journey precautions were taken to ensure the safety and security of the President and the First Lady. Although the crew hadn’t been aware that they would be entrusted with such a sensitive task at a time the country was in crossroads against the backdrop of an economic collapse and sovereign default, there were fears of the crew being affected by propaganda in support of regime change operation.

The attempt made by sailor Wijemuni Vijitha Rohana de Silva to cause harm to Indian Prime Minister Rajiv Gandhi, way back in July, 1987, underscored the necessity to take precautions during the Colombo-Trincomalee journey as the possibility of anti-Gotabaya campaign having an impact on at least some members of the ship crew couldn’t be ruled out.

On July 30, 1987, during a guard of honor in Colombo, the 21-year-old naval rating struck Gandhi on the shoulder and back with the butt of his rifle. Gandhi narrowly avoided the full impact of the blow by evasive ducking.

On the invitation of VA Ulugetenne, Gotabaya Rajapaksa attended all the formalities in respect of a visit undertaken by the President to the Trincomalee Navy base. The President participated in those formalities knowing that he couldn’t attend the commissioning parade that was scheduled to be held on 15 July, 2022. The Navy was not in a position to put off the commissioning parade hence the decision to invite Defence Secretary Gunaratne as the Chief Guest.

Ulugetenne retired from active naval service on 18 December, 2022, following a distinguished career, spanning over 37 years. He received the appointment as the 24th Commander of the Navy in July, 2020, just a couple of months after Gotabaya Rajapaksa’s election as the President.

Wickremesinghe, in his capacity as Gotabaya Rajapaksa’s successor, appointed Ulugetenne as Sri Lanka’s Ambassador to Cuba. The appointment was made in late 2023 and the retired Navy Chief presented his credentials to Cuban President Miguel Díaz-Canel on 13 February, 2024 (https://island.lk/from-fonseka-convictions-to-arrest-of-ulugetenne/)

However, within weeks after the last presidential election held in late November, 2024, the NPP government recalled over a dozen top envoys appointed by the previous administration. Admiral Ulugetenne was among them. The government deprived a decorated officer, who had served the country for nearly four decades, from completing his term in Havana. Within months after his return, he became the target of a murder investigation.

Then out of the blue the retired Navy Chief became the focus of a murder investigation, that, too, post-war. The Criminal Investigation Department (CID) arrested him on 28 July, 2025, over the disappearance of a person reported in July, 2020.

Kurunegala High Court Judge Tikiri Jayatilleke, on 14 October, 2025, granted him bail. Jayatilleke declared that the CID acted in an illegal manner in respect of the former Navy Commander. His counsel Kalinga Indatissa, PC, alleged in court that his client had been apprehended only on the basis of an ex-LTTE cadre’s allegation in the absence of any evidence

The next hearing is scheduled for 08 July, 2026. Ulugetenne was held at the Kegalle Prison for four days and then transferred to the Dumbara (Pallekale) Prison. Altogether, he was in prison for 80 days, like a common criminal, despite him being a former Navy Commander with an unblemished career record.

Wartime Chief of Naval Intelligence, Rear Admiral (retd) Sarath Mohotti, who had been also arrested in connection with the same investigation, was also granted bail, a few weeks later.

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Midweek Review

India should convene a regional El Niño preparedness dialogue in Delhi

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El Niño events have historically been associated with weaker monsoons in South Asia, erratic rainfall patterns, and increased risks of droughts and floods.

The coming months could bring South Asia and the wider Indian Ocean region a dangerous mix of climate shocks, economic strain, and geopolitical instability. At the centre of this looming challenge is the anticipated El Niño event, which is likely to disrupt monsoon patterns, intensify weather extremes, and place additional pressure on already fragile food, water, and energy systems.

But El Niño will not arrive in isolation. It will intersect with continuing global disruptions—from the war in Ukraine to instability in the Middle East—each of which continues to reverberate through energy markets, food supply chains, and shipping routes. The combined effect is likely to be cumulative, not linear.

This is, therefore, a moment that calls for anticipatory regional coordination rather than fragmented national responses.

A record of regional first response

There is already a clear precedent for such coordination in the region.During the COVID-19 pandemic, India emerged as a key first responder, supplying vaccines, medicines, and logistical support across the neighbourhood under its “Neighbourhood First” policy. This helped establish a practical framework for regional cooperation in times of systemic stress.

More recently, India played a similar role during the economic crisis in Sri Lanka, providing critical financial assistance, fuel, and essential supplies at a moment of acute vulnerability. India has also been among the first responders during major climate-related disasters, including cyclone events such as Cyclone Ditwa, delivering rapid humanitarian assistance.

These are not isolated gestures. They reflect an emerging pattern in which India increasingly functions as a stabilising force in the wider region.

This trajectory is reflected in India’s evolving regional frameworks—from Neighbourhood First, to SAGAR (Security and Growth for All in the Region), and now the broader MAHASAGAR vision, which signals an expanded maritime and regional engagement architecture.

Why El Niño is different this time

El Niño events have historically been associated with weaker monsoons in South Asia, erratic rainfall patterns, and increased risks of droughts and floods. In a region where agriculture remains highly climate-sensitive, even modest deviations can translate into inflation, rural distress, and fiscal pressure.

This year, however, the risks are compounded by global fragilities:

* Persistent food and fertilizer price volatility

* Elevated energy costs linked to geopolitical tensions

* Supply chain disruptions in key commodities

* High debt burdens in several neighbouring economies

Together, these factors reduce the resilience of national systems and increase the risk of cascading shocks across borders.It is also important to recognise that social instability in some fragile countries in the region should be kept in mind, as climate shocks and economic pressures can quickly reinforce each other and create wider humanitarian and political consequences.

The case for a Delhi-based regional initiative

Against this backdrop, there is a strong case for India to convene a regional El Niño preparedness dialogue in Delhi, bringing together neighbouring countries, key development partners, and multilateral institutions.

This should not be limited to South Asia alone. The impacts of El Niño extend across the wider Indo-Pacific and Indian Ocean region. Participation could include:

* Neighbouring states in South and Southeast Asia

* The United Nations system

* The World Bank and Asian Development Bank

* Key bilateral partners such as Japan and others active in regional resilience

Given its geographic position, institutional capacity, and experience as a first responder, it is both natural and appropriate for India to chair such an initiative.

What the initiative should focus on

The objective should be practical coordination rather than declaratory statements. Three areas stand out:

1. Shared forecasting and early warning systems

Strengthening real-time exchange of climate data, monsoon projections, and sectoral risk mapping, particularly for agriculture, water, and fisheries.

2. Contingency planning for essential supplies

Coordinating regional approaches to food reserves, fertilizer availability, and energy supply buffers during climatic disruptions.

3. Disaster response and financing coordination

Improving interoperability among disaster management systems, and exploring rapid-response financing through multilateral development banks for climate-related shocks.

From Neighbourhood First to MAHASAGAR

India’s regional doctrine has steadily evolved—from Neighbourhood First to SAGAR, and now MAHASAGAR—reflecting a broader conception of responsibility in the Indian Ocean region.Each stage has expanded the scope of engagement: from immediate neighbourhood assistance, to maritime cooperation and growth, to a wider vision of regional interconnectedness.

A structured El Niño preparedness initiative would be a natural continuation of this trajectory, embedding climate resilience into the region’s evolving strategic architecture.

Climate as regional security

The distinction between climate events and security outcomes is increasingly blurred. A failed monsoon in one country can trigger food inflation in another; a cyclone can disrupt trade routes; droughts can accelerate migration pressures and fiscal instability.

El Niño should therefore be seen not only as a meteorological phenomenon but as a systemic stress test for regional resilience.

India is already widely seen in the region as a first responder in times of crisis. The experiences of COVID-19, the Sri Lankan economic emergency, and climate-related disasters have reinforced this role in practical terms.

The next step is to move from reactive response to anticipatory coordination.

A Delhi-based regional El Niño preparedness meeting—anchored by India and supported by multilateral institutions and key bilateral partners—would be a timely and pragmatic initiative. In an era of compounding global risks, regional cooperation is no longer optional; it is essential.

(Milinda Moragoda is the Founder of the Pathfinder Foundation. Can be contacted via email@milinda.org, courtesy wionews.com.

by Milinda Moragoda

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Midweek Review

Beyond Harsha’s IMF “Revelations”

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Harsha

“A demagogue is one who preaches doctrines he knows to be untrue to men he knows to be idiots.” — H.L. Mencken

Summary

During a recent television appearance (https://www.youtube.com/watch?v=s0QWfenCFlk) , opposition MP and Committee on Public Finance (COPF) Chair Dr. Harsha de Silva dramatically brandished the latest IMF Letter of Intent (LoI, 13 May 2026), pointing to the signatures of President Anura Kumara Dissanayake and Central Bank Governor Dr. Nandalal Weerasinghe as proof of a “secret” alignment with austerity and cost-reflective utility pricing. However, for serious students of Sri Lankan macroeconomics, this “revelation” contained no new information. The legal, structural, and institutional mandate for cost-reflective pricing was codified long before the current administration took office—embedded in the IMF Extended Fund Facility (EFF) of 2023, the 2023 IMF Governance Diagnostic, and the Economic Transformation Act of 2024. This article argues that veteran economists in parliament must move beyond theatrical “gotcha” moments designed for political popularity and instead fulfill their true duty: educating the public on the non-negotiable continuity of structural adjustment programmess.

Anatomy of a Non-Revelation

The recent spectacle of Dr. Harsha de Silva presenting the IMF Letter of Intent on live television was framed as a grand exposure of the current administration’s hidden fiscal policy. With theatrical emphasis, Dr. de Silva pointed to the signatures of President Anura Kumara Dissanayake (AKD) and the Central Bank Governor, declaring that the government had bound the public to the bitter pill of cost-reflective electricity and fuel pricing.

Yet, to anyone who understands the mechanics of central banking and sovereign debt restructuring, this performance revealed nothing that was not already part of (i) the public, (ii) legal, and (iii) institutional reality. A Letter of Intent is a standard operational requirement of the IMF review process; it is not a newly minted policy conceived in secret. By treating a routine administrative continuity as a shocking disclosure, Dr. de Silva engaged in political showmanship rather than economic education.

Legacy of Cost-Reflective Pricing

The narrative that cost-reflective utility pricing is a novel concession by the AKD administration is factually incorrect. The institutional architecture to eliminate non-commercial losses within the Ceylon Electricity Board (CEB) and Ceylon Petroleum Corporation (CPC) was firmly established under the previous administration of Ranil Wickremesinghe.

The structural benchmarks were explicitly laid out in (i) the March 2023 IMF EFF Agreement and (ii) re-emphasized in the September 2023 IMF Governance Diagnostic Report. This framework was further consolidated by the legislature through (i) the Economic Transformation Act of 2024 and (ii) the new Sri Lanka Electricity Act. When the current administration assumed office, the fiscal tracks had already been laid. President AKD is merely operating the machinery of state within the legal and economic boundaries inherited from his predecessor Ranil Wickremesinghe to prevent a secondary default.

The Myth of the Solitary Saviour

There is a troubling tendency among Sri Lanka’s technocratic elite to engage in a saviour complex—positioning themselves on television screens as the singular authorities capable of managing public finance or navigating international waters. Dr. de Silva’s presentation was less about unveiling unknown data and more about projecting an image of unrivaled smartness in public finance.

When veteran economists resort to these manoeuvers, they diminish their own professional standing. Sri Lanka’s economic recovery does not hinge on the brilliant insights of a single individual or party; it depends on (i) institutional discipline, (ii) data-driven planning, and (iii) structural continuity. Pretending that routine compliance documents are exclusive intelligence updates serves only to feed personal political popularity at the expense of public intellectual growth.

Real Politics behind the Screen

Why, then, did Dr. de Silva choose to make a mountain out of an administrative molehill? The answer lies in pure political strategy. The National People’s Power (NPP) platform ascended to governance on strong anti-austerity rhetoric, promising relief from the heavy tax and tariff burdens imposed by the previous regime.

By holding up the signed LoI, Dr. de Silva sought a political checkmate. His objective was to expose the contradiction between the NPP’s populist election promises and its executive actions. While highlighting this policy convergence is fair game in partisan politics, framing it as a “new discovery” misleads the electorate into believing that the IMF programme is an optional, arbitrarily signed document rather than a legally binding national framework that leaves any sitting President with zero alternative manoeuvers.

True Mandate of Parliament’s Financial Oversight

During the broadcast, the fundamental boundary of the Committee on Public Finance (COPF) was brought into question. Dr. de Silva correctly noted that COPF does not formulate state policy—that remains the strict prerogative of the Executive and its chosen advisors. COPF’s true mandate is oversight: ensuring transparency, accountability, and the efficient monitoring of state revenues and expenditures.

If the head of our public finance oversight body wishes to protect the national interest, that energy should be (ii) directed toward evaluating the actual performance scorecards of state institutions, (ii) tracking structural benchmarks, and (iii) monitoring the real-time efficiency of economic programs. Using the platform of technical oversight to score quick points on a talk show blurs the vital line between a state auditor and a political campaigner.

Conclusion: The Need for Institutional Candour

Sri Lanka has paid a catastrophic price for populist rhetoric and the manipulation of economic facts for electoral gain. What the public requires from veteran economists and seasoned politicians today is not more political theater but radical candor.

The truth is simple: Sri Lanka is locked into a long-term, institutional structural adjustment programme that transcends whoever sits in the presidential secretariat. President AKD is executing pre-existing state commitments because the alternative is immediate economic isolation. Rather than trying to convince the public that they alone possess the secret key to salvation, opposition technocrats owe it to the nation to elevate the discourse. It is time to replace television showmanship with (i) honest, (ii) evidence-based planning, (iii) acknowledging that while politicians change, the arithmetic of national survival remains exactly the same.

(The writer, among many, served as the Special Advisor to the Office of the President of Namibia from 2006 to 2012 and was a Senior Consultant with the UNDP for 20 years. He was a Senior Economist with the Central Bank of Sri Lanka (1972-1993). He can be reached via asoka.seneviratne@gmail.com)

By Prof. Asoka S. Seneviratne

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