Features

Presidential authority in times of emergency:A contemporary appraisal

Published

3 weeks ago

2025/12/18

‘The Supreme Court of Sri Lanka had recently to deal with this issue frontally (Ambika Satkunanathan v. Attorney General). This is a watershed decision because, for the first time in our legal history, the Supreme Court held that an Acting President of the Republic had violated the fundamental rights of the People, enshrined in the Constitution, by the declaration of a State of Emergency.’

Keynote Address Delivered at the International Research Conference of the Faculty of Law, University of Colombo, on 12 December 2025.

1. The Policy Dilemma

One of the great challenges of modern public law is to reconcile traditional principles relating to the rule of law and the separation of powers with the exigencies of crises which threaten the destruction of society itself. To what extent must protective mechanisms developed by systems of law over the ages give way to the need for physical survival in the throes of life-threatening crises? What is the right balance to be struck, as a matter of public policy?

The classic statement is by John Locke, who insisted that, in emergencies, the government should have legally unfettered power “to act according to discretion, for the public good, without the prescription of the law, and sometimes even against it” (Second Treatise of Government). This is an ancient idea which goes back to Roman times, when Cicero, in his famous oration, Pro Milone, declared: “Inter arma silent leges” (“Amid the clash of arms, the laws are silent”).

This received expression in the present century in the work of Carl Schmitt, who insisted that “The sovereign is he who decides on the state of exception” (Political Theology:Four Chapters on the Concept of Sovereignty). According to him, not only is the sovereign’s authority untrammelled during emergency, but the declaration of emergency is his right alone, dependent solely on the exercise of his subjective judgment. This unqualified power springs from the supreme law of nature—-the safety of the people.

Judicial pronouncements across the world explicitly reflect this point of view. Justice Story, on behalf of the Supreme Court of the United States, famously declared: “The question arises, by whom is the exigency to be judged and decided? We are all of opinion that the authority to decide whether the exigency has arisen, belongs exclusively to the President, and that his decision is conclusive upon all other persons” (Martin v. Mott).In Ghulam Sarwar v. Union of India, Subba Rao CJ, speaking for the Supreme Court of India, observed: “The question whether there is grave emergency is left to the satisfaction of the Executive, for it is obviously in the best position to judge the situation”.

There is, however, equally emphatic opinion to the contrary. Khanna J, in a celebrated dissent, was scathing in his denunciation of the opposite approach: “The position would be that, so far as executive officers are concerned, in matters relating to life and personal liberty of citizens, they would not be governed by any law, they would not be answerable to any court, and they would be wielding more or less despotic powers” (Additional District Magistrate, Jabalpur v. Shivakant Shukla).

These competing postulates have been articulated with equal passion.

II. A Landmark Pronouncement by the Supreme Court of Sri Lanka

The Supreme Court of Sri Lanka had recently to deal with this issue frontally (Ambika Satkunanathan v. Attorney General). This is a watershed decision because, for the first time in our legal history, the Supreme Court held that an Acting President of the Republic had violated the fundamental rights of the People, enshrined in the Constitution, by the declaration of a State of Emergency.

The circumstances against the backdrop of which this historic ruling was made, are well known. A serious depletion of foreign reserves resulted in a severe shortage of basic amenities like fuel, cooking gas, electricity, staple food items, and medicine. In the context of an unprecedented default in the repayment of foreign loans and significant depreciation of the rupee, extended power cuts and galloping inflation led to acute economic hardship. These circumstances culminated in unrest on a scale never seen before on the Island.

Violence included the brutal murder of a Member of Parliament, the torching of residences of the Prime Minister and more than 70 other political personalities, forcible occupation of the Presidential Secretariat, the President’s official residence and the Office of the Prime Minister, with almost a million people gathered in Colombo demanding the resignation of the President. The elected President had fled the country, and a date had been set for an urgent meeting of Parliament to elect the President in accordance with procedure spelt out in the Constitution. An unruly mob had encircled Parliament, threatening to prevent this meeting from taking place. This was the situation in which Acting President Ranil Wickemesinghe declared a State of Emergency.

He did so in terms of provision in the Public Security Ordinance, which empowered him to take this action, if he was of opinion that this was “expedient in the interests of public security and the preservation of public order, or for the maintenance of supplies and services essential to the life of the community”(section 2).

The decision was that of a divided Supreme Court. The majority consisted of Murdu Fernando CJ and Yasantha Kodagoda J, while there was a vigorous dissent by Arjuna Obeyesekere J. The minority held that the circumstances warranted the opinion entertained by the Acting President, while the plurality declared themselves prepared to make this assumption. This, then, was common ground. The difference of opinion pertained to another vital issue.

Once the Acting President (hereinafter referred to as the President), had reached this conclusion, he had four optional courses of action available to him:

(i) He could have recourse to the routine law, principally the provisions of the Penal Code and the Criminal Procedure Code, to deal with the situation;

(ii) He could invoke Part III of the Public Security Ordinance, which would enable him to take particular actions such as calling out the Armed Forces to supplement the Police, prevent public gatherings on highways and in the vicinity of bridges and other specified locations, and declare curfew. These measures could be taken, short of proclamation of a State of Emergency;

(iii) He could take the “drastic step”, under Part II of the Public Security Ordinance, to bring into force the provisions contained within that section, in terms of which an Emergency could be declared, applicable to the whole Island;

(iv) While declaring an Emergency under Part II, he could confine its operation to particular parts of the Island.

This is where the difference of opinion between the plurality and the minority of the court manifested itself. The majority was of opinion that the President’s satisfaction relating to the existence of objective conditions justifying declaration of Emergency did not automatically entitle him to go the full length of bringing into being a nationwide Emergency under Part II, but obligated him further to consider whether measures of a more limited nature, contemplated by Part III, would be sufficient to deal effectively with the situation.Failure to do so, according to their ruling, would involve a breach of the Constitution.

By contrast, the minority was convinced that “Once the President has come to the conclusion that a state of public emergency exists, there is no purpose in mandating a consideration of other options”, and that “Requiring the President to embark on whether the ordinary laws or other various provisions or options would be adequate to deal with a public or national emergency, would be unreasonable and an unprecedented step”. On this basis, the minority held that the President’s actions were entirely within the Constitution, and entailed no liability for contravention of fundamental rights.

A great deal hinged, in practical terms,

on the divergence between these points of view.

III. Categories of Emergency: Uniform or Disparate Rules?

Contemporary trends in the law acknowledge marked differences in scale, intensity, and duration among types of emergency which precipitate varying degrees of government paralysis.

South African law incorporates one comprehensive definition of a State of Emergency, capable of invocation when “the life of the nation is threatened by war, invasion, general insurrection, disorder, natural disaster, or other public emergency” (Constitution, Article 37(1)(a)). Preferable, by far, is the position under the Emergencies Act of Canada, which recognises four different kinds of emergencies— natural disasters, threats to public order, international emergencies, and states of war (Section 18(2)). This enables different degrees of Parliamentary scrutiny and control.

The Constitution of India provides another example of this approach. Article 352 envisages a threat to the security of India or any part of the country by reason of war, external aggression or armed rebellion, while Article 356 contemplates a failure of constitutional government in any Indian state, and the context of Article 360 is jeopardy to the financial stability or credit of India.

In the spectrum of gravity, peril to the very existence of the state, in the degree present in the Sri Lankan situation, attracts the highest concern. In circumstances of potential government breakdown, “facile distrust” is not the recommended counsel. The courts of India have cautioned that “When there is a crisis situation, it is necessary to trust the government with extraordinary powers in order to enable it to overcome such crisis” (Bhagvati J. in Shivakant Shukla).

Undue concern about a lawless situation, typified by unbridled executive power, is not realistic. Emergency legislation has rightly been characterized as “extra-legislative legislation”. Far from there being a legal vacuum, systems of law have furnished practical safeguards, while enabling public order to be maintained.

One of these is the imaginative “super-majority escalator” technique, characteristic of South African law. Only a simple majority of Parliament is required to approve a State of Emergency operative for a maximum period of 21 days, and to extend it up to 3 months. Beyond that, a 60% majority is compulsory for further extensions (Article 37). Here, then, is a successful reconciliation of competing objectives.

Article 16 of the Constitution of the Fifth Republic in France empowers the President to determine not only the sufficiency of conditions warranting the declaration of a State of Emergency, but also its appropriate duration. Restraints on Presidential power in France are weak because the President, although required to consult the Conseil Constitutionel (Constitutional Court), is not bound by its advisory opinion, in the event of contrary advice.

Relative amplitude of Presidential power in emergency situations in France has been justified by a prominent French jurist, François Saint-Bonnet, on the basis that the curtailment of emergency powers at the disposal of the Executive carries the risk of deprivation of the very tools which the government finds indispensable to combat the threat.

Germany’s Basic Law, although wary of emergency powers because of the harrowing experience of Article 48(2) of the Constitution of the Weimar Republic, which paved the way for the rise of Hitler, nevertheless does not balk at recognizing “internal emergencies” which enable intervention by the Executive, albeit subject to control by the Federal Parliament.

Constitutional provisions in different jurisdictions, irrespective of the approach selected, envisage substantial executive power in times of emergency, curtailed by surveillance on the part of the elected Legislature.

IV. Restraints on Judicial Intervention

The decided cases in many countries are replete with examples of indicia which concede to the Executive great latitude in these contexts. The recurring feature is the urging of restraint in the exercise of judicial review in keeping with a suitably benign construction, consistent with constitutional standards. This is reflected in unimpeachable academic authority, as well.

It has been insisted that executive decisions “should be taken seriously as a bona fide attempt to solve whatever social problem they set out to tackle”(Aileen Kavanagh).The caution has been administered that judges should exercise great caution before concluding that the government has violated constitutional rights(Prof. T. R. S. Allan) and,in public emergencies threatening the life of the nation, elected officials should be permitted “to err, if at all, on the side of safety”(Lord Bingham).The courts “should resist the temptation to substitute their own preferred solutions to questions of public policy”(Allan).

This is so, for a number of reasons. One of them is that the public authority is entitled to latitude because it has “a kind of responsibility to advance the public interest that a court does not have”(Brooke L.J.).This is reinforced by other considerations. For instance, possession of special expertise by the executive authority is an important factor.

The nature of the subject matter, for this very reason, has a vital bearing on the issue. Judges have been conscious that “the more political the question is, the more appropriate it will be for political resolution, and the less likely it is to be an appropriate matter for judicial decision”(Lord Bingham).

A responsible and representative system of democratic governance brings into sharp focus “the degree of democratic accountability of the original decision maker, and the extent to which other mechanisms of accountability may be available”(Murray Hunt).Basic values of constitutionalism identify Parliamentary controls as infinitely preferable, in this regard, to judicial intervention.

This has to do with the nature and legitimate confines of the judicial function. Mirza Beg J, speaking for the Supreme Court of India, has candidly conceded that “the judicial process suffers from inherent limitations”(Shivakant Shukla).This is essentially because a court “can neither have full and truthful information, nor the means to such information”(Chandrachud J in Shivakant Shukla),especially in respect of classified information.

An absolute imperative is that the distinction between judicial review and substitution of judgment must be scrupulously observed. Admittedly contextual, this principle is of overriding significance because it is “wrong to expect executive bodies to replicate the style of analysis adopted by courts in determining allegations of violation of rights”(T. R. S. Allan).

It is crucial for the rule of law that the dividing line between these two distinct functions should not become inadvertently blurred. It is not necessary for the public authority to address itself to the same legal arguments as the court(Court of Appeal of England in the Begum case),the judicial function being restricted by the consideration that “the court is usually concerned with whether the decision maker reached his decision in the right way, rather than whether he got what the court might think to be the right answer”(Lord Hoffmann).

The raison d’etre underpinning executive intervention in these extraordinary situations should be constantly borne in mind. The reality is the absence of a practical substitute. “Neither the legislature nor the judiciary is capable of swift, energetic action, which leaves the executive by default as the authoritative body”(David Dyzenhaus).For this inescapable reason, there has been constant emphasis that executive actors “should not be deterred from engaging in the very activity needed,and contemplated, to deal with the crisis”.

The overarching object of policy is the preservation of public confidence. “The faster and more effective the response, the smaller the overall damage to society, as a whole. The best way for government to respond to these fears is to do something large and dramatic to reassure the populace”(Bruce Ackerman).

The weight attaching to these elements of public policy is self-evident. (To be continued)

By Professor G. L. Peiris

D. Phil. (Oxford), Ph. D. (Sri Lanka); Rhodes Scholar,Quondam Visiting Fellow of the Universities of Oxford, Cambridge and London; Former Vice-Chancellor and Emeritus Professor of Law of the University of Colombo.

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Features

The Paradox of Trump Power: Contested Authoritarian at Home, Uncontested Bully Abroad

Published

2 hours ago

2026/01/11

Thilina Walpola

Protests and a vigil have been held in Minneapolis, Minnesota, where the shooting of Renee Nicole Good occurred on Wednesday (photo courtesy BBC)

The Trump paradox is easily explained at one level. The US President unleashes American superpower and tariff power abroad with impunity and without contestation. But he cannot exercise unconstitutional executive power including tariff power without checks and challenges within America. No American President after World War II has exercised his authority overseas so brazenly and without any congressional referral as Donald Trump is getting accustomed to doing now. And no American President in history has benefited from a pliant Congress and an equally pliant Supreme Court as has Donald Trump in his second term as president.

Yet he is not having his way in his own country the way he is bullying around the world. People are out on the streets protesting against the wannabe king. This week’s killing of 37 year old Renee Good by immigration agents in Minneapolis has brought the City to its edge five years after the police killing of George Floyd. The lower courts are checking the president relentlessly in spite of the Supreme Court, if not in defiance of it. There are cracks in the Trump’s MAGA world, disillusioned by his neglect of the economy and his costly distractions overseas. His ratings are slowly but surely falling. And in an electoral harbinger, New York has elected as its new mayor, Zoran Mamdani – a wholesale antithesis of Donald Trump you can ever find.

Outside America it is a different picture. The world is too divided and too cautious to stand up to Trump as he recklessly dismantles the very world order that his predecessors have been assiduously imposing on the world for nearly a hundred years. A few recent events dramatically illustrate the Trump paradox – his constraints at home and his freewheeling abroad.

Restive America

Two days before Christmas, the US Supreme Court delivered a rare rebuke to the Trump Administration. After a host of rulings that favoured Trump by putting on hold, without full hearing, lower court strictures against the Administration, the Supreme Court by a 6-3 majority decided to leave in place a Federal Court ruling that barred Trump from deploying National Guard troops in Chicago. Trump quietly raised the white flag and before Christmas withdrew the federal troops he had controversially deployed in Chicago, Portland and Los Angeles – all large cities run by Democrats.

But three days after the New Year, Trump airlifted the might of the US Army to encircle Venezuela’s capital Caracas and spirit away the country’s President Nicolás Maduro, and his wife Celia Flores, all the way to New York to stand trial in an American Court. What is not permissible in any American City was carried out with absolute impunity in a foreign capital. It turns out the Administration has no plan for Venezuela after taking out Maduro, other than Trump’s cavalier assertion, “We’re going to run it, essentially.” Essentially, the Trump Administration has let Maduro’s regime without Maduro to run the country but with the US in total control of Venezuela’s oil.

Next on the brazen list is Greenland, and Secretary of State Marco Rubio who manipulated Maduro’s ouster is off to Copenhagen for discussions with the Danish government over the future of Greenland, a semi-autonomous part of Denmark. Military option is not off the table if a simple real estate purchase or a treaty arrangement were to prove infeasible or too complicated. That is the American position as it is now customarily announced from the White House podium by the Administration’s Press Secretary Karolyn Leavitt, a 28 year old Catholic woman from New Hampshire, who reportedly conducts a team prayer for divine help before appearing at the lectern to lecture.

After the Supreme Court ruling and the Venezuela adventure, the third US development relevant to my argument is the shooting and killing of a 37 year old white American woman by a US Immigration and Customs Enforcement (ICE) officer in Minneapolis, at 9:30 in the morning, Wednesday, January 7^th. Immediately, the Administration went into pre-emptive attack mode calling the victim a “deranged leftist” and a “domestic terrorist,” and asserting that the ICE officer was acting in self-defense. That line and the description are contrary to what many people know of the victim, as well as what people saw and captured on their phones and cameras.

The victim, Renee Nicole Good, was a mother of three and a prize-winning poet who self-described herself a “poet, writer, wife and mom.” A newcomer to Minneapolis from Colorado, she was active in the community and was a designated “legal observer of Immigration and Customs Enforcement (ICE) activities,” to monitor interactions between ICE agents and civilian protesters that have become the norm in large immigrant cities in America. Renee Good was at the scene in her vehicle to observe ICE operations and community protesters.

In video postings that last a matter of nine seconds, two ICE officers are seen approaching Good’s vehicle and one of them trying to open her door; a bystander is heard screaming “No” as Good is seen trying to drive away; and a third ICE officer is seen standing in front of her moving vehicle, firing twice in the direction of the driver, moving to a side and firing a third time from the side. Good’s car is seen going out of control, careening and coming to a stop on a snowbank. Yet America is being bombarded with two irreconcilable narratives – one manufactured by Trump’s Administration and the other by those at the scene and everyone opposed to the regime.

It adds to the explosiveness of the situation that Good was shot and killed not far from where George Folyd was killed, also in Minneapolis, on 25^th May, 2020, choked under the knee of a heartless policeman. And within 48 hours of Good’s killing, two Americans were shot and injured by two federal immigration agents, in Portland, Oregon, on the Westcoast. Trump’s attack on immigrants and the highhanded methods used by ICE agents have become the biggest flashpoint in the political opposition to the Trump presidency. People are organizing protests in places where ICE agents are apprehending immigrants because those who are being aggressively and violently apprehended have long been neighbours, colleagues, small business owners and students in their communities.

Deportation of illegal immigrants is not something that began under Trump. It has been going on in large numbers under all recent presidents including Obama and Biden. But it has never been so cruel and vicious as it is now under Trump. He has turned it into a television spectacle and hired large number of new ICE agents who are politically prejudiced and deployed them without proper training. They raid private homes and public buildings, including schools, looking for immigrants. When faced with protesters they get into clashes rather than deescalating the situation as professional police are trained to do. There is also the fear that the Administration may want to escalate confrontations with protesters to create a pretext for declaring martial law and disrupt the midterm congressional elections in November this year.

But the momentum that Trump was enjoying when he began his second term and started imposing his executive authority, has all but vanished and all within just one year in office. By the time this piece appears in print, the Supreme Court ruling on Trump’s tariffs (expected on Friday) may be out, and if as expected the ruling goes against Trump that will be a massive body blow to the Administration. Trump will of course use a negative court ruling as the reason for all the economic woes under his presidency, but by then even more Americans would have become tired of his perpetually recycled lies and boasts.

An Obliging World

To get back to my starting argument, it is in this increasingly hostile domestic backdrop that Trump has started looking abroad to assert his power without facing any resistance. And the world is obliging. The western leaders in Europe, Canada and Australia are like the three wise monkeys who will see no evil, hear no evil and speak no evil – of anything that Trump does or fails to do. Their biggest fear is about the Trump tariffs – that if they say anything critical of Trump he will magnify the tariffs against their exports to the US. That is an understandable concern and it would be interesting to see if anything will change if the US Supreme Court were to rule against Trump and reject his tariff powers.

Outside the West, and with the exception of China, there is no other country that can stand up to Trump’s bullying and erratic wielding of power. They are also not in a position to oppose Trump and face increased tariffs on their exports to the US. Putin is in his own space and appears to be assured that Trump will not hurt him for whatever reason – and there are many of them, real and speculative. The case of the Latin American countries is different as they are part of the Western Hemisphere, where Trump believes he is monarch of all he surveys.

After more than a hundred years of despising America, many communities, not just regimes, in the region seem to be warming up to Trump. The timing of Trump’s sequestering of Venezuela is coinciding with a rising right wing wave and regime change in the region. An October opinion poll showed 53% of Latin American respondents reacting positively to a then potential US intervention in Venezuela while only 18% of US respondents were in favour of intervention. While there were condemnations by Latin American left leaders, seven Latin American countries with right wing governments gave full throated support to Trump’s ouster of Maduro.

The reasons are not difficult to see. The spread of crime induced by the commerce of cocaine has become the number one concern for most Latin Americans. The socio-religious backdrop to this is the evangelisation of Christianity at the expense of the traditional Catholic Church throughout Latin America. And taking a leaf from Trump, Latin Americans have also embraced the bogey of immigration, mainly influenced by the influx of Venezuelans fleeing in large numbers to escape the horrors of the Maduro regime.

But the current changes in Latin America are not necessarily indicative of a durable ideological shift. The traditional left’s base in the subcontinent is still robust and the recent regime changes are perhaps more due to incumbency fatigue than shifts in political orientations. The left has been in power for the greater part of this century and has not been able to provide answers to the real questions that preoccupied the people – economic affordability, crime and cocaine. It has not been electorally smart for the left to ignore the basic questions of the people and focus on grand projects for the intelligentsia. Exhibit #1 is the grand constitutional project in Chile under outgoing President Gabriel Borich, but it is not the only one. More romantic than realistic, Boric’s project titillated liberal constitutionalists the world over, but was roundly rejected by Chileans.

More importantly, and sooner than later, Trump’s intervention in Venezuela and his intended takeover of the country’s oil business will produce lasting backlashes, once the initial right wing euphoria starts subsiding. Apart from the bully force of Trump’s personality, the mastermind behind the intervention in Venezuela and policy approach towards Latin America in general, is Secretary of State Marco Rubio, the former Cuban American Senator from Florida and the principal leader of the group of Cuban neocons in the US. His ultimate objective is said to be achieving regime change in Cuba – apparently a psychological settling of scores on behalf Cuban Americans who have been dead set against Castro’s Cuba after the overthrow of their beloved Batista.

Mr. Rubio is American born and his parents had left Cuba years before Fidel Castro displaced Fulgencio Batista, but the family stories he apparently grew up hearing in Florida have been a large part of his self-acknowledged political makeup. Even so, Secretary Rubio could never have foreseen a situation such as an externally uncontested Trump presidency in which he would be able to play an exceptionally influential role in shaping American policy for Latin America. But as the old Burns’ poem rhymes, “The best-laid plans of men and mice often go awry.”

by Rajan Philips ✍️

Features

Unsuccessful attempt on President Chandrika’s life

Published

3 hours ago

2026/01/11

Thilina Walpola

Town Hall bomb scene after 1999 attempt on CBK’s life

The Presidential election campaign was drawing to a close. We had campaigned hard but everyone knew that it would be a keenly contested election. A final meeting was scheduled for Saturday December 18, 1999. It was to be held near the Town Hall in Colombo and CBK was to be the chief speaker. I was accommodated in the front row of the stage together with other party leaders.

Ratnasiri Wickremanayake, the Prime Minister, had invited me to be a speaker at his final meeting in Horana. I waited till CBK arrived, spoke briefly to her and left for Horana. I had barely reached Havelock Town when I heard the sound of a blast from near the Town Hall. It was a well planned attempt on the life of CBK by the LTTE. Suicide bombers had come into the well packed grounds with a group of supporters of a Colombo district SLFP MP. Fortunately they had been prevented from coming close to the stage by the barriers set up by the Police.

CBK had finished her speech to a packed audience and was going down the gangway from the stage to her car when the bomber had detonated his bomb killing himself, several policemen, CBKs driver and many onlookers. But for the fact that her driver had driven up to the steps, thereby interposing the steel reinforced Mercedes Benz car between the bomb and CBK she would have been torn to shreds.

When we inspected the Benz it was a mass of twisted metal like a futuristic sculpture. I forgot about Horana and immediately rushed to the general hospital where to my relief I was told that the President was alive and out of danger. Since I had experience of the bombing of the UNP group meeting in Parliament during JRJs time, I rushed to Temple Trees to find that Sunethra Bandaranaike had fortunately promptly come there and was with the children upstairs.

The Temple Trees staff congregating downstairs were wandering about in shock till the arrival of President’s Secretary Balapatabendi. I urged that we should immediately get down Anuruddha Ratwatte -the Deputy Defence Minister, who at that time was in Kandy. A problem arose because helicopters could not fly at night. He was asked to come immediately by road and he did arrive in the shortest time.

Town Hall bomb scene CBK’s

In the meanwhile I suggested that Balapatabendi should broadcast the news that CBK was alive and out of danger as we had done with JRJ after the Parliament bombing. Already news about the attack was swirling because international media was using it as “Breaking News”. Bala and I went to the TV station and as he was getting into the studio I noticed that he was dressed in a black shirt which could have given a bad message to the country. I quickly took off my shirt and exchanged it for Balas black shirt. He then spoke on camera trying to calm the country wide audience dressed in an over-sized shirt.

We went back to Temple Trees and found that the PM and other Cabinet Ministers and relatives had arrived there and were taking charge of the situation. I then went to the General Hospital to see GL Peiris and Alavi Moulana who were in a state of shock and awaiting medical attention. Alavi’s shirt was blood stained and his sons were helplessly moving around asking for immediate medical attention.

After that both sides did not campaign in the remaining few days. The whole country was in a state of shock and disbelief. To the credit of Ranil Wickremesinghe he immediately visited CBK to wish her a speedy recovery and virtually called off his campaign. The shock of the Town Hall blast was compounded when almost at the same time a bomb was set off by the LTTE in Wattala where the UNP was holding a propaganda meeting. Major General Lucky Algama who was in charge of security was killed in this blast together with several UNP supporters.

Presidential Election December 2019

The presidential election was held as scheduled. We witnessed a clear shift of the sentiments of voters towards CBK after the bombing. I went to Kandy to cast my vote early as usual at the Nugawela voting centre. Immediately after that I left for Colombo. All along the road women of all ages were gathering in great numbers to cast their votes. It became clear that a sympathy vote was in the offing, especially among women. They could empathize with CBK who had lost a father and husband and now nearly lost her own life in the cause of public service.

The election results when announced proved that our hunch was correct. The declared results were as follows;

CBK

4,312,157 Votes [51.1 Percent]

Ranil

3,602,748 Votes [42.71 Percent]

Nandana Gunatillake

[JVP] 344,173 [4.08 Percent]

CBK then took a courageous decision which unfortunately backfired on her many years on as I will describe in a succeeding chapter. In the light of possible confusion following the bombing she decided to take her oath of office as the new President immediately though she had several months more to serve in terms of her earlier mandate. Though she had a team of brilliant lawyers including H L de Silva and R K W Goonesekere to advice on constitutional matters such details were not analyzed by her political staff. She took oaths before Chief Justice Sarath Nanda Silva and on the following day left for UK for medical treatment.

(Excepted from Vol. 3 of the Sarath Amunugma autobiography) ✍️

Features

My experience in turning around the Merchant Bank of Sri Lanka (MBSL)

Published

3 hours ago

2026/01/11

Thilina Walpola

LESSONS FROM MY CAREER: SYNTHESISING MANAGEMENT THEORY WITH PRACTICE – PART 29

The last episode covered the final stages of my work as Advisor to the National Productivity Drive at the Ministry of Industrial Development. Soon after, in September 1998, I accepted the position of Managing Director of the Merchant Bank of Sri Lanka (MBSL). This chapter shares key events and lessons from my time there.

First few weeks at MBSL

The Board agreed that, for the first month, I would work only half-days, as I still had obligations I could not abandon. I was organising the International Convention on Quality Circles 1998, which attracted many foreign participants, and although we had appointed an event organiser, numerous arrangements still required my involvement. I will write more about that Convention later in these memoirs.

Those half-days turned out to be useful. They allowed me to quietly observe and understand the situation. MBSL was in worse shape than I had expected. The financial problems were visible to anyone who read the statements. The bigger crisis, however, was the staff’s morale and the rapid loss of staff members.

During the interim management period, many staff benefits had been cut, and several senior executives had already left. In the first few months, farewell gatherings became routine. It felt like rats leaving a sinking ship. And indeed, the organisation was sinking. Yet I had accepted the challenge — largely because I sensed that the Chairperson could secure government support, which she had already begun to do.

The broader environment added to the tension. The LTTE conflict was still active. Our office building, a very tall building located near the Colpetty junction, was a prime target. It had an Air Force unit with anti-aircraft guns on the rooftop one floor above he boardroom.. No one was allowed there without special permission, even though the area had originally been designed as a rooftop function space.

The first board meeting was quite hilarious because, while we were discussing important strategic issues, the upper floor was reverberating with a baila session, with boots tapping the floor keeping time. Apparently, the unit had an assurance that there would be no air strikes, and they could take a break.

My own office was spacious, but the windows were blocked because Temple Trees — the official residence of the Prime Minister — was clearly visible if not. At first, working without any outside view felt quite oppressive. Eventually, I grew accustomed to it.

Once I began full-time work in October, I carefully examined the situation with the help of my capable team. Several senior employees were not leaving for higher-paying opportunities or foreign jobs — they were committed, though uncertain about the future.

Then came investigations by the Central Bank and the Securities and Exchange Commission. Much of my time was spent responding to information requests and ensuring that all releases of information were approved. Many years previously, MBSL had unintentionally become a subsidiary of the Bank of Ceylon (BOC) when BOC’s investment arm purchased shares that pushed ownership above 50 per cent.

Hence although we were not a deposit taking institution and therefore not under the regulatory oversight of the Central Bank, we were under the Central Bank scrutiny because we were a subsidiary of the BOC. Although we were independent in operations, the customary practice was that the BOC Chairman would also chair MBSL, together with other BOC directors serving on our board. Our Chairperson, Mrs Dayani de Silva, was determined to turn MBSL around.

At that time, we operated two main divisions:

· Corporate finance, including advisory and investment banking; and

· Leasing, including trade finance.

In addition, there were the service divisions such as Human Resources, Secretarial and Finance and Accounting

Staff matters and the trade union

Morale was low. staff resisted the benefit cuts and the shift toward rules that resembled those of government departments. Signing an attendance register was particularly disliked.

I reviewed the situation carefully. Some of the removed benefits saved only trivial amounts. I reinstated those. I also installed an electronic time-card system for everyone — including myself. I announced clearly that I would clock in every day, just as they did. Naturally, the first few months were not easy.

I began holding monthly staff meetings to explain what we were doing, why we were doing it, and where we stood financially. Communication had clearly been lacking earlier, and these meetings helped rebuild trust. I also operated an “open door” policy, welcoming any employee who wished to meet me. The performance appraisal system was another issue. Instead of motivating staff, it had become a source of resentment. I suspended it for two years and asked everyone to work together as one team.

Most employees up to the Deputy Manager level were unionised, affiliated with the Ceylon Bank Employees Union (CBEU), headed by Mr M. R. Shah. The collective agreement was due, and the union presented a long list of demands — many of them impossible, given our financial state. Normally, negotiations take place between the Employers’ Federation of Ceylon (EFC) and the CBEU. The Director General of the EFC, Mr Gotabhaya Dassanayake, advised me first to build mutual confidence, especially as I had never met Mr Shah before.

I invited Mr Shah to my office. Over tea, I openly explained the crisis we were facing, our restructuring plan, and the management approach we intended to adopt. He listened carefully and asked sensible questions. We parted on friendly terms, and more importantly, with a shared understanding.

A month later, negotiations began at the EFC. To my surprise, Mr Shah began by saying that, after speaking with the new Managing Director, he understood our difficulties and accepted the direction we were taking. He then withdrew several demands on the spot. I was relieved, not because demands were dropped, but because he had recognised our sincerity and our plan. Later, Mr Dassanayake telephoned to say he had rarely seen such cooperation. In time, as restructuring succeeded, we gradually restored many benefits. That entire episode reinforced a powerful lesson: honest communication and genuine leadership build trust far faster than confrontation.

Expanding leasing

The board was deeply concerned about the leasing division. Non-performing loans were very high, and they urged me to restrict new business and focus solely on recoveries. I informed the board that management was partly to blame because the staff was pressured to meet stretch targets, and all we got were substandard leasing facilities. Targets without safeguards are never beneficial.

My thinking differed. Aggressive recovery efforts often demoralise good customers and overburden staff. In addition, the customers were already in great difficulty because they had no financial means to meet their leasing obligations. Instead, I believed we needed to build a new, healthier portfolio, while also expanding fee-based advisory work with lower risk. I had also abandoned my consultancy business when I joined MBSL, and proposed creating a new subsidiary to bring that kind of business into the bank. The board rejected it – understandably, given past failures with subsidiaries, including one in Nepal.

We decided that if our leasing operations were to grow, they needed to feel more connected to ordinary Sri Lankans. Research revealed that many people viewed us as an “English-speaking bank.” That perception alone discouraged potential customers.

So, we refreshed our leasing brand. The new logo carried the Sinhala word for “leasing,” applications were printed in Sinhala, and signboards carried both languages. Even the telephone operator’s greeting changed. Instead of the polished “Good morning, MBSL,” which sometimes intimidated Sinhala-speaking callers, we switched to “Ayubowan, MBSL.” It was friendly, respectful, and immediately accepted across all segments.

When an SME business owner comes for a lease, they have already selected the vehicle, and the decision is more based on ego than on a business requirement. We would discourage them and enlighten them that the vehicle does not match their requirements, and advise them to select a smaller one. They look unhappy, but they finally agree when presented with the maths of repayment.

We also organised short educational sessions for our customers on how to maintain vehicles, extend tyre life, the importance of the correct lubricants, and improve customer service. These simple initiatives created goodwill, strengthened customer relationships, and soon, the leasing business began to grow. At the same time, we were tough on recoveries, and some unpleasant moments included we seized a vehicle when a couple was on their honeymoon. The board, while pressuring me to recover, also constantly reminded me that no strong-arm tactics should ever be used.

Improving cash availability

Before I joined, two government institutions had agreed to provide debentures, with Treasury comfort letters. However, a condition required us to build a monthly sinking fund for repayment. To me, this made little sense. We were already short of operating cash. Locking more away would only weaken us further.

The head of finance had faithfully followed the rule. I instructed him to stop doing so and to use the funds for business expansion. When the board asked how we planned to repay the debentures, my answer was simple: growing organisations borrow when repayment comes due — that is how business operates.

We also began selling off our minority shareholdings from our share portfolio wherever possible even at a loss. The market was depressed, and those investments in shares contributed nothing to our survival. We retained only the Merchant Credit of Sri Lanka and divested the others. Gradually, liquidity improved, and operations stabilised.

The thorny bonus issue

Before my arrival, the board had approved bonuses despite the 1997 crisis. I was surprised how it happened soon after chalking up a billion rupee loss. However, just three months into my tenure, the board refused the December 1998 bonus. I found myself in a painful position. The EFC warned that withholding payment was risky because bonuses were written into appointment letters. Yet, reality was clear — we simply could not afford it.

I addressed the staff personally, explained the situation frankly, and announced the decision. The disappointment was visible everywhere. But given the circumstances, they accepted it.

There were more challenges and many more lessons still to come. In the next article, I will continue the story of how, step by step, we navigated those difficulties and rebuilt the organisation.

(The writer is a Consultant on Productivity and Japanese Management Techniques

Retired Chairman/Director of several listed and unlisted companies
Recipient of the APO Regional Award for Promoting Productivity in the Asia-Pacific Region
Recipient of the Order of the Rising Sun, Gold and Silver Rays from the Government of Japan
Email: bizex.seminarsandconsulting@gmail.com)

By Sunil G. Wijesinha ✍️