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Recovery of stolen money: Parliament needs to give legal effect to UN Convention against Corruption -lawyer

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BY SHAMINDRA FERDINANDO

Senior lawyer S. A. Cader sayas that it was the responsibility of Parliament to enact legislation to enable the country to seek UN support for the recovery of stolen public assets.Cader, senior partner at Julius & Creasy emphasised the urgent need to address the issue at hand as part of the overall efforts meant to stabilise the economy.The lawyer said so responding to SLPP National List MP Prof. G. L. Peiris’ recent declaration that cash-strapped Sri Lanka should seek the intervention of the UN’s Stolen Asset Recovery Initiative (StAR) run by the World Bank Group and the United Nations Office on Drugs and Crime (UNODC).

Appreciating the former Foreign Minister’s call, Cader told The Island: “As far as we are aware, mere fact Sri Lanka being a signatory to a UN convention will not make the convention a part and parcel of the Sri Lankan Law, unless a local legislation is enacted by the Parliament to give legal effect to the said convention per se. In this case, pursuant to Parliament passing legislation, the country can look forward to the UN and the World Bank to assist it.”

The joint initiative encourages countries to implement Chapter V of the United Nations Convention against Corruption (UNCAC).Sri Lanka signed the Convention on March 15, 2004 and ratified on March 31, 2004. Attorney-at-law Cader said now that a member of parliament had publicly suggested that Sri Lanka should seek UN assistance to recover stolen assets, political parties represented in parliament should go the whole hog.

Referring to the Supreme Court judgment given on Sept. 15, 2006 pertaining to the high profile Singarasa case, lawyer Cader stressed consequently that the parliament had to provide legal effect to UN Conventions. Nallaratnam Singarasa, who had been arrested for allegedly conspiring between May 1, 1990 and Dec 31, 1991 with the LTTE to attack army camps in the North. Singarasa was arrested on charges under the Prevention on Terrorism Act (PTA).

Addressing the media early this week at SLPP rebels’ Nawala Office, Prof. Peiris said that Sri Lanka experiencing the worst ever post-independence economic crisis could utilize the StAR to nab those who had stashed away stolen funds, both here and overseas.Prof. Peiris, who served as Foreign Minister twice (2010-2015 and August 2021-April 2022), said that the assistance of the international community and local organizations, specializing in anti-corruption activities, was required as successive governments failed to take tangible measures in that regard.

The recovery of stolen assets should be a priority for the government as it was struggling to cope up with further deterioration of the economic situation, the MP said.The Island sought clarification from former top law academic Prof. Peiris, yesterday (10) as regards the responsibility of parliament to enact law here to provide legal effect to UNCAC, the academic said: “I do not think a parliamentary initiative is essential. The critical factor is political will. The entire process can be triggered by the government taking up the matter with the UN system. Prevailing public mood is very conducive to this.

Former Chairman of Committee on Public Enterprises (COPE) Prof. Charitha Herath while appreciating the push for recovery of stolen money stressed the need to expose those responsible for waste, corruption, irregularities and mismanagement over the years. The SLPP National List MP pointed out that the economy was in such a precarious state, those now exercising political power should keep in mind the pending USD 2.9 bn IMF loan facility alone couldn’t save Sri Lankan economy.

Lawmaker Herath urged political parties represented in parliament to reach consensus on how to use the Auditor General’s findings and recommendations pertaining to public sector enterprises as well as disclosures made by parliamentary watchdog committees. The academic alleged that the Parliament a few months ago blocked efforts made by the COPE during his tenure as its Chairman to secure approval for the outfit to submit reports directly to the AG.

Herath stressed that the appraisal of the Attorney General’s Department as well as that of the Commission to Investigate Allegations of Corruption (CIABOC) as regards corruption cases was of pivotal importance as both institutions had been criticized. The MP noted that the Opposition requested information pertaining to the cases withdrawn by the AG and CIABOC as well as the outcome of judicial proceedings into high profile cases. Prof. Herath said whatever the initiatives undertaken with external support, the parliament should take tangible measures to ensure the environment required for genuine anti-corruption drive.

 Responding to another query, Prof. Herath said there couldn’t be any dispute that anti-corruption efforts had failed so far though some shocking disclosures were made over the years. Actually required action hadn’t been taken on the basis of revelations made before parliamentary watchdog committees.



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Unions resist tripartite EPF management plan

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… warn of dire consequences

A group of trade unions and civil society groups has requested President Anura Kumara Dissanayake to abandon his government’s controversial plan for the proposed tripartite management of the EPF.

The group has told the President: “We strongly object to the government’s plan to transfer the EPF to a tripartite board—jointly promoted by the Employers’ Federation of Ceylon (EFC), International Monetary Fund (IMF) and the International Labour Organisation (ILO)—and to increase the investments of those funds within private equity and debt markets.

“While the EFC and the government jointly project this plan as a ‘modern governance framework’, it poses a serious threat to the EPF’s financial stability, fiduciary conduct, and returns to workers’ life savings, with severe consequences for broader macroeconomic stability. Rather than replacing the corruption existing in the public sector, this tripartite framework paves the way for a corporate takeover of the EPF. Through this, the fund is exposed to unlawful business practices such as insider trading using internal information of EPF investments, conflicts of interest and corporate bailouts of unstable private companies.

“Sri Lanka’s corporate sector has a tremendously negative track record, which you alluded to during your victorious election campaign in 2024. This was recently unravelled by the multi-billion-dollar illicit capital flight through trade misinvoicing, which your administration is now actively working to curb in the imports sector.

“The recent banking sector fraud exceeds Rs. 13 billion; widespread corporate tax evasion destabilised the fiscal position (Sri Lanka Auditor General’s Department Annual Reports) and consequently inflated the tax burden on the general public. The EFC has found it convenient to remain silent about these crimes, possibly assuming that their silence would preserve their social standing. Considering this inherent corruption within Sri Lanka’s corporate sector and its disregard to the living standards of the general public, there is no realistic basis to integrate corporate interests to actively manage the EPF. The corporate sector of Sri Lanka has not developed sufficiently on technical and ethical grounds to safely entrust the largest retirement savings pool in the country. The EPF is a captive fund that has no mechanism for the owners to divest if the management is corrupt. This further increases the possibility of corporate fraud when the management of the fund is jointly held with the corporate sector.

“Furthermore, during the recent public discussion with trade unions, Deputy Minister of Finance Dr. Anila Jayantha pointed out that the domestic debt restructuring (DDR) would inflict a loss of Rs. 600 billion to the EPF. Our independent calculations—formally submitted as an affidavit to the Supreme Court approved by the Federation of University Teachers’ Associations in 2024—reveal that nominal loss alone is Rs. 634.4 billion. When factoring in foreclosed reinvestment returns, the true loss skyrockets to Rs. 1,711 billion, wiping out 48% of the fund’s projected gross income for the 2023 – 2028 period. Under the pretext of safeguarding the banking system, this colossal robbery preserved high yields on government bonds held by commercial banks and high-net-worth individuals, subsequently reaping them astronomical profits. Now, the exact same plunder is rearing its head again disguised as a tripartite committee.”

“The main arguments supporting our resistance and viable alternatives for optimising EPF management directly under the Central Bank of Sri Lanka (CBSL), are outlined below.

“Objections to the government’s tripartite proposal:

1. The “International best practice and conflict of interest fallacies”

The government holds that tripartite management of pension funds is the “international best practice” and that there is a “conflict of interest” in CBSL managing the EPF. They are key pillars justifying government’s tripartite proposal.

These two positions are shockingly misleading given that four of the five largest pension funds in the world, in Norway, Japan, the U.S., and Singapore, are managed directly by state bodies or central banks. Therefore, ‘international best practice’ in pension fund management is the exact opposite of what the government and the IMF are proposing. We hence reject these baseless positions.

2. Corporate captivity and bailouts

It is clear that the EFC is desperately pushing for this proposal at a time of global uncertainty, to cushion the effects of the crisis and maximise gains. Under corporate influence within the proposed tripartite board, the private conglomerates can use the multi-trillion-rupee EPF to continue their unstable commercial operations without having to risk their own capital or savings to do so. This will severely erode the financial stability of the EPF and its returns.

3. Risk of front running

“Because the EPF is a colossal fund, its investment decisions can alter asset prices. This creates immense monetary value for the information generated by its investment decisions. Corporate representatives on the proposed tripartite board will be perfectly positioned to use this information to trade ahead of the EPF (front-running), buying assets cheaply and dumping them onto the EPF at inflated prices for guaranteed corporate gain, resulting in a reduction of returns to the EPF.

4. Unavoidable loopholes

“Presence of a separate group of investment analysts, trade union representatives and government officials within the proposed tripartite structure cannot prevent pre-market corporate access to EPF’s investment decisions. Investment proposals made by the analysts has to be first approved by the proposed tripartite committee, making it impossible to prevent corporate access to insider information on EPF investments.”

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Two arrest warrants issued for Gnanasara thera

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Galagoda Aththe Gnanasara

The Colombo High Court and Court of Appeal yesterday issued arrest warrants for the Bodu Bala Sena general secretary Galagoda Aththe Gnanasara in a case involving an alleged statement insulting Islam.

The arrest warrants were issued on Tuesday and Wednesday. The Court of Appeal issued an open warrant two weeks after the court rescinded the presidential pardon granted to the thera when he was serving a six-year term for contempt of court.

The Appeals Court also imposed a travel ban on the monk and ordered that the Controller General of Immigration and Emigration be informed of the restriction.

The case was taken up before Colombo High Court Judge Buddhika C. Ragala. Gnanasara Thera was not present when the case was called.

A medical report was submitted stating that Thera was unwell, while his sureties also failed to appear before court. His counsel, Asoka Weerasuriya, told court that his client wished to bring the case to an early conclusion and that representations had been made to the Attorney General in that regard.

However, after considering the submissions, the High Court judge said he was not satisfied with the medical report submitted on behalf of the accused. The court also noted the failure of the sureties to appear.

The judge subsequently ordered that Gnanasara Thera be arrested and produced before court.The Attorney General filed the case under provisions of the Penal Code, alleging that remarks made by Gnanasara Thera concerning the Holy Quran amounted to an insult to Islam.

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CA dismisses GR’s writ petition against arrest

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Gotabaya

A two-member bench comprising Court of Appeal President Justice Rohantha Abeysuriya and Justice Sarath Dissanayake yesterday (1) dismissed a writ petition filed by former President Gotabaya Rajapaksa seeking judicial intervention to prevent his arrest under the Prevention of Terrorism Act (PTA) in connection with the ongoing investigations into 2019 Easter Sunday terror attacks.

The writ petition was rejected in limine.

In the petition, the former President cited Inspector General of Police Priyantha Weerasooriya, Criminal Investigation Department (CID) Director Shani Abeysekera, the Officer-in-Charge of the CID’s Special Investigations Unit and the Attorney General as respondents. The ex-President sought the court intervention after the arrest of former head of the State Intelligence Service (SIS) retired Maj. Gen. Suresh Sallay over the Easter Sunday attacks.

Since then , former Director of Directorate of Military Intelligence (DMI) has been named as a suspect.

Earlier, the Fort Magistrate’s Court imposed a travel ban on him in relation to investigations stemming from allegations made by Asad Moulana in the Channel 4 documentary on the Easter attacks.

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