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The history of the 1962 oil takeover by the Sirima B government

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by Charitha. P. de Silva

(This piece has been excerpted from business leader Charitha. P. de Silva’s Memoirs published in 2018 in the context of the impending Trincomalee Oil Tank Farm deal which is today a hotly discussed topic. De Silva who retired as Chairman of Aitken Spence in a professional accountant who began his post qualification working life at Caltex, one of the three multinational oil giants running the petroleum import and distribution business in then Ceylon nationalized in 1962 by the Sirima Bandaranaike government.)

To get back to my Caltex days: danger was looming for us in the form of the powerful Leftist group in Mrs Bandaranaike’s cabinet. Minister T.B. Ilangeratne and two leftist officials, Sam Silva (Civil Servant) and G.V.S. de Silva (brilliant economist and a former classmate of mine at Royal) had convinced Mrs B that it was very much in the interests of the country to nationalise the Oil Industry that was run by three foreign oil companies, Shell, Esso and Caltex.

GVS and Co. had been publishing articles showing how much foreign exchange would be saved if Sri Lanka imported crude from sources such as Russia and refined it herself. I saw very clearly that the writing was on the wall, and tried to persuade my Managing Director, Harry Bernard, to allow me to refute some of the fallacious arguments that GVS and Co were putting forward.

Bernard was a very cautious, mild man and was loath to write anything that might antagonize the government. In this frustrating situation our Intelligence man, Douglas Kelly (former senior policeman) informed us on a Monday that a gazette was already printed to take over the Caltex Oil Installation at Bloemendhal on the Friday!

I walked into Bernard’s room and asked him “Harry, can I write something now?” Deeply depressed he told me to go ahead and write whatever I wanted. I immediately sat down and wrote a strong article refuting many of the claims made by GVS. I pointed out, among other things, that in trying to save about Rs 14 million per annum by expropriating Oil company assets and nationalizing the Oil Industry the Government was running the risk of enraging America thereby jeopardizing a Rs 140 million tea market to the US. I also pointed out that the oil companies were giving the consumers of the country a very good service through their competition and concentration on quality and service. All this would be lost when a Government monopoly took over.

Bernard read the article, blanched, and asked me to go across to Shell (they were on the first floor of the Chartered Bank building, and we were on the third) and show it to Blarney, the boss of Shell, the leader of the oil oligopoly with 60% of the market. As the article would be under Bernard’s name Harry was understandably nervous.

I walked across to Blarney’s office and showed him the article. He read it with close attention. At one point a smile stole across his face. Mrs B had gone to great pains to point out that it was not her intention to get rid of the Oil Companies from the local scene. All she wanted to do was to bring down the cost of imports by taking advantage of an attractive offer made by Russia.

She could not understand why we could not reduce the cost of our imports. She did not realize that the market in the entire Indian subcontinent would be affected if the price to Sri Lanka was reduced; and our imports were miniscule comapared to India’s and Pakistan’s who would all be compelled to fall in line. In the body of my article I had written “For Mrs B to say that it was not her intention to get rid of the oil companies but only to reduce the cost of oil imports is like cutting a ladder from under a man’s feet and claiming that the intention is not to bring him down but to collect some firewood!”

Blarney totally approved of the article (he must have been relieved that it was to be signed by Bernard and not himself) and urged me to walk 50 yards down the street to the office of Mason, the MD of Esso, and show it to him. I did so, and found to my delight that Mason was so thrilled with it that he provided me with an office and stationery, and insisted that I write an article for him too!

I did so, and thus it came about that both articles appeared on the centre page of the Ceylon Daily News (CDN) on Wednesday, Cabinet day. For information on what happened thereafter I am indebted to my cousin Percy Peiris, who was Cabinet Secretary at the time and told me the story some years after he had retired by which time the question of the confidentiality of cabinet discussions was no longer important.

Mrs B had stormed into the Cabinet Office waving the CDN in her hand. She had screamed at Ilangeratne “TB, what are you trying to do? Are you trying to bring our Government down? This whole plan of taking over the Caltex Terminal is Phillip’s idea (Phillip being her political enemy, Phillip Gunawardena, who was a dyed-in-the-wool Marxist). GVS de Silva and Sam Silva are his men. Get rid of them within a month. And stop the takeover of the Caltex plant.”

History will record that the gazette was canceled and Caltex was saved for the nonce. From this extraordinary experience I learnt a lesson that I never forgot. It is vital that when an injustice or wrong is threatened, good men must stand up and fight against it, as Burke pointed out in the 18th Century. Also, the one thing that Governments fear is the written word -particularly in their own newspaper!

There is a curious footnote to this affair. GVS who was one of the key thinkers behind the Nationalization visited me in my home down Maya Avenue during the early days when the Ceylon Petroleum Corporation (CPC) was being set up. He was a mild, innocuous looking, extremely clever individual who evidently had a high regard for his one-time classmate. He told me that the oil companies were doomed, and he offered me the top financial job at the CPC (when I was only a Deputy Chief Accountant at Caltex).

When I explained to him that I was by temperament a private-sector man who would never fit into the public sector he told me very earnestly, that in five years’ time there would be no private sector left in the country as every key industry would be in the hands of the Government. I remember telling him how much I appreciated his offer (I really did) but I would regretfully resign myself to my fate.

It was therefore ironic that as a direct result of my two articles he himself lost his job at the CPC. Fate works in strange ways. I wonder whether he ever realized that it was I who had written the articles that had cost him his job. No one in the private sector, and certainly none of my colleagues, were aware of it. I kept it a close secret as I had no desire to let down my Managing Director, Harry Bernard (under whose name my article was written) who was a charming man.

My next memorable experience at Caltex was after Government passed legislation to take over the assets of the oil companies. The thinkers behind the legislation drafted the law so that the companies would get very little compensation. They stipulated that compensation would be the purchase price of the assets less depreciation. They knew that the Terminal installations and service stations were well over ten years old and would have been written off in the books of account.

At Caltex I had been placed in charge of the compensation claim because the Chief Accountant, a charming Englishman called Geoffrey Gardiner was far more interested in producing plays at the Lionel Wendt (he was a producer and actor) than getting involved in the nitty-gritty of the Compensation Claim. A brilliant American called Jim Wollahan (California-Texas Oil Corporation) came down to Colombo, sized up the situation, and sat down with me to figure out our strategy.

Our first move was to visit our lawyers, Messrs Julius & Creasy, whose head was a very clever lawyer called Byrnell. Byrnell studied the relevant section together with us and told us regretfully that there was no way we could expect market value for our assets because the legislation was shrewdly drafted to prevent it. It would be “purchase price less depreciation” even though they had as a sop to international opinion added a proviso that “if purchase price was not determinable” it would be market value. They knew full well that oil company accounting would be so meticulous that every purchase would be correctly recorded.

Wollahan and I returned crestfallen and deeply disappointed to my office and thrashed the matter out from every angle. After a couple of hours of the most intensive devil’s advocacy on the part of both of us, Wollahan suddenly cried out “Chari, it will be market value!”. His point was that we did not know the purchase price of our installations and service stations. We had not purchased them from anyone. We had built them. It was a brilliant concept that was later confirmed as legally sound by H.V. Perera QC, the last word on law in Sri Lanka.

I was entrusted the task of writing the Memorandum on “Why Purchase Price was not determinable”. Once the basis of compensation became market value, we included Goodwill in our Claim because Market Value was the price that a willing buyer (say Phillips Petroleum) would pay a willing seller, and that would certainly include Goodwill.

I was put in charge of preparing our Compensation Claim (Gardiner was delighted to be relieved of that responsibility) and did so with the help of my able assistant Bertie Casie Chetty. It ended up literally with millions of dollars more than the leftists behind the legislation had ever anticipated.

This experience taught me one of the most valuable lessons of my life. Never since that day did I accept unquestioningly the opinion of a lawyer on a matter that had business or moral implications. I tended from that day onward to make all business decisions myself and use lawyers for their expertise to prepare the legal documentation. I had always had a legal bent, and from then onward gave it full reign. The culmination of this attitude was when I sued Aitken Spence & Co Ltd in 2007 (16 years after my retirement) on the grounds of Oppression. But that is another story. (I won that case; pp. 123 to 127).

During the compilation of the Compensation Claim, in 1962, Mike Thornton of Aitken Spence sent for me. This was the second time I was interviewed by Aitken Spence for a job. The first time was when R.P. Gaddum offered me the job of accountant shortly after I had passed out as a Chartered Accountant in 1955. Thornton offered me the job of Chief Accountant.

I told him that unfortunately I was heavily involved in the Compensation Claim for Caltex and could not let them down. We parted and he wrote me a charming letter. After this experience I got Bertie Casie Chetty to sign all the documents that would be used in the case.

Meanwhile Jim Wollahan, who had developed a huge regard for me, offered me employment as an expatriate. I declined it for a number of reasons. Firstly I had no great desire to live the life of a nomad abroad, traveling from one country to another. Secondly, I knew that it was quite likely that I would be posted to some Asian country like India or Malaysia. My colleagues in those countries, who would be as well qualified as I was, would be earning much less than I did (being an expatriate). In those circumstances it was unlikely that they would cooperate whole heartedly with me, or view me with great affection.

Around 1962 the government finally took over the assets of the oil companies. The employees were offered handsome severance packages and the staff at Caltex dwindled to a skeleton. At this point, I received my third offer to join Aitken Spence where Jack Reeves had taken over from Mike Thornton, and Ron Law the Chief Accountant had given notice of resignation. I evaluated the two choices before me: either become an expatriate with Caltex or the Chief Accountant of Aitken Spence.

I had already foreseen the problems I would be faced with as an expatriate. In any case three unsolicited offers from the same company within ten years seemed too much like Fate. I therefore accepted Aitken Spence’s offer after informing Harry Bernard and Geof Gardiner of my decision. They were sad about it but very understanding. They were also generous, because despite the fact that I was employed by Aitken Spence the day after I left Caltex they paid me the full Compensation Package!



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Religious extremism set to gain from rising Israel-Iran hostilities

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The costs of extremism; the Twin Tower blasts of 9/11.

Many of the international pronouncements on the current dangerously escalating Israel-Iran hostilities could be seen as lacking in adequate balance and comprehensiveness. The majority of these reactions could be said to be failing in addressing the aspects of the conflict that matter most.

For example, there is the recent UN General Assembly resolution on the crisis which calls for an ‘immediate, unconditional and lasting ceasefire in the Gaza’ and which goes on to urge ‘Member States to take necessary steps to ensure Israel complies with its international legal obligations.’ An immediate and durable ceasefire is indeed the number one requirement in the Middle East today but could it be ‘unconditional’? Could it ignore the principal requirement of Israel’s security? These posers need to be addressed as well.

Besides, it is not only Israel that should be compelled to meet its ‘international legal obligations.’ All the states and actors that feature in the conflict need to be alerted to their ‘international legal obligations’. While it goes without saying that Israel must meet its international legal obligations fully, the same goes for Iran and all other Middle Eastern countries that enjoy UN membership and who are currently at odds with Israel. For instance, Israel is a UN member state that enjoys equal sovereignty with other states within the UN fold. No such state could seek to ‘bomb Israel out of existence’ for example.

As a significant ‘aside’ it needs to be mentioned that we in Sri Lanka should consider it appropriate to speak the truth in these matters rather than dabble in what is ‘politically correct’. It has been seen as ‘politically correct’ for Sri Lankan governments in particular to take up the cause of only the Palestinians over the decades without considering the legitimate needs of the Israelis. However, a lasting solution to the Middle East imbroglio is impossible to arrive at without taking into account the legitimate requirements of both sides to the conflict.

The G7, meanwhile, is right in stating that ‘Israel has a right to defend itself’, besides ‘reiterating our support for the security of Israel’ but it urges only ‘a de-escalation’ of hostilities and does not call for a ceasefire, which is of prime importance.

It is only an enduring ceasefire that could lay the basis for a cessation of hostilities which could in turn pave the way for the provision of UN humanitarian assistance to the people of the Gaza uninterruptedly for the foreseeable future. There is no getting away from the need for a durable downing of arms which could engender the environment required for negotiations between the warring parties.

Meanwhile, some 22 Muslim majority countries have ‘warned that continued escalation threatens to ignite a broader regional conflict that could destabilize the Middle East’ and called ‘for a return to negotiations as the only solution regarding Iran’s nuclear program.’ This statement addresses some important issues in the crisis but one hopes that the pronouncement went on to call for negotiations that would take up the root causes for the conflict as well and pointed to ways that could address them. For instance, there is no getting away from the ‘Two State Solution’ that envisages peaceful coexistence between the principal warring parties.

The ‘Two State Solution’ has been discredited by sections of the world community but it outlines the most sensible solution to the conflict. As matters stand, the current escalating hostilities, if left unchecked, could not only lead to a wider regional war of attrition but bring about the annihilation of entire populations. There is no alternative to comprehensive negotiations that take on the issues head on.

Besides, all who matter in the current discourse on the crisis need to alert themselves to the dangers of appealing to the religious identities of communities and social groups. When such appeals are made religious passions are stirred, which in turn activate extremist religious outfits that operate outside the bounds of the law and prove difficult to rein-in. This was essentially how ‘9/11’ came about. Accordingly, speaking with a sense of responsibility proves crucial.

In fact, it could be argued that a continuation of the present hostilities would only benefit the above outfits with a destructive mindset. Therefore, comprehensive and constructive negotiations are of the first importance.

The above conditions should ideally be observed by both parties to the conflict. Israel, no less than the Islamic and Arab world, needs to adhere to them. Israeli Prime Minister Netanyahu has no choice but to say ‘No’ to extremists within his cabinet and to ‘show them the door’, inasmuch as hot-headed extremists in the Islamic and Arab world need to be opposed and alienated by the relevant governments.

Meanwhile, the US is on a duplicitous course in the Middle East. Whereas it has no choice but to rein-in Israel and convince it of the need to negotiate an end to the conflict, it is choosing to turn a blind eye to Israel’s military excesses and other irregularities that are blighting the Gazans and the ordinary people of Iran. It ought to be plain to the Trump administration that it is promoting a barbaric war of attrition by continuing to provide Israel with the most lethal weaponry. Currently, it is anybody’s guess as to what the US policy on the Middle East is.

The Islamic and Arab world, on the other hand, should come to understand the imperatives for a defusing of tensions in the region. Decades of conflict and war ought to have made it clear that the suffering of the populations concerned would not draw to a close minus a negotiated peace that ensures the wellbeing of all sections concerned.

As pointed out, the security of Israel needs to be guaranteed by those quarters opposing it. This will require the adoption of a conciliatory attitude towards Israel by state and non-state actors who have thus far been hostile towards it. There needs to be a steady build-up of goodwill on both sides of the divide. If this is fully realized by the Arab world a negotiated solution will be a realistic proposition in the Middle East.

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She deserves the crown

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We had no luck coming our way at the Miss World 2025 contest – not even our immediate neighbour, India – but I’m glad that Miss Thailand was crowned Miss World 2025 as Thailand happens to be my second home … been to Amazing Thailand many times, courtesy of the Tourism Authority of Thailand.

In fact, even before the Miss World 2025 grand finale, which was held at the beautiful venue of the HITEX Exhibition Centre, in Hyderabad, Telangana, India, my colleagues at office all predicted that Miss Thailand, Opal Suchata Chuangsri, would emerge as the winner.

Yes, indeed, Miss Thailand not only won the hearts of millions but also became the first ever Thai to claim this much sought-after title.

Prior to winning the title of Miss World 2025, Opal Suchata was Thailand’s representative at Miss Universe 2024 and took home the third runner-up title.

Her Miss Universe crown, unfortunately, was subsequently forfeited, due to a contract breach, but she did not let that demotivate her, though, and went on to compete and win the title of Miss World Thailand 2025.

Coming from a family that was in the hospitality industry, her upbringing, in this kind of environment, made her aware of her culture and helped her with her communication skills at a very young age. They say she is very fluent in Thai, English, and Chinese.

Obviously, her achievements at the Miss World 2025 contest is going to bring the 22-year-old beauty immense happiness but I couldn’t believe that this lovely girl, at 16, had surgery to remove a benign breast lump, and that made her launch the ‘Opal For Her’ campaign to promote breast health awareness and early detection of breast cancer, which also became the topic of her ‘Beauty with Purpose’ at the Miss World 2025 contest.

Opal Suchata intends to leverage her Miss World title to advocate for other women’s health issues, as well, and sponsor a number of charitable causes, specifically in women’s health.

Her victory, she says, is not just a personal achievement but a reflection of the dreams and aspirations of young girls around the world who want to be seen, heard, and create change.

What’s more, with interests in psychology and anthropology, Opal Suchata aspires to become an ambassador for Thailand, aiming to represent her country on international platforms and contribute to peace-building efforts.

She believes that regardless of age or title, everyone has a role to play in inspiring others and making a positive impact.

And, what’s more, beyond pageantry, Opal Suchata is an animal lover, caring for 16 cats and five dogs, making her a certified “fur mom.”

She also possesses a special musical ability—she can play the ukulele backwards.

Opal Suchata is already a star with many expressing admiration for her grace, leadership, and passion for making a difference in the world.

And there is also a possibility of this head-turner, from Thailand, entering the Bollywood film industry, after completing her reign as Miss World, as she has also expressed interest in this field.

She says she would love the opportunity and praised the Indian film indstry.

She akso shared her positive experience during her visit to India and her appreciation for the Telangana government.

Congratulations Opal Suchata Chuangsri from Amazing Thailand. You certainly deserve the title Miss World 2025.

What is important is that the Miss World event is among the four globally recognised beauty pageants … yes, the four major international beauty pageants for woment. The other three are Miss Universe, Miss Earth and Miss International.

Unfortunately, in our scene, you get beauty pageants popping up like mushrooms and, I would say, most of them are a waste of money and time for the participants.

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Wonders of Coconut Oil…

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This week I thought of working on some beauty tips, using coconut oil, which is freely available, and quite affordable, as well.

Let’s start with Coconut Oil as a Moisturiser…

First, make sure your skin is clean and dry before applying the coconut oil. This will allow the oil to penetrate the skin more effectively.

Next, take a small amount of coconut oil and warm it up in your hands by rubbing them together. This will help to melt the oil and make it easier to apply.

Gently massage the oil onto your face and body, focusing on dry areas or areas that need extra hydration.

Allow the oil to absorb into your skin for a few minutes before getting dressed.

Start with a small amount and add more if needed.

* Acne and Blemishes:

Apply a small amount to the affected area and gently massage it in. Leave it on overnight and rinse off in the morning. Remember to patch test before applying it to your entire face to ensure you don’t have any adverse reactions.

* Skin Irritations:

If you’re dealing with skin irritations, coconut oil may be just what you need to find relief. Coconut oil has natural anti-inflammatory properties that can help soothe and calm irritated skin.

Simply apply a thin layer of coconut oil to the affected area and gently massage it in. You can repeat this process as needed throughout the day to keep your skin calm and comfortable.

* Makeup Remover:

To use coconut oil as a makeup remover, simply apply a small amount onto a cotton pad or your fingertips and gently massage it onto your face, in circular motions. The oil will break down the makeup, including waterproof mascara and long-wearing foundation, making it easy to wipe away.

Not only does coconut oil remove makeup, but it also nourishes and hydrates the skin, leaving it feeling soft and smooth. Plus, its antibacterial properties can help prevent breakouts and soothe any existing skin irritations, so give coconut oil a try and experience its natural makeup removing abilities, and also say goodbye to acne and blemishes!

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