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Treasury bond scams: Judicial process further delayed, Mahendran safe in Singapore



‘Parliament’s response pathetic’

DEW’s 2015 COPE report never tabled

By Shamindra Ferdinando

Chairman of the Committee on Public Enterprises (COPE)   Charitha Herath said yesterday (4) that judicial process in respect of the treasury bond scams perpetrated in Feb 2015 and March 2016 had been delayed due to Sri Lanka’s inability to serve indictment on fugitive Central Bank Governor Singaporean passport holder Arjuna Mahendran.

SLPP National List MP Herath said so when The Island sought clarification with regard to the status of action taken by Parliament in that regard. Herath said that the report on treasury bond scams prepared by COPE during JVP MP Sunil Handunetti’s tenure as its Chairman was available. The data available therein were quite useful and could be utilized, the lawmaker said.

Responding to another query, one-time Media Ministry Secretary and University don Herath said that he wasn’t aware of the status of the Presidential Commission report on treasury bond scams that was handed over to Parliament.

The Island pointed out to the COPE Chairman that the report handed over in early 2018 hadn’t been debated so far though the parliament gave an assurance to that effect. MP Herath said that the Ministry of Defence, the police and the Attorney General’s Department had been involved in the process though it couldn’t be brought to a successful conclusion so far. Sri Lanka requested Singapore to deport Mahendran over a year ago. The request was made by the Defence Ministry in the second week of Sept 2019 in the run-up to the presidential election in Nov. Legal sources said that the then government took up the issue with Singapore consequent to the Permanent High Court at Bar where 10 persons, including the former Central Bank Governor, his son-in-law Arjuna Aloysius of Perpetual Treasuries Limited (PTL) and its CEO Kasun Palisena were charged with criminal misappropriation of public property. Sources said that Singapore had officially informed the government of Sri Lanka why Mahendran wouldn’t be handed over under the present circumstances. Mahendran is wanted for accepting Rs. 10.058 billion worth of bids at the 27 February 2015 auction, the first scam perpetrated within weeks after the 2015 presidential election. The then President Maithripala Sirisena replaced Mahendran with Dr. Indrajith Coormaswamy in July 2016. Former COPE Chairman Dew Gunasekera questioned the failure on the part of the Parliament to conduct a debate on the Presidential bond scam report received in January 2018. Gunasekera said that Parliament owed the country an explanation why a debate couldn’t be held for nearly three years.

Responding to The Island queries, Gunasekera said that in spite of the subject being listed in the Order Paper during the previous administration it was never taken up. The former Communist Party General Secretary pointed out that parliament should have properly taken up that issue even before receiving the treasury bond scam report. Gunasekera, who headed the 13-member special COPE subcommittee that investigated the first scam, said that he recently went through his 442 page report on the first treasury bond scam. Asked why he never submitted the report to Parliament five years after the investigation, the former Minister said that he couldn’t as the then President Sirisena dissolved parliament on the night of June 26, 2015, the day before he was to table it in the House. As the report couldn’t be presented before the dissolution, it couldn’t be tabled at all, former National List MP Gunasekera said.

“Such a valuable document never received parliamentary recognition,” the veteran leftist politician said. The CPSL General Secretary was not accommodated on the UPFA National List following the 2015 general election. Gunasekera recalled how when he questioned Mahendran in respect of the first treasury bond scam, the CBSL Governor revealed receiving instructions from Premier Wickremesinghe who held policy planning and economic affairs portfolios. Mahendran’s revelation included in the COPE report is significant as by January 18, 2015, the CBSL had been brought under Wickremesinghe, the former Minister said. Gunasekera emphasized that the CBSL shouldn’t have been removed from the Finance Ministry purview, a controversial move that was meant to effectively thwart possible intervention by President Sirisena. Gunasekera urged the Parliament to address the issue at hand.

The former minister pointed out that the treasury bond scams contributed heavily to the UNP’s crushing defeat at the last parliamentary election. Of the four UNPers summoned by the Presidential Commission, Wickremesinghe and Ravi Karunanayake suffered defeat at the last general, Malik Samarawickrema quit parliamentary politics whereas Kabir Hashim switched allegiance to the Samagi Jana Balavegaya (SJB). “Those responsible for the first scam brazenly manipulated Parliament. Imagine, they got Parliament dissolved and perpetrated the second far bigger fraud in late March 2016.

 Investigations revealed how PTL provided funds to some lawmakers though all names were never revealed.” the former minister said. Alleging that the establishment failed to properly handle the treasury bond scams, Gunasekera said, adding that the overall failure to investigate Sri Lanka’s worst post-independence financial fraud exposed the limitations in the system. However, successful system manipulation couldn’t save the UNP from its worst defeat that brought the once great party to its knees, Gunasekera said, pointing out the reduction of parliamentary strength from 106 seats to one NL slot, destroyed the UNP. 



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MCC inconsistent with Constitution



AG agrees with Prof. Gunaruwan report

By Shamindra Ferdinando

Attorney General Dappula de Livera, PC, has informed President Gotabaya Rajapaksa that the Millennium Challenge Corporation (MCC) Compact, Project Implementation Agreement, as well as Articles of Association of MCA (Millennium Challenge Act), Sri Lanka, are violative of cerain provisions of the Constitution.

The AG has said so in a 20-page report sent to Dr. P.B. Jayasundera, Secretary to the President.

The President’s Office on Sept. 3, 2020, sought the AG’s opinion on the MCC Compact and related matters in the wake of the Cabinet-appointed Prof. Gunaruwan Committee strongly advising against going ahead with the US initiative. The US sought Sri Lanka’s consent for the Acquisition and Cross Servicing Agreement (ACSA), Status of Forces Agreement (SOFA) and MCC. The previous government finalised ACSA in early August 2017.

Dr. Jayasundera made available the Gunaruwan report to the AG.

The outgoing US administration in Dec 2020 announced Sri Lanka had been left out of the MCC project.

AG’s Coordinating Officer State Counsel Nishara Jayaratne confirmed the MCC et al were inconsistent with the Constitution and other laws.

The Island,

 however, learns that the AG’s Department on two previous occasions, in letters dated Oct 10, 2018 and June 10, 2019, addressed to Jonathan G. Nash, Chief Operating Officer, MCC, and Director General, External Resources Department, respectively, asserted that the Compact and the Programme Implementation Agreement (PIA) were in line with the Sri Lankan law.

The first letter was sent during Jayantha Jayasuriya’s tenure as the AG and the second under incumbent AG without his approval, sources said. Dappula de Livera succeeded Jayasuriya in April 2019 about a week after the April 21 Easter Sunday carnage. Jayasuriya is the incumbent Chief Justice.

Prof. Gunaruwan’s Committee soon after the last presidential election in Nov 2019 failed to obtain the AG’s Department opinion in spite of making representations through the Prime Minister’s Office.

In the run-up to 2019 parliamentary election, then Finance Minister Mangala Samaraweera said the Attorney General had approved the US project though the Sri Lanka Podujana Peramuna (SLPP) called it a sell-out.

The following is the text of the letter dated Oct 10, 2018 captioned ‘Legal Status of Proposed MCC Compact signed by Sanjay Rajaratnam, PC, Senior Additional Solicitor General, addressed to Jonathan G. Nash, Chief Operating Officer, MCC:

“I refer to your communication dated 27th September, 2018 in respect of the above captioned matter. In this regard, I am made to understand that the delegation from the Government of Sri Lanka was able to have fruitful discussion with the Millennium Challenge Corporation Team in resolving some of the outstanding issues.

“Having gleaned through the proposed Millennium Challenge Compact, the draft Program Implementation Agreement (PIA) as well as the Points of Discussion (without prejudice) between the negotiating parties which has been made available to me, I wish to at the very outset opine that no existing laws of Sri Lanka inhibit the Compact and the PIA being implemented in Sri Lanka. If I may elucidate further, the covenants of the Compact and the PIA do not infringe any existing domestic law or any previous undertakings given by the Government of Sri Lanka. It is acknowledged that the Compact imposes legal obligations on both parties to the Agreement

“Further, consequent to the negotiations and discussions had between parties, it is proposed that the Government of Sri Lanka would seek the passage of a law in Parliament to establish the MCA- Sri Lanka as a non-profit Company limited by guarantee under the Companies Act No.07 of 2007 to implement the provisions of the Compact. It is envisaged that the proposed enactment would encompass the Compact and the PIA as Annexures, which would form an integral part of this enactment.

“Thus, I am of the view that the passage of the said enactment by Parliament would result in the Compact and the PIA, having the parity of status of a domestic law in Sri Lanka.

“In the Context of the above, it is requisite that Section 7.1 of Article 7 of the Compact referring to the provisions on Entry Into Force, would be revised with the deletion of the sentence pertaining to the Compact prevailing over the domestic laws of Sri Lanka.

“However, in order to assuage any concerns with regard to the implementation of the Compact, by an unlikely event of a legislation in the future which may impinge or infringe the said compact, upon notification by the Ministry of Finance and Mass Media (the relevant Ministry) of this fact, a legal opinion would be tendered that the proposed legislation if proceeded with would violate the covenants of the Compact. This would enable the relevant Ministry to forward its observations to the Cabinet of Ministers and Parliament, that the Attorney-General has opined that the proposed Bill if enacted would violate the Compact.

“In the circumstances, I believe that the aforementioned matters would confirm the legal status of the Compact and its entry into force.”

“Copies were sent to Ms. Caroline Nguyen, Managing Director- Europe, Asia Pacific and Latin America Millennium Challenge Corporation and J. Charitha Ratwatte, Head of Policy Development and Chief of Party MCC- Sri Lanka Project.”

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Environmentalist accuses Govt. of resorting to trickery to hand over 800,000 acres to pvt. companies



By Rathindra Kuruwita

President Gotabaya Rajapaksa’s ‘Gama Samaga Pilisandara’ is a psychological operation to counter people’s resistance to a move to hand over chena and grasslands to large companies, environmentalist Sajeewa Chamikara said yesterday.

Chamikara claimed that the government had earmarked 800,000 acres of land to be given to corporations, and those lands would mainly consist of forests and areas used for chena cultivations and to feed cattle by small scale farmers.

“The Gama Samaga Pilisandara is an attempt to misguide the people by giving them false promises. The government tells people they could cultivate lands belonging to the Forest Conservation Department and instructs officials not to punish people who send cattle into forests. People walk away feeling good but a few months later they will find that these same lands handed over to big companies.”

They had conducted a survey on the lands that had been given to corporations by the government during 2020 Most of those lands in fact were those used by cattle herders and chena cultivators, he said.

For example 70,000 acres in Demaliya and Wandama were being given to a company engaged in sugarcane cultivation, and almost all those lands were those used by small scale farmers and cattle herders, Chamikara said. Among the lands that were given were those earmarked for those displaced by the Uma Oya project. The previous administrations tried to provide irrigation water to those lands through the Handapanagala scheme.

Chamikara said: “Another 62,000 acres have been earmarked in Moneragala, Ampara and Badulla districts for sugarcane cultivation. 80% of these lands are chena cultivations. In Rambaken Oya 5,426 acres have been earmarked for 15 companies to carry out various agro projects and most of these lands are now used by small scale cattle herders. Recently, the Department of Agriculture wrote to the Forest Conservation Department requesting that 80,000 acres in Moneragala, Anuradhapura and Badulla districts be released. These lands are to be used for corn cultivation. The Forest Conservation Department then asked the Department of Agriculture to identify the lands and we know that these lands for the most part are those used by small scale cattle herders and chena cultivators.”

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Contempt of Court case against GMOA President re-fixed for hearing on March 03 and 10



By Chitra Weerarathne

The Court of Appeal yesterday re-fixed for hearing on March 3 and March 10, the Contempt of Court application against the President of the Government Medical Officers’ Association Dr. Anuruddha Padeniya.

Counsel Ravindranath Dabare said that his client Dr. Padeniya was under self-quarantine and was unable to attend Court.

Dr. Padeniya was summoned for Contempt of Court under Article 105/3 of the Constitution of Sri Lanka for allegedly having criticised a Superior Court ruling in respect of the admission of students to the Sri Lanka Institute of Technology and Medicine, Malabe, at a public rally on April 7, 2016, disrespecting a Supreme Court order pertaining to the enrolment of a student in the Private Medical College, which will ultimately lead to an MBBS degree.

The Court of Appeal bench comprised Justice Arjuna Obeysekera (President) and Dr. Mayadunne Corea.

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