Treasury Secretary P.B. Jayasundera, under fire over his role in the controversial privatization of Lanka Marine Services Ltd (LMSL) which was condemned by the Supreme Court and severe strictures passed on him, offered to resign soon after the court verdict but was urged by the Government to stay on, The Sunday Times reliably understands.
"He offered to resign but was persuaded by higher-ups to stay on," one source said.
Dr. Jayasundera and current John Keells Holdings (JKH) Chairman Susantha Ratnayake came in for bitter criticism in the judgment on Monday delivered by Chief Justice Sarath N. Silva with two other judges agreeing on the LMSL privatization which was contested through a fundamental rights petition by Presidential Advisor Vasudeva Nanayakkara, acting as a citizen and on behalf of the Sri Lankan public.
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| Dr. Jayasundera |
Mr Nanayakkara wanted the agreement annulled and all the rights and privileges removed from LMSL which is majority-owned by JKH. In a severe condemnation of the Treasury Secretary (who was chairman of the Public Enterprise Reforms Commission-PERC at the time), the court at one point said "steps taken by Jayasundera and PERC towards effecting a sale of LMSL is not in any way mandated by the decision of the Cabinet of Ministers and is manifestly contrary to the process that had been authorized. The procedure adopted is also contrary to the Public Administration Circular issued by Jayasundera himself."
Pressure is mounting on the Government to remove the Treasury Secretary, who though seen as 'arrogant but brilliant' has been blamed for many of the economic woes of the regimes of two Presidents - Chandrika Kumaratunga and Mahinda Rajapaksa.
By Friday, cracks were showing in the Government with divided opinion over Dr Jayasundera's fate. The sources who spoke to The Sunday Times said some sections including Cabinet ministers wanted him out while others said he should be defended. The issue of this being a 'privatization' during the United National Party government under President Chandrika Kumaratunga was also being raised. In Parliament this week, Fisheries Minister Felix Perera offered to pay the Rs. 500,000 compensation saying it was unfair to criticise public servants in Parliament where they cannot defend themselves.
Dr Jayasundera was unavailable for contact.
JKH and its chairman Susantha Ratnayake, who was a senior director at the time of the transaction, also came under pressure from shareholders and other stakeholders - some calling for his removal from the board in the name of good, corporate governance. Mr Ratnayake told The Sunday Times that he has called a board meeting to discuss the court judgement but beyond that declined to comment. "I cannot comment beyond what the company statement said last week after the judgement," he said. A day after the verdict - which virtually overturned the privatization except for allowing JKH to retain the 90 percent shares of LMSL --, the company issued a statement listing out some of the key points in the judgement and said a further communication will follow. The Supreme Court also severely criticized Mr Ratnayake, who had acted in collusion with Dr. Jayasundera in working against the public interest to secure illegal advantages for JKH.
Public watchdog-lawyer J.C. Weliamuna, also Transparency International Sri Lanka Executive Director, says that while local procedures are a bit unclear for action against the Treasury Secretary as he serves as the chief disciplinary officer in the Ministry, according to international conventions such officers either step down or are removed.
He said that Secretaries to Ministries are appointed by the President under Article 52 of the Constitution while there is no procedure for removal. However there are other Ordinances that provide some provisions on the removal process.
Some other senior, serving and retired public servants who spoke to The Sunday Times also said there didn't appear to be any clear definition in government regulations on what action is set out when a public officer at this level is found guilty of fraud or deceit. Some retired officials said Dr Jayasundera may not the only guilty party as his action and decisions as the then Chairman of PERC must have been endorsed by a higher official.
The court in fact said this: "A TEC (Technical Evaluation Committee) was appointed by C. (Charitha) Ratwatte entirely on the recommendation of Dr Jayasundera. A characteristic feature of the entire process is that Ratwatte has signed and approved every paper that had been put to him by Jayasundera, promptly, and without any question being raised." Mr Ratwatte was an appointee of then Prime Minister Ranil Wickremasinghe.
Serving senior public officials said there have been cases in the past where officers have been fined by court and the department or institution concerned has paid the fine in the case of an action that came as an order from a higher officer. In some cases, courts have directly held the officer responsible for a decision and in such cases, the officer has had to pay the fine.
A former public servant and attorney at law said that according to Article 52 of the Constitution, the person who appoints the Secretary is also the person who can dismiss the Secretary. He also ventured to guess that he found it unlikely that the President would dismiss Dr. Jayasundera, despite the blatant illegality of his actions detailed in the court judgment.
The Court declared that the privatisation of LMSL was illegal, unlawful and arbitrary. It ordered Dr Jayasundera to pay compensation of Rs 500,000 while directors of JKH were asked to pay Rs 250,000 as costs. Court also ordered that the land on which the bunkering facilities lie should be returned to the state and that all taxes - since LMSL got tax-free status - should be paid from the date of privatization onwards.
Political and business analysts said the public was also keenly awaiting Supreme Court judgements in the cases against the privatization of Sri Lanka Insurance and the sale of Waters Edge land, both of which are seen going in favour of the protestor-petitioners.
(Readers could view the full judgement in this case on our webside - www.sundaytimes.lk) |
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