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CBSL made huge payments to Strauss Kahn’s tottering company
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The disclosure of how the Central Bank of Sri Lanka (CBSL) remitted US$ 250,000 (or Rs. 32,586,525) to former International Monetary Fund (IMF) chief Dominique Strauss Kahn’s company when it was going bankrupt has raised eyebrows in the corridors of power.
The remittance was made on September 10, 2014. It was then well known in financial circles that the Luxembourg-based firm was becoming insolvent. The remittance of more than Rs. 32 million, it has come to light, was made without the approval of the Cabinet of Ministers.
The financial services firm was headed by Strauss-Kahn and late financier Thierry Leyne. In November last year, just two months after the remittance had been made, the firm officially admitted that it had become insolvent.
A multitude of questions are now being raised. Among them: Why was the Central Bank that was monitoring financial markets, unaware it was paying a company that was collapsing financially? Were these payments part of a monthly remittance order? Who authorised it and for what purpose?
The insolvency of the company, decided upon by the Board of Directors, a statement said was after the discovery of “additional commitments within the group of which it was unaware and which aggravate the delicate financial situation.” This announcement coincided with the tragic death of Mr. Leyne.
This is how The Wall Street Journal (WSJ) reported on the matter on November 4 last year: “…… Luxembourg regulators were at LSK’s headquarters on Wednesday afternoon, according to a person who works at the firm. In the statement, LSK’s board said the new information ‘called into question the future of the company, whose credit is irreparably compromised.’ An LSK spokesman didn’t respond to a request for further comment.
“Last week, The Wall Street Journal reported that Mr. Leyne had been in a dispute with Swiss investment firm Insch Capital Management SA, which alleged Mr. Leyne’s company had made ‘totally unauthoried’ trades with its money.
In letters sent earlier this year to financial regulators in Luxembourg and Switzerland, Insch alleged that an LSK unit had used money in Insch’s bank account to buy shares in a Swiss insurance company that was majority-owned by LSK, without Insch’s knowledge.
“In emails reviewed by The Wall Street Journal, employees of LSK said Insch had instructed them to buy the shares. ”Insurer Bâloise Luxembourg, part of the Swiss insurance group Baloise Holding AG, also filed a complaint in the Luxembourg court against LSK over the failure to return a Euro two million portfolio that had been invested by an LSK unit, a spokesman said.
“Mr. Leyne was chief executive of LSK, which has been involved in businesses such as insurance and asset management. Mr. Strauss-Kahn — who stepped down from the IMF in 2011 after he was arrested on sexual-assault charges in New York, which later were dropped — joined LSK just over a year ago as chairman, although he recently left his role.
“Earlier this year, the firm announced plans to launch a global macro hedge fund and to raise $2 billion, and Mr. Leyne and Mr. Strauss-Kahn had spent time meeting potential investors in China. ”A spokeswoman for Mr. Strauss-Kahn didn’t respond to a request for comment.”
Top official as US envoy to Lanka
Atul Keshap, Deputy Assistant Secretary of State for South Asia in the State Department, is tipped to be the new United States Ambassador to Sri Lanka.
According to the State Department website, Keshap is “a career United States Foreign Service Officer from Virginia currently serving as Deputy Assistant Secretary of State for South Asia. In his current role, Keshap works closely with Assistant Secretary of State Nisha Biswal to co-ordinate U.S. Government policy toward India, Bangladesh, Sri Lanka, Nepal, Maldives, and Bhutan, comprising a diverse and strategic region of almost 1.5 billion people and over $2 trillion in economic output.
“Prior to his current assignment, Keshap was the United States Senior Official for Asia Pacific Economic Cooperation (APEC), a trade body whose members generate 55 percent of global GDP. In that capacity, he was responsible for U.S. policy initiatives during the Russia and Indonesia host years, and served concurrently as Assistant Secretary of State Kurt Campbell’s Coordinator for Economic Policy in the Bureau of East Asian and Pacific Affairs.”
More office space for CBK
If she failed as President during two consecutive six year terms, Chandrika Bandaranaike Kumaratunga wants to try her hand once more at reconciliation. Her impending role emerged when President Maithripala Sirisena directed that two floors of the Standard Chartered Bank building, overlooking the Janadipathi Mandiraya (President’s House) be reserved for her exclusive use. This floor area was occupied by the Presidential Secretariat staff.
Whether Ms. Kumaratunga would play the role of a negotiator or head only a Secretariat is not immediately clear. She is currently on an overseas visit.
Deportee was given diplomatic top slot
Besides Sri Lankan ambassadors and high commissioners who are political appointees, Foreign Minister Mangala Samaraweera has also ordered the recall of staffers appointed on political influence.
At least in one such case, the staffer concerned has written to the Ministry of Foreign Affairs through the head of mission saying that he wishes to remain in his post. The reason given by him is that one of his parents has met the new Government’s leaders in Sri Lanka and has already made an appeal to stay behind.
The man found a placement in the Sri Lanka mission when authorities in the home country decided to deport him. He had been refused a visa extension there.
However, as a means of allowing him to remain in that country’s capital, the man had been given a top slot by the previous Government. One of his tasks had been to accompany then Monitoring MP Sajin de Vass Gunawardena on travel to different cities together with others who accompanied the parliamentarian.
Bid to move millions out of a West Asian capital
The visit by a ‘young emissary’ to a West Asian capital is being closely watched by those dealing with financial matters.
This was after reports that he had been in that well-known capital to move out millions of dollars.
One wag says all that is happening in Mashriq or in the east of that West Asian capital.
The visit by a substitute emissary, a financial source said, was because the man tasked had been grounded.
CID probes attack on Malaka at Odel
Criminal Investigation Department (CID) detectives have begun investigations into the assault of former Minister Mervyn Silva’s son Malaka at the car park of Odel shopping complex in July 2013.
The move follows a complaint made by the Colombo District parliamentarian to the CID.Detectives have visited the Cinnamon Gardens Police Station to obtain entries and other records pertaining to the incident. It was this Police Station that conducted investigations into the incident.
How the two VAT racketeers were arrested in Malaysia
More often than not, political appointees to Sri Lanka’s diplomatic missions overseas are close relatives or friends of politicians and VIPs. Their posting has served them more than it has benefited Sri Lanka.
An exception is the posting of an Army officer who served as Deputy High Commissioner in the Malaysian capital of Kuala Lumpur — Major General Manawadu.
He had a house guest weeks earlier — a CID officer who had arrived there to arrest a suspect who was hiding in that capital. This suspect, who used two different passports, was evading arrest after allegedly robbing a jewellery store in Negombo.
During a chance conversation, the CID officer told Major General Manawadu that they were also on the lookout for two persons who were convicted in the VAT scam, one of Asia’s largest scandals.
The Deputy High Commissioner promptly got in touch with the Malaysian Police. There was an alert and the Police learnt that two men, convicted in the scam, were in Borneo. They waited and set an ambush when the duo returned. The two were arrested at 8 a.m. on February 4. Thereafter they were extradited to Colombo. The two had been hiding in Malaysia since 2007 and had made two billion rupees in the VAT scam. The amount well surpasses the vast number of money thefts for which Police have made arrests in recent years.
Unexpected visitor for Sirisena in Delhi
President Maithripala Sirisena had an unexpected visitor during his official visit to India last week.
It was Major General Shavendra Silva. The one time Deputy Permanent Representative to the UN is now at New Delhi’s National Defence College (NDC).
He turned up at the ITC Maurya Sheraton Hotel in New Delhi where Sirisena and his entourage were staying for a brief call.
Extravagant media bust-up for CHOGM
A reply to a question raised in Parliament on Friday revealed the extent to which public money had been squandered for the hosting of the Commonwealth Heads of Government Meeting (CHOGM) in 2013 . The Ministry of Mass Media and Information had spent a staggering Rs. 1, 177,434,333.46 (more than Rs. 1.17 billion) on “publicity and media coverage for CHOGM,” it was revealed by the new Media Minister Gayantha Karunatillake.
The construction and maintenance of the Media Centre which was located at the BMICH premises had cost over Rs. 828 million, publicity programmes in electronic media Rs. 180 million, public awareness programmes Rs. 144 million, entertainment for local and foreign journalists more than Rs 10 million and over Rs. 8 million for a category called “other” which does not say what the money was used for.
Many journalists who covered the event were shocked hearing the massive amount that had been spent for constructing the media Centre for CHOGM. The centre was inadequate to hold the large number of journalists who were officially accredited to cover the event while facilities were also basic.
The Minister said more details needed to be dug up about how such a large amount of money was spent on just media and publicity activities for the event and why there was no proper accounting of such a huge sum of money which had been obtained from the Treasury. He said that most receipts too were not properly filed by those who were in charge of spending the money.
The driver who became Presidential Transport Director
The Director of Transport in former President Mahinda Rajapaksa’s administration was arrested and later remanded after he allegedly failed to account for vehicles that have gone missing.
Detectives have now discovered that the man concerned did not have the qualifications to be a director. He was a driver from Medamulana, the former President’s home turf. The man had run private garages to which vehicles in the Presidential Secretariat were sent for repairs.