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Ravi denies lying under oath but says he cannot remember most things
Former Finance Minister and current Foreign Affairs Minister Ravi Karunanayake, testifying before the Commission of Inquiry probing the Central Bank bond scams of 2015 and 2016, said he was totally ignorant of the transaction to lease out an apartment for his family from Arjun Aloysius who is implicated in the scam.
A confident Mr. Karunanayake coming out of the commmission premises to meet journalists.
Mr. Karunanayake was questioned about the relationship with the Aloysius family, his foreign visits coinciding with Mr. Aloysius’s travel, the purchase of the Monarch apartment in Kollupitiya and as to how the money was raised for the purchase. Additional Solicitor General Dappula de Livera alleged that Mr. Karunanayake was lying under oath, but the minister denied the charge.
The Commission comprises Supreme Court judges K.T. Chithrasiri, Prasanna Jayawardena and retired Deputy Auditor General K. Velupillai. Here are some of the questions and answers.
Dappula de Livera (DL): What kind of relationship did you have with Arjun Aloysius?
Minister Karunanayake (RK): Just a normal relationship. If anybody calls or if we associate as friends, we maintain that friendship. Just because we assume duties as a minister, we don’t forsake friends.
DL:What was the business of the company in which your wife and daughter became Directors soon after you assumed duties as a minister?
RK: International logistics. It was specially set up by Marks and Spencer to develop its global network. Sri Lanka was chosen as the first.
DL: Is Lakshmi Kanthan a foreigner?
RK: He is an Indian, permanently living in Britain.
Justice Jayawardena: He was born in India?
RK: Yes.
DL: Is this Lashmi Kanthan related to the famous Emil Kanthan?
Justice Jayawardena: No, no this is not necessary.
RK: Who is Emil Kanthan?
DL: (interrupting) He was a wanted terrorist.
RK: That’s news to me.
Justice Jayawardena: You don’t read news? I don’t know how you can function as Minister of Foreign Affairs.
The Commission and the ASG also questioned Mr. Karunanayake about his relationship with Arjun Aloysius and tried to establish that he maintained a cordial relationship during the bond issues. Some 8,600 pages of phone records extracted from Mr. Aloysius’s mobile phone were produced by the AG.
An SMS message sent by Mr. Aloysius to his Secretary, Steven Samuel was among the messages read out in open court. One of the messages is as follows, “Reminder: to request Hon. PM and RK to get a copy of the Monetary Board meeting papers, need to be submitted today 28/11/2016”
DL: Are you aware of this? Was there any request made to you by Mr. Aloysius?
RK: Not made to me.
DL: Do you realise your name has been quoted?
RK: No, I don’t know who RK is.
DL: It says Hon. PM and RK.
RK: Then why is there no Hon. for RK?
DL: You are known as RK, don’t people refer to you as RK?
RK: I don’t know what they refer to me as. Most people refer to me as Karu or Ravi
DL: So RK is not a reference to you?
RK: No.
DL: Are you saying this under oath?
RK: Yes, I know. I’m telling the absolute truth.
Another message from Mr. Aloysius to Mr. Samuel, sent on Jan 14, 2017 was read out and Minister Karunanayake was asked questions on it.
“Steve, please remind me to talk to RK on two matters when I meet him tomorrow. A PPP (public private partnership) and meeting with PM tomorrow with a US Treasury (official)” the SMS message read.
DL: Were you aware of this event?
RK: No, how do I know what the PM is doing?
DL: Do you have any idea of this content?
RK: No
Justice Jayawardena: Mr Karunanayake, once again this is a message sent by Mr. Alosyius, he is asking this individual named Mr. Samuel. I’m just reading this text, this is the first time I have seen this. It suggests that you were due to meet Mr Karunanayake tomorrow (Jan 15 2017). Whether you met him or not is a different matter. This is Arjun Alosiyus saying. The other is to remind him of meeting that Prime Minister had with the Treasury official of the United States of America? What connection does Mr. Alosyius have with the US Treasury? Do you know?
RK: I don’t know.
DL: You are clueless.
RK: Well, you are asking me questions about them. How do I know what they have been doing?
The Attorney General’s Department team handed in a copy of Minister Karunanayake’s foreign travels during the past two and half years to the commission and questioned whether he had met Mr. Aloysius in Singapore since both happened to be in that country on 13 occasions coinciding with Mr. Karunanayake’s trips.
DL: From June 9, 2015 to April 4, 2017, have you met him in Singapore?
RK: No. No. There was once a Finance Asia meeting that was sponsored by their company.
Justice Chitrasiri: Were you in Singapore during Christmas last year?
RK: Yes, we were in Singapore.
Justice Chithrasiri: At that time you did not meet Mr. Aloysius?
RK: I can’t remember.
DL: There was an occasion where you travelled on the same flight SQ469 on April 4, 2016. You remained in Singapore till April 8 while Mr. Aloysius was there till April 17. Did you meet Mr. Aloysius who travelled with you on the same flight?
RK: I can’t remember whether I travelled on that day but if you are saying I was there till April 8 and he was there till April 17, then it was his destiny.
DL: Do any of those trips ring a bell?
RK: It doesn’t ring a bell to me.
Justice Jayawardena: I just want to go back to this one message, I’m looking at a message sent by Mr. Neil. When you look at them, it is clear that Mr. Neil or his company has borrowings from the Bank of Ceylon. The company was in default and BoC was threatening to proceed with parate executions (a procedure special to banks, which allows the resale of property mortgaged to the bank). It is also apparent that Mr. Alosyius has put forwarded a proposal to purchase that property and they were seeking your influence with BoC perhaps to ask the bank to delay the recovery procedures. Do you know anything about this?
RK: Your Lordship, BoC does not come under my purview.
Justice Jayawardena: You don’t know the Chairman or had any influence?
RK: I only had BoC under my purview from January 8, 2015 till September 2015 when new government took office. During this time banks and insurance corporations were under my purview. I was the line minister for five to six months.
Justice Jayawardena: Also it is apparent to me from these messages that Mr. Aloysius was providing funds to the Sunday Leader and the newspaper was promoting you politically. Do you know anything about this?
RK: Well, it cannot be because its a hostile media, I don’t know what the promotion is.
DL: When did you come to know of this disputed bond sale where it was alleged the then Central Bank Governor and his son-in-law were involved when Mr. Aloysius’s company Perpetual Treasuries bid as the prime dealer on February 27, 2015?
RK: I can’t remember exactly when but certainly in Parliament when this matter was brought up.
Mr. de Livera questioned the authenticity of a new document presented by Minister Karunanayke’s lawyers. It was titled ‘AM22′. This was said to be issued by the minister after high level talks with senior cabinet ministers on the government’s financial security measures needed to be taken to stabilise economic condition.
The Commission was told that the said letter was issued by the Minister at the request of the Central Bank’s then Governor Arjun Mahendran.
DL: Why didn’t you date this letter?
RK: That is a complete oversight.
DL: There was an observation by the Commission that the letter was issued recently. It looks new. It is a crisp new letter.
RK: All I can say is that the letter was given during that period.
DL: I suggest that statement about the date is false in the light of the observations made by the Commission. The letter appeared new, it was uncrushed, untouched.
RK: It was only a reference to refresh the minds of the people present.
Justice Jayawardena: We will decide on the document
DL: Is it an official communication to Mr. Mahendran?
RK: It was issued on his request.
DL: Have you stated that? The normal practice is that if such a request is made, the identity of the person is revealed in the document. That is a known practice.
Justice Jayawardena: Do you admit that it was issued on the request of Mr. Mahendran?
RK: Yes
Justice Jayawardena: But you did not mention it in the letter
RK: Yes
DL: Did you file a copy?
RK: It would have been in the Treasury. I do not do the filing.
DL: As the Minister of Finance, did you call for a file and make a minute about this letter?
RK: I sign about 500 letters a day. I can’t remember, but normal procedures are followed.
DL: There is no file number. From where did this come ?
RK: It is from the Finance Ministry
Justice Jayawardena: Shall we move on to another matter. This letter has been written by Mr Karunanayake on the request of Mr Mahendran. We really want to know about the apartment.
DL: From where did you derive this information?
RK: Ministers Kabir Hashim and Malik Samarawikrema were there and this was a reflection of that meeting
DL: Mr Karunanayake do you know that the apartment you are living was owned by Miss Anika Wijesuriya
RK: I came to know that it was Nahil Wijesuriya’s daughter’s apartment, once this issue was blown out of proportion.
DL: Did you know she had two brothers?
RK: Yes.
DL: Miss Wijesuriya testified before the Commission that the apartment was for rent and you contacted her brother Vijitha.
RK: That is wrong, my family had spoken as I was travelling extensively. My daughter was a class mate of that group and they were mutual friends.
DL: Your wife initiated the call to Vijitha, is that correct?
RK: I do not know what my wife had done.
DL: Who made the inquiry?
RK: My family had spoken. The reason to shift was as there was a minor fire at my house near parliament.
DL: You have not spoken to Miss Wijesuriya?
RK: I had not spoken before we moved in.
DL: Had you visited this apartment, before you went into occupation
RK: No
DL: Were you not the chief occupant?
RK: No, my family
DL: As the head of the family you are the chief occupant
RK: No, I did not get involved, as I was busy, my family took this house
DL: meaning
RK: Exactly what I said.
DL: Your wife or daughter?
RK: My wife, daughter and family looked around. It is only 1,900 sq ft.
Justice Jayawardena: It is 4,000 sq ft
RK: That is wrong – you can look at it now
Justice Jayawardena: The previous witness who testified said that two apartments were amalgamated and it is around 4,000 sq ft
RK: I can assure that it has only three rooms and each room is around 700-800 sq ft. Three rooms cannot be 4,000 sq ft.
DL: It was a combination of two apartments. We have the lease agreement.
Justice Jayawardena: You are aware that the apartment was leased by Walt & Row
RK: Yes, aware of it subsequently
Justice Jayawardena: Subsequently it was purchased by Global Transport Logistics
RK: Yes it is a family company
DL: Your company purchased it
RK: It was decided because the renovation of the house took a long time
DL: Did you purchase it?
RK: I did not, my company did.
DL: If you look at the floor plan, there are two apartments your company has purchased?
RK: No there is something wrong. Because I tell you that we are in one room, there is a dining room, sitting room and two other rooms. Your Lordship can send anybody and check it out.
DL: Have you not seen the plan?
RK: I am seeing it for the first time.
DL: Did you see the Lease Agreement signed between Walt & Row and Miss Wijesuriya?
RK: I had no necessity to see it.
DL: Did your wife visit the apartment before you rented it?
RK: I was told that she did.
DL: She went there alone?
RK: I don’t know.
DL: Did she tell you that she met Mr. Aloysius in the premises?
RK: No.
DL: She did not tell you that Mr. Aloysius came to discuss matters with Miss Wijesuriya in the presence of your wife?
RK: No. All I know is that Miss Wijesuriya was the former girlfriend of Arjun Aloysius.
DL: Miss Wijesuriya said that when your wife visited, she called Mr. Aloysius and he visited the place.
RK: I don’t know that. I am only privy to what my family has told me.
DL: Are you aware of the existence of the company Walt & Row?
RK: No.
DL: Do you know that Mr. Aloysius and his father are Directors of this company?
RK: They are Directors of many companies. That’s all I know. I do not know who is owning what.
DL: You did not know that this apartment was leased by Walt & Row from Miss Wijesuriya?
RK: No. I need not know.
DL: You went into occupation thereafter?
RK: I am only one of the five members in the family. The family had liked it and selected it.
Justice Jayawardena: Did you not want to see the apartment you were going into?
RK: My family and I can decide on what is good for us. I am there only for 4-5 hours. We were working hard in the Ministry. I am not bothered about the transfer of a house. It was a family decision. I also do not know how this wrong version has come about the floor area. It is only about 2,000 sq ft.
DL: Do you know that Walt & Row company was paying Rs.1.45 million as lease rental a month for this apartment.
RK: After we moved in my wife told me that Miss Wijesuriya had told her that they did not want to rent out the apartment to politicians as they had bad experiences. My wife was disappointed and then the family had discussed it. For reasons best known, Miss Wijesuriya had insisted that the house be given to that person. The family had paid for it and the reimbursements made by the company.
DL: Your wife never negotiated the price for the lease agreement?
RK: My family are not millionaires, but certainly do not earn only Rs.10. Any questions can be asked, but there should be dignity. It is as if I am a beggar on the streets.
DL: When did you come to know that this lease agreement was Rs.1.45 million a month?
RK: When we shifted in. I cannot remember. My daughter runs a company, my wife is a Director, I am excluded. I have been working from 7 in the morning to about 10.30-11 in the night, the records in the ministry will prove that.
DL: Do you know the lease agreement was signed only for six months?
RK: Yes. The reason we left our residence was because of a fire and the renovation has taken longer than the six months we expected.
DL: Did you know that Walt & Row had paid Rs 11 million for the six month lease rental?
RK: That had no relevance. My family told me it was Miss Wijesuriya’s apartment. Subsequently they told me and produced the receipts saying it was paid to the Accountant of the company.
DL: Do you know the money was paid by Arjun Aloysius
RK: No
DL: Do you know this was negotiated by Arjun Aloysius under the name of Walt & Row
RK: I already said it was the family that discussed it.
DL: You happily stayed with the family for six months and thereafter extended the lease for two more months on an oral agreement?
RK: I do not know. I must say I live with the family happily. I do not like this type of insinuations, I do not live in two different houses.
DL: For that two months the refundable deposit was utilized
RK: No
DL: Thereafter GTL negotiated with Miss Wijesuriya to purchase that apartment
RK: After the completion of the six months, I was told by the family that we were told to leave. Six months more was requested for, but that was refused. As a result my family had come to a compromise and decided that the company will buy it. The company which we owned has an asset value of about Rs 4.5 billion. It is on 26 acres of land with one million square ft.
DL: Do you know that this company GTL negotiated to purchased this apartment?
RK: How do I know, I am not in the company.
DL: Did your wife tell you?
RK: No
DL: Did they tell you? I am asking a simple question.
RK: Subsequently they told me they brought it
DL: That was after
RK: There is no necessity to tell me, because they are running the company. Not I.
DL: There is a limit to lying
RK: I take offense on that, I am on oath, you are not on oath.
DL: Before this property was purchased there was a sales agreement, so you could not have brought it straight away. That is why I suggested that you are lying, because there was a sales agreement. There was an advance of Rs 16.5 million paid.
Justice: You cannot say he is lying, because throughout the evidence he says he did not purchase it
RK: I am a cabinet Minister testifying under oath here. This is not what is meant by the independence of the judiciary.
DL: Do you know that Miss Wijesuriya signed the lease agreement with the company?
RK: I am not a member of the company. I resigned from it and my family is able to run it.
DL: Do you know that GTL was paying Rs.165 million for this apartment?
RK: Why should I know about it
DL: As the husband of your wife
RK: It is an independent company. I have resigned from it.
DL: You came to know when Miss Wijesuriya testified
RK: I need not know. It is a company that runs on its own.
DL: You are telling this Commission on oath that you came to know that this apartment you are living in, which was bought at Rs165 million, was not within your knowledge?
RK: About a company which has assets of Rs4.5 billion, you need not be asking and telling everybody. There is a Chairman, CEO, Executive Directors and they run it. I have better things to do on behalf of the State.
DL: Who set up the nine companies?
RK: The owners
DL: Who?
RK: Obviously it was me at that time (before he resigned)
Justice Jayawardena: You are a minister of Finance and you have to be careful whom you deal with
RK: Yes I cannot deny that, But my family was dealing with it
Justice Jaywardena: You need to be careful about the place you live in.
RK: Yes I knew it was Miss Wijesuriya’s place
Justice Jayawardena: Nobody in this country will lease an apartment without a lease agreement
RK: They said that the apartment is owned by Nahil Wijesuriya’s daughter .
Justice Jayawardena: Therefore there should be a lease Agreement. Did you ask for that?
RK: No I did not ask for that. I thought the family was leasing it out. Subsequently I was told that she was not willing to give it to a politician and was willing to give it only to somebody else.
Justice Jayawardena: Are you asking us to believe that You lived in the apartment for nine months and did not know who leased the apartment
RK: Because the family said so
Justice Jayawardena: That is what you say. That is the explanation of the events. As the Minister of Finance You have dealings with the Central Bank.
RK: Yes.
Justice Jayawardena: You have dealings with the Colombo Stock Exchange?
RK: No.
Justice Jayawardena: Is not the CSE a matter of concern?
RK: The Finance Ministry did not have the Central Bank, the CSE, and the Exchange Control Department under its purview.
Justice Jayawardena: if You are aware that this apartment was being leased out by a member of the Perpetual Treasuries Group would you consider it relevant?
RK: Certainly, in the current context.
Justice Jayawardena: In that case, would you have not moved into that apartment?
RK: Yes
Justice Jayawardena:You said your family paid 11.5 million for the apartment
RK: No, Rs12.5 million.
Justice Jayawardena: Do you know that the payment was made by Walter & Row and Perpetual Capital?
RK: Absolutely not.
Justice Jayawardena: We have the cheques that prove the payments by them.
Justice Jayawardena: If such payments were made, do you agree that it was incorrect behaviour for a Minister of Finance?
RK: Not as the Finance Minister as I did not get involved in the lease.
Justice Jayawardena:You were enjoying the benefits
RK: The reimbursements were made.
Justice Jayawardena: From which company was the investment was made?
RK: From the family
Justice Jayawardena: From where did the money come?
RK: There is cash in the companies of my family
Justice Jayawardena: You will have account entries in those companies
RK: My daughter collected the money and paid it. We were mutual friends
Justice Jayawardena: There will be bank entries
RK: Not necessarily.
Justice Jayawardena: Are you saying your family had that amount in cash
RK: The family said they paid for it, I did not ask whether it was. I saw the receipts.
Justice Jayawardena: You claim ignorance, you stayed in the apartment, but did not ask as to who paid the money?
RK: There was an accusation in Parliament and it was only thereafter I came to know everything from the family.
Justice Jayawardena: You are aware that GTL decided to purchase it. We have gone through their balance sheet and seen they had operational profits. Over the years there were substantial borrowings, carried forward losses and sum of Rs 165 millon was a big decision to be made. But the Commission was told that it was purchased for foreigners, but no foreigners occupied the place
RK: It was mortgaged to the bank. One of the conditions was it will be rented out in future, but not until we were there due to renovations of our residence. The Chairman Mr Lakshmi Kanthan had said to go ahead and purchase. He stays with us when he comes. He had given the undertaking to pay.
Justice Jayawardena: According to Mr B.H.J. Sinnaiyah (Finance officer of GTL) Mr Kanthan carried cash amounting to Rs70 million on two occasions – Rs70 million and Rs75 million.
RK: He is a financial consultant and he earns a lot.
Justice Jayawardena: Are you asking us to believe that Lakshimi Kanthan was able to carry Rs 70 million in cash, elderly as he is, to come to your office and put it in a safe?
RK: Even if you take Rs 70 million it is just a brief case.
Justice Jayawardena:I have gone into the entries and see no entries about this transaction.
RK: Mr Kanthan pays the monthly fee and it is credited. This was told by the family.
Justice Jayawardena: Bringing large sums of money to the country ….
RK: He never does that.
Justice Jayawardena: Where did he generate this Rs 70 million in cash.
RK: I can’t answer that, You will have to ask him
Justice Jayawardena: You don’t know
RK: No
Justice Jayawardena: You were in the company until January 2015 (). You are well aware of the laws related to money laundering. When that amount of money is transacted there needs to be some documentation. Did you ensure that in this transaction.
RK: I don’t know this transaction.
Justice Jayawardena: Basically what you are telling us is you lived in this apartment for nine months, you were unaware that the lease agreement was entered into between Ms Wijesuriya and Walt & Row company, You are unaware about the payment by Perpetual and Walt & Row and how the GTL purchased this company.
DL: You were confronted in Parliament by Mahindananda Aluthgamage about this apartment on June 9, 2016. You were asked who was paying the rent of US dollars 10,000 a month. But you were unable to provide this explanation at that time.
RK: I challenged them and gave an answer.
DL: Your answer said if possible to prove the allegations and earnings were made not after taking up any position.
RK: Only then I came to know about the details of the transactions and Ms Wijesuriya did not want to give it to a politician.
DL: Ms Wijesuriya under oath said she had no problem in leasing this out to you.
RK: If we wanted to defraud why did we go through this process.
DL: You were living in a house paid for by a primary dealer in the bond market.
RK: That has no relevance I do not get involved
DL: You lived in an apartment paid for by Walt & Row controlled by Arjun Aloysius.
RK: I told you.
DL: You were accepting a gratification from a Primary Dealer.
RK: Absolutely no.