Columns

What came to the Foreign Ministry in a diplomatic bag from an Asian capital raised not only eye brows but also serious concerns.
An upcountry Province Governor and a so-called official delegation wanted to pay a four day visit to that bustling Asian capital which some call the sin city. The official delegation was to comprise family members, staff and relatives.

One would say there is nothing wrong in travelling abroad for they say it broadens one’s mind. However, here is a textbook case which highlights how some holding positions by appointment of the President would resort to devious means to surreptitiously use public funds.

Found in the diplomatic bag was the draft of a letter, which the head of the Sri Lanka mission in that Asian capital was expected to sign recommending that the Governor concerned and his staff be invited to visit that country. It had been sent to that capital by the Governor but the envoy refused to sign it.
The contents of the letter, written in bad English said the Governor needed to come to that Asian capital to promote trade deals for products made in the Governor’s province. The Governor was inviting himself or herself, as the case may be, but wanting the country’s ambassador to say it.

Later, telephone calls had also been made on the Governor’s behalf to the Sri Lanka mission to sign the letter and send it back quickly to the Foreign Ministry, the sources added. Their bags were packed and ready to go, but the formal invitation to justify the official trip on public funds was the delay.

The source said the idea behind the exercise was to turn a private visit, a holiday, into an official one. The Sri Lanka envoy declined to provide such a letter on the grounds that it would be a complete violation of the guidelines set out by the Foreign Ministry. According to the ministry, the envoy had said the furthest they could go was to extend courtesies on arrival and departure, the source revealed.

So, the Sri Lanka provincial delegation of the Governor and family and all went on holiday anyway last month. The official invitation was thus frustrated but the departure from Colombo and the return later were through the VIP Lounge. On arrival in the Asian country concerned, they were received at the VIP Lounge of the airport concerned. The send-off was also from there.

Interesting enough, the departure from Colombo came on a Friday. The delegation returned to Colombo on Monday evening. The intervening holidays made any meetings in the Asian capital impossible but that certainly was not a loss. There were no plans to talk business. They lived like regents in a hotel in the busiest downmarket shopping district. They were frequent visitors to the shopping stalls next to the hotel. Even a buth kade was within walking distance across the road. Who paid for the travel and other costs? Who else, but the taxpayer. So much for the Yahapalanaya principles.

President concerned over “Care of Cabinet Office” mail
The rising number of cases in the Supreme Court and the Court of Appeal –citing Cabinet Ministers as respondents — has caused concern for President Maithripala Sirisena.

From December 1, 2016 to June 30, this year he has noted that 28 cases are being heard in the Superior Court. Until recently, Sirisena said in a memorandum to his ministers that “in respect of cases where Cabinet Ministers have been cited as respondents were sent by the attorney-at-law for the petitioners to the respective official address of each minister, as indicated in the Website of this office.”

However, he has said that in the “past few months, adopting a different procedure, Notices intended to be delivered to all the Cabinet Ministers have been sent to the Cabinet Office in one parcel. This is because the attorneys-at-law for the petitioners had stated “Care of Cabinet Office.”

As a result, in a fundamental rights case which came up on April 6, this year the petition was delivered to the Office of the Cabinet of Ministers only the day before (April 5, 2017). In another instance, President Sirisena has pointed out, a notice in respect of a fundamental rights application was sent to the cabinet office on June 23 this year when the case had come up the day before (June 22, 2017). Mr. Sirisena has also listed a number of similar instances.

Consequently, ministers have now agreed that the President of the Bar Association of Sri Lanka be informed to instruct attorneys-at-law for the petitioners of the necessity to include the official addresses of the minister concerned in the captions of Affidavits and Petitions when tendering applications to the Supreme Court and the Court of Appeal. They have also agreed to inform the Registrars of the Supreme Court and the Court of Appeal to follow suit.

President goes to UN: Focus on a sustainable planet
President Maithripala Sirisena will leave for New York on September 17 to attend the 72nd sessions of United Nations General Assembly (UNGA).
The sessions will convene on September 12 and the General Debate will open on September 19 with a focus on the theme “Focusing on People: Striving For Peace And A Decent Life for All On A Sustainable Planet.”

Huge fraud allegations against Entrust Securities and related companies
A Central Bank investigation into Entrust Securities PLC (earlier known as Ceylinco Shriram Limited) has highlighted “unsound practices and financial irregularities” involving Government Securities to the tune of Rs 12.112 billion. This even involves related companies.

A report to the Cabinet Committee on Economic Management (CCEM) by the Central Bank notes that the “liquidity shortfall has arisen due to under allocation of securities to repurchase transactions entered into with some clients and outright clients, as well as non-receipt of collateral (securities) from reverse purchase facilities provided to its related parties – i.e. Entrust Ltd. (EL) and Continental Capital (Pvt.) Ltd. (CCL).”

The Repos (repurchase agreements) are financial contracts to sell Government Securities transactions with the agreement to buy back at an agreed later date. The rate of Repo investor is agreed similar to other interest rates.

However, Entrust Securities PLC, the Central Bank has said, had carried on repo transactions to borrow money from investors without allocating government securities to some investors. It said that the investors believed that Entrust has allocated Government Securities as the company was a Primary Dealer supervised by the Central Bank.

Both Entrust Securities PLC and Entrust Limited had, the Central Bank said, had also misappropriated funds and securities from Ceylon Electricity Board Provident Funds (Rs 2,312.27 million), Ceylon Electricity Board Funds (Rs 400 million), Hewagam Korale East Multi-Purpose Co-operative Society Ltd. (Rs 538 million) and three different individuals (Rs 310 milion).

Both the Criminal Investigation Department (CID) and the Financial Crimes Investigation Division (FCID) are conducting two separate investigations into different aspects. The Central Bank has said that “the funds raised were lent or misappropriated through Entrust Group companies, their Directors and related parties without any collateral. Some funds were misappropriated by Directors and senior officers and paid to many third parties.”

“As per transactions investigated as at March 30, 2016, the end-users or a large proportion (Rs 6.7 billion approximately) of ESP investor’s f’nds are Directors of Entrust Group of Companies and their related companies,” the Central Bank has said. The Central Bank report reveals that (Entrust Limited extended credit facilities of Rs 5.2 billion to its related companies and directors and made investment of a billion rupees in subsidiaries and Government securities using the funds from Entrust Securities PLC.”

The companies are: “Maruthi Estates (Pvt.) Ltd. Rs 1.2 billion and Continental Capital Ltd. Rs 363 million. According to the report, these two companies are controlled by Isira Dissanayake. A Director of the Company, Chanuka Upendra Ratwatte, the report added obtained Rs 100 million.