Court told that Cabinet was ‘misled’ in land case

Negotiations for the sale of land acquired by the Urban Development Authority (UDA) in Battaramulla and sold to a private company for the purpose of creating an 18-hole golf course were initiated long before the private company had obtained Board of Investment (BOI) status.

This was the submission made to the Supreme Court when a fundamental rights case came up for hearing last week. Court was also told that the Cabinet had been “hoodwinked and misled” in this matter by former President Chandrika Kumaratunga. The petition, filed by retired civil servants Sugathapala Medis of Panadura and Raja Melroy Blasius Senanayake of Karlsruhe Gardens, Colombo 10, cites, among the respondents, Ms. Kumaratunga, former Minister of Lands, the chairman of the Urban Development Authority, Asia Pacific Golf Courses Ltd, Ronnie Pieris, Sumal Perera, the Board of Investment Sri Lanka, Commissioner General of Inland Revenue, Shantha Elroy Godwin Wijesinghe and others.

In his submission to court, J. C. Weliamuna, attorney for the petitioners, said the transaction had been the subject of discussions before the relevant papers had been submitted to the Cabinet for approval. President Kumaratunga, who submitted a Cabinet memorandum to justify the project, was aware of the entire transaction, including the BOI application, which has yet to be produced in court.

Counsel Weliamuna said the persons named in the transaction as “investors”, including Japanese national J. Yanagihara, were in fact “facilitators” and not “investors”. According to the petition, the land was originally acquired by the government, during former President J. R. Jayewardene’s time, for a particular public purpose, which was to ensure water retention in case of flooding in the Battaramulla area.

Thereafter the state land was vested with the UDA with the specific condition that the land be used by the UDA solely for urban development purposes. The petitioners maintained that the original stated public purpose for the acquisition of the land was defeated when respondent Ms. Kumaratunga sought Cabinet approval for a proposal from Asia Pacific Golf Courses Ltd, the fourth respondent, to build an 18-hole golf course on the 136-acre piece of land. Counsel for the petitioners claimed that Cabinet had been misled in this matter.

He further said the original 136-acre piece of land was later expanded to 140.5 acres, and thereafter an additional 41 and 44 acres were added to the land extent. Interestingly, former minister M. H. Mohammed had permitted the sale of a portion of the land to third parties, resulting in the UDA signing an agreement to sell to Asia Pacific Golf Courses Ltd, chaired by Sumal Perera. In fact, in their objections, the petitioners have filed documents revealing that 18 blocks of lands had been sold to third parties.

Counsel Weliamuna further submitted that the private company had estimated the cost of constructing canals and systems to prevent flooding in the adjoining areas at Rs. 3 million, and that this amount was to be deducted from the Valuation Department’s estimate of the land’s value.

The petition also claimed that, under the transaction agreement for the 136-acre land sale, the private company had promised to build, in addition to the golf course, other public facilities, including a park, a football field, cricket grounds and a hawkers’ park; however, the private company had built only a private, members-only club.

Mr. Weliamuna pointed out that the government, the president and the UDA had decided to give the land, worth billions of rupees, either on concessionary terms or as free-hold to a company that had no tangible assets.

It was also pointed out that at the time respondent Sumal Perera came into the picture, in 2002, Asia Pacific Golf Courses’ only tangible asset was the leasehold land that is the subject of the ongoing court case. It was also revealed that the proceedings realised from the land sale were not reflected in the accounts of Asia Pacific Golf Courses Ltd.Mr. Weliamuna raised the issue of the role played by the so called “promoters”, who have since disappeared from the scene. Mr. Yangihara’s name does not appear even in the list of directors of Asia Pacific Golf Courses Ltd.

Counsel Weliamuna suggested that a business deal had been struck, but that the business relationship had later soured, and that Ms. Kumaratunga had then sought to cancel the land grant.

Mr. Mohan Pieris, PC, appearing on behalf of the BOI, asked court for more time in order to submit more documents relevant to the case. The application was allowed, and the case will resume on June 25, 2008. The bench comprised Chief Justice Sarath N. Silva, Justice Shiranee Thilakawardena and Justice P. A. Ratnayake.