Financial Times

Lessons for public officials

That is how Justice Saleem Marsoof of the Supreme Court described the recent judgment in the Lanka Marine Services Ltd (LMSL) privatisation case. Although not directly naming Treasury Secretary Dr. P.B. Jayasundera, the judge – during a memorial oration in Colombo for former Attorney General, the late K.C. Kamalasabayson -- said the ‘public officer who was found to be responsible for the loss to the State and whose actions were held to be arbitrary and ultra vires in the recent Supreme Court judgment on the LMSL privatization will no doubt be an eye-opener not only to errant public officers but all members of the public service in general.

He said the failure on the part of an increasingly number of public officers to adhere to the principles of good governance has resulted in unfortunate decisions such as the LMSL judgment. His comments came as the government slowly, and probably unwillingly, moved to react to the Supreme Court’s scathing criticism of Jayasundera in his role in the irregular privatisation of LMSL. Yet the action – more than a month after the July 21 judgment – is not directly linked to the Jayasundera issue. Rather it was taking up another issue raised by Ministry Secretaries and senior officials, after the court verdict, about being victimised and endangering their pensions rights if they refuse politically-motivated decisions by higher officials and ministers which cannot be permitted under normal rules and obligations.

The new committee, comprising three formidable retired secretaries, will look into issues referred by the president based on allegations against Secretaries in the conduct of their official functions. The committee can only review and recommend after inquiry and it’s upto to the President to take action.

However the President’s move appears to absolve Jayasundera whose offer to resign was not accepted by the government. Instead the Treasury Secretary was included in the Presidential delegation for the SAARC Summit and also accompanied the President to Beijing for the Olympic Games. Furthermore the disgraced officer is heavily involved in the budget-making process ahead of the November budget presentation.

Even at this late stage, the government should take note of the comments made by Justice Marsoof and decide on some action against Jayasundera. Otherwise Jayasundera goes scott free after clearly being slated by the court for causing a major loss to the state while on the other side, John Keells Holdings (JKH) and its directors continue as if nothing has happened to the organisation after the LMSL judgment.

Concern is also being raised over LMSL’s negotiations with the Sri Lanka Ports Authority to get a slice of the bunkering business under new terms. “ Isn’t there a moral and ethics issue here ? LMSL has been found guilty of cheating in this business and now they go back to a government agency to do the same business. Ultimately, except for losing a couple of millions of rupees (which they will recover), there is no penalty or punishment for the ‘crime’ committed,” a stockmarket analyst has said, according to a report in this newspaper. “Neither is anyone stepping down at JKH (on moral grounds) to at least accept the verdict from the highest court of the land, that the company has wronged the people of this land,” he has added.

JKH, normally first off the blocks in releasing their quarterly results (to June 2008), hadn’t released the results until the August end deadline approached last Friday. In a fuller statement on the course of action the company will take in future, group chairman Susantha Ratnayake said “I wish to assure our stakeholders that in keeping with the traditions, reputation and track record of transparency and ethical standards that JKH has demonstrated over the years, we will be resolute in the pursuit of our strategic direction.”

The most intriguing question in the light of this statement is the comment on ‘… keeping with the traditions, reputation and track record of transparency and ethical standards…’? Is this the kind of ethics and transparency John Keells practised in the LMSL privatisation – which the company says it will continue to follow -- and which was slammed by the Supreme Court?

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