The Automobile Association of Ceylon (AA), the premier motoring body in the country has moved to defend a decision by the organisation's hierarchy to purchase a block of land co-owned by the wife of the president of the association for a holiday bungalow, in the Nuwara Eliya area, following a challenge by a former president who has now been suspended.
The Association's president Shanthi Gunaratne has circulated a news letter to all its members explaining its position regarding the controversy arising from the purchase of the land and the proposed building project.
The issue is expected to be taken up at the next annual general meeting scheduled in July.
The move comes after a former president of the AA, Rajah Sinnathuray accused Mr. Gunaratne of being instrumental in purchasing a 41-perch land in Nuwara Eliya for a holiday bungalow at an inflated price.
Mr. Sinnathuray claims the AA paid Rs. 400,000 for a perch, when the property in question is worth only about Rs. 250,000 a perch.
He also accused Mr. Guneratne of purchasing a land of which his wife was a co-owner. He said that Mr. Gunaratne had withdrawn a sum of Rs. 19 million from an AA fixed deposit to buy the land, but the total value of the land was only Rs.16.4 million and as a result of withdrawing the money from the fixed deposit the Association was losing a monthly interest of Rs. 300,000.
"The plan was to build the holiday home with the balance money. However, the balance money has been set aside to build a fence or boundary wall round the property", Mr. Sinnathurai said.
Mr Gunaratne denying the allegations told The Sunday Times that the land purchase had been discussed at a meeting of the sub-committee appointed for this purpose, and that the details of the discussion were on record.
He said that the money was withdrawn from the bank with the consent of the membership and the money was from a short term deposit which had matured. He said the remaining Rs. 2.6 million was reinvested.
He said though the Association was losing money in the form of interest it had gained a long term asset by purchasing land.
"At first I refused to allow the land to be bought as my wife was a shareholder of the property. However the committee insisted on buying it stating that it was a good investment opportunity and I had to agree with them. Approval of the whole executive committee was obtained before we went ahead with the deal. It was unanimously approved by the sub-committee," he said.
Mr. Gunaratne said the land was surveyed and valued before purchase. "The land was revalued by a competent commercial valuer and it was valued at Rs.550,000 a perch whereas the AA purchased it at Rs. 400,000 a perch" he alluded.
In the meantime, Mr. Sinnathuray’s AA membership has been suspended.
Mr. Gunaratne refuted the allegation that the one-time President of the AA had been suspended for raising these issues, saying that Mr. Sinnathuray was suspended on disciplinary grounds and that proper procedures in accordance with the constitution had been followed. He declined to elaborate. |
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