Special Assignment

Father, son and fan affair

By Frederica Jansz

It appears to be a case of all in the family. Customs are investigating an unofficial family-run NGO that is allegedly making big bucks under the guise of a charitable organisation.

Customs have launched a probe into an unofficial family-run Non-Governmental Organisation headed by a former politician. This was after it was found that a consignment of Chinese Electrical fans valued at Rs. 14, 419, 195 has been imported without any Bills of Exchange being negotiated, contrary to the Import & Export Control Act No 1 of 1969.

At the centre of the investigation is the Sri Lanka Association for International Understanding which is headed by S.D.Bandaranaike a former MP for Gampaha. His son Subhas Bandaranaike is the president of this NGO. The Bandaranaikes maintain there is no impropriety and this consignment of fans was imported to be sold locally. The funds they say were to be used to send Sri Lankan students on scholarships to China.

This NGO has imported goods reportedly to get finances for scholarships for Lankan students. However Customs investigations have found that procedures have been violated raising questions on whether this was a ruse to circumvent a long standing business practice.

In May 1998 this NGO imported from Hong Kong 338 21" TV sets. Customs investigations reveal that the entire consignment was undervalued. The Goods Declaration document at the time named the consignee as Ceylon International Trading Company (Pvt) Ltd, and stated the consignment held used TV sets with a few defects. 

Documents seized by Customs prove that the value of each TV was declared at some Rs. 4,000 but was sold at Rs. 17,000 per unit in the local market.In this instance Subhas Bandaranaike wrote to the Director General of Customs saying the TV sets had been sent from Hong Kong and would have to be repaired before being marketed locally. He says in the letter he will send H.K.S. Palitharatne to clear the consignment on behalf of the NGO. 

Later, in June 1998, Subhas Bandaranaike wrote to the Exchange Controller, saying this NGO which his father heads has got down through the China Internal Trade Corporation four containers of electric fans for which he would appreciate if a duty waiver could be arranged. He also states in the letter that his brother C.P.D. Bandaranaike, MP, for Gampaha district, is involved in organising scholarships for Sri Lankan students to be sent to China.

Despite claims by S.D. Bandaranaike that this NGO was approved by Parliament in 1983, it has been revealed that, Senaratne, Director General for Sri Lanka Customs had written to the Secretary General of Parliament, on September 15 last year, asking for clarification if the Sri Lanka Association for International Understanding, had been approved by Parliament as claimed by S.D. Bandaranaike. 

The Parliamentary Secretary General in his reply exactly one month later states, that the Sri Lanka Association for International Understanding was NOT approved by Parliament on June 14,1983. 

Documents collected by Customs reveal that the shipper for this consignment of electrical fans is one 'China Ningbo Cixi Imports and Exports Corporation,' China. 

Customs found that while the original consignee was H.K.S. Palitharatne, sole proprietor of M/s. Ishanee Trading Enterprises, subsequently the consignee's name has been changed to the "Sri Lanka Association for International Understanding". 

China Ningbo Cixi Imports & Exports Corporation in May last year wrote to S. D. Bandaranaike, saying that the company would be sending four containers of electric fans to the Sri Lanka Association for International Understanding from which sales the funds would be used to arrange for Sri Lankan scholars to be sent to China for studies.

Mr. Palitharatne, meanwhile, has admitted to customs that he imported this consignment on a consignment account basis. This means that Mr. Palitharatne intended to sell the goods locally and settle the funds to the Chinese counterpart who organised the shipment. Government officials say that this type of trading system is prohibited in Sri Lanka under the Import and Export control Act. 

After the arrival of the goods in question, the name of the consignee had been changed to Sri Lanka Association of International Understanding last year in May, after it was claimed, that the Original Bill of Lading was lost. 

Suspecting that this consignment was not meant as a donation, from which proceeds would help send Lankan students to China, Sri Lanka Customs on June 25 last year, searched the premises of Mr. Palitharatne, the original consignee at Ganemulla, and found some allegedly incriminating evidence.

There had been a verbal agreement between Mr. Palitharatne and the shipper. The shipper had agreed to ship a consignment of electric fans to Mr. Palitharatne in early May 1997. 

Accordingly, four container loads of fans were shipped to Mr. Palitharatne and the shipper had come to Sri Lanka along with papers and funds to clear the shipment through him but lost the opportunity of meeting due to the intervention of a third party into the scene.

The original papers had been collected by this third party, M/s Ceylon International Trading Co. Ltd, a BOI approved trading house fully owned by two Chinese nationals, who are involved in importing and marketing of Chinese products. 

Subash Bandaranaike had told Customs that on the request of Mr. Xujing, Director, Ceylon International Trading Co, plans were made to amend the consignee as 'Sangamaya' to get the consignment cleared duty free.

A raid of Ceylon International Trading Co. Ltd, at Shady Grove Avenue Borella, by Customs officials, found invoices and packing lists issued in favour of 'Sangamaya,' and blank invoices and packing lists authorised by the shipper, and correspondence with the shipper to amend the consignee. Customs maintain that in this search operation it was alleged that Subhas Bandaranaike had kept close connections with this company.

Subhas Bandaranaike has told Customs, that the name of the NGO had been changed to 'Sangamaya' with the purpose of releasing the consignment duty free. He says this was done as it was not possible to clear the consignment duty free in the name of Mr. Palitharatne, the first consignee. 

In a letter to the Director General Customs, on June 28, last year, Subhas Band-aranaike, says that the Association for International Understanding having close relations with all countries in the world, held an exhibition and sale of Chinese goods on December 2,1997 at the Sri Lanka Trade Centre Colombo. At the time of this exhibition, he says, the Ceylon Trading Company (Pvt) Ltd undertook to send a consignment of four containers of electric fans in the name of his secretary then working at No. 8, 16th Lane, Kollupitiya.

This consignment, he states was expected to be sold and the proceeds channelled towards establishing a Sri Lanka/China Solidarity Foundation where the Chinese language would be taught to students and exceptionally bright students sent on scholarships to China. 

He further states that this Solidarity Foundation Movement was under the able guidance of a leading prelate who was working in consultation with a cabinet minister.

Probing deeper, Ms. Y. Mortier who is an employee of the Sri Lanka Association for International Understanding said she was totally unaware of the real functions of this NGO. 

She told The Sunday Times, the functions of this organization were handled almost solely by S.D. Bandaranaike and his son SubhasBandaranaike. 

Meanwhile as the Customs continues to investigate this transaction it was found that this NGO had violated the Imports and Exchange Control Act, importing electrical items from China with no letter of credit or any other accepted terms of payments being initiated for such shipments. 

Customs allegethat subsequent evidence proves that this NGO also deliberately altered its name to "Sangamaya" for the sole purpose of importing items duty free.

Investigations also reveal that Subhas Bandaranaike is the self elected President for this 'Sangamaya.' There is no constitution or a register of members to this NGO. When asked by Customs to provide a bank guarantee, this NGO, they say was unable to do so. The 'Sangamaya' has never been registered under any government authority and the NGO functions only using a letter head. 

On two separate letter-heads of this NGO the name Bandaranaike is spelt differently while in two instances, in a letter to the Exchange Control and a letter to the Director General for Customs, Subhas Bandaranaike has signed as Bandaranaike in one instance and Bandaranayake in another. 

Despite the Secretary General of Parliament stating that this NGO was not approved by Parliament in June 1983, S. D. Bandaranaike insists that the Association for International Understanding was registered with the "Government of Sri Lanka," and approved by Parliament on June 14,1983.

He told The Sunday Times that the aims of the Association was to promote mutual understanding and friendship between Sri Lanka and other countries, safeguard world peace, prevent both conventional and nuclear wars and create a world where youth could reap the maximum benefits of human intellect.

S. D. Bandaranaike, refused to comment on the Customs investigation saying, only his son could do so. Asked where his son could be contacted he said, "I do not know. He is right now travelling around the country with delegates from China." 

He then went on to say that this NGO has foreign links primarily for world peace. Mr. Bandaranaike said at present the NGO is preparing to send a delegation abroad to study methods on how to achieve peace. He could not however name one single person apart from himself, who would be in this delegation, nor could he specify which country they would be travelling to. 

Pressed for further details on the functions of this charitable organization, Mr. Bandaranaike refused to elaborate and hung up. Repeated attempts to contact his son failed.

The letterhead of this NGO contains an impressive list of patrons, including members of the clergy. 

Taraki's Column

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