Rs. 1.3 billion fine slammed on Tawakkal

Multi-million rupee cement deal controversy ends

The controversial Tawakkal saga which led to a political storm over the privatisation of the Puttalam Cement Company Ltd. was brought to an end this week with an unprecedented award of Rs. 1355 million, the highest award made by a Sri Lankan court.

The case was concluded before Commercial High Court Judge P.Wijeratne after the stockbrokers carried out the transaction to sell the shares of Tawakkal company according to the judgement and informed courts about the transfer of the proceeds to the plaintiff — the Puttalam Cement Company.

Puttalam Cement had filed action against Tawakkal in October 1997 for the alleged wrongful and illegal transaction on the issue of debentures to pay Rs. 900 million for the privatization deal. The Rs. 900 m. was part of the payment for the bid to purchase the company.

The Tawakkal group of Pakistan entered into an agreement with the Sri Lankan government to purchase 90 per cent of shares of Puttalam Cement in 1993. According to the agreement all shares of Puttalam Cement were vested in the Treasury and the Secretary to the Treasury appointed a Board of Directors to Puttalam Cement, including the Chairman of Tawakkal.

The appointed Board of Directors making the capital of Puttalam Cement into 1000 million shares of Rs. 10 each and taking steps to issue Rs. 300 million convertible unsecured debentures and Rs. 600 million redeemable secured debentures of the Tawakkal, made it possible for Puttalam Cement to obtain Rs. 900 million which was made use of to pay a part of the money Tawakkal was liable to pay the Sri Lankan government.

Accordingly, these obligations caused Puttalam Cement to be obligated in Rs. 900 million and Tawakkal used the money to settle a part of the purchase price payable on 90 per cent of the shares in Puttalam Cement.

The court held that it was proved that Tawakkal which purchased 90 per cent of the shares of Puttalam Cement had unjustly enriched itself with Rs. 900 million whilst Puttalam Cement had to pay Rs. 455.2 million as interest on the debentures. Accordingly, a total loss of Rs. 1355m. had been caused by the sale of debentures and in the way of interest. The summons in this case was served on Tawakkal Group, but they went unrepresented in courts and accordingly an ex-prate trial was held. The Judge, taking into account evidence, including that of the Analysis Officer of the Public Enterprises Reform Commission, R.B.K. Hewawasam who confirmed the transaction, held that position of Puttalam Cement was proved.

"Accordingly when considering the position as stated by the Plaintiff it is clear that, having agreed to purchase the Plaintiff Company , the Defendant Company through this course of action, whilst enjoying all the relief given by the government had them appointed by the Secretary to the Treasury to the Board of Directors of the Plaintiff Company, raised the sum of Rs. 900 million payable for acquiring 90 per cent of the shares of the Plaintiff Company by selling debentures of the plaintiff company and paid such money to the government," the Court held. Clearly the management of the Defendant Company have shrewdly using the Board of Directors of the Plaintiff Company bound the Plaintiff Company. They have not truly given to the Government Rs. 900 million they should have paid to acquire shares in the plaintiff Company and have subjected the Plaintiff Company to an unnecessary obligation. It is clear that the defendant has unjustly enriched itself causing loss and damage to the Plaintiff (Puttalam Cement). It is also clear that the Plaintiff is obliged to pay Rs. 455.2 million as interest on the said debentures," the judge said.

The exparte judgement was served on Thawakkal Ltd. but they did not object to it. Thawakkal Ltd. did not pay the decreed sum.

Accordingly the Court gave a mandate on April 19, 1999 for the sale of 32.5 million shares of Puttalam Cement held by Tawakkal Ltd. for the recovery of the decreed sum and the shares were disposed of marking another record transaction.

Immediately before the sale of shares Paul Ratnayake Associates, writing on behalf of Tawakkal requested not to proceed with the sale of the shares, but the Court Registrar had declared that the brokers could proceed with the sale of the shares.

The sale of the shares were first put at Rs. 1,350,200,000 which was the decreed amount as given in the mandate and since there were no bidders the sale was put at Rs. 478.4 million, which was the appraised value on the earnings. Eventually Hoderfin B.V., one of the Shareholders in Puttalam Cement purchased the shares for Rs. 580 million.

Accordingly the sum received was Rs 775.2 million less than the amount awarded by Court.

Swarnavahini allays fears of World Cup fans

By M.Ismeth and Sanath Weerasuriya

Swarnavahini has assured it will telecast spot-on commentaries interspersed with expert comments live from World Cup venues. Comments by local experts will be confined to luncheon breaks.

This assurance was given to The Sunday Times by a spokesman for Swarnavahini which has won the rights to telecast all 42 matches to be played in England from May 14 till June 20.

There had been considerable anxiety amongst cricket fans in Sri Lanka that advertisements in-between overs would mar the uninterrupted view of the matches as had happened in earlier telecasts of this channel.

Another worry amongst the fans was that they would be deprived of the viewing and to the listening of expert comments by those on the spot.

In the curtain raiser World Cup holder Sri Lanka will take on the host country England at Lords on Friday May 14, starting at 4.30 pm local time. The match will be telecast live without interruption until close of play at 12.15 am.

The complete Swarnavahini package includes all five Sri Lankan engagements with one hour of highlights.

The channel will also telecast all thirteen matches played by the rest of the competitors.

The diary of Sri Lankan engagements is as follows:.

May 14 vs England at Lords,
May 19 vs South Africa at Northampton,
May 22 vs Zimbabwe at Worcester,
May 26 vs India at Taunton,
May 30 vs Kenya at Southampton.

There will be live telecast of all nine matches in the Super Sixes, the two semi -finals and the final.

CMC ready to face disaster

By Kumaradasa Wagista

The recent floods in Colombo have compelled the Colombo Municipal Council (CMC) to form a disaster committee to face any contingency, Mayor Omar Kamil said.

This committee comprising heads of departments and sub units together with the entire CMC labour force will in the event of a disaster act as one unit, he said.

When the city was flooded in the recent rains, the CMC could only help the victims by supplying cooked meals and dry rations to about 30,000 affected people and helped them find temporary shelter.

"As prevention is better than cure the CMC has identified the reasons for floods in the city and action is being taken with assistance from the Land Reclamation and Development Corporation to prevent future floods, specially in low lying areas in the city," the Mayor said. Storm water drains are to be constructed from St. James Street junction to link with the Stadium Complex drains and Crows Island in Colombo North, which is the worst affected area during rains. The draining system in many low lying areas in Colombo East will also be re-laid. Contracts for garbage removal will be given to the private sector in Bambalapitiya, Kollupitiya, Wellawatte, Havelock Town, Kirullapone, Grandpass and Kochchikade areas.

Hapangama case put off for May 26

Hearings of Gampaha District UNP parliamentarian Pradeep Hapangama's shooting case was postponed to May 26 by a Colombo Magistrate when the case was resumed last Friday (7th).

Mr. Hapangama is charged with the shooting of Sisil Wickremesnighe, a PA activist on March 12 1997 around 11.30 pm in the run up to the local government polls.

The shooting took place when Mr. Hapangama was proceeding towards Colombo at Kelaniya where he was allegedly surrounded by mobs and prevented from proceeding. The MP was immediately taken into custody on suspicion of causing minor injuries to the victim and subsequently released on bail. Additional Magistrate Mrs. N.C.T.K. Sanasgala postponed the non-summary inquiry to May 26.

Honouring the achievers

List of winners and judges' citations

The Editors' Guild of Sri Lanka held its first Awards Night last Tuesday. Following are the award winners.

Journalist of the Year 1998

Iqbal Athas, Consultant Editor and Defence Correspondent of The Sunday Times for his reporting on the armed conflict which has irritated a few, provoked some to use physical violence against him and yet helped readers to understand the direction of the government's battle with Tamil rebels. Despite threats and intimidation, he has continued to expose corruption, mismanagement and mishandling in the defence establishment. The award was presented by Mervyn de Silva, Founder President of The Editors' Guild.

The Sepala Gunasena Award for Courageous Journalism in the Defence of Press Freedom

Uthayan newspaper in Jaffna for publishing under difficult conditions and yet informing readers. The award was presented by Manu Gunasena, son of late Sepala Gunasena.

The D.R. Wijewardene Award for Earning the Appreciation of His/Her Peers and the General Public

Pradeep Kumar , Aranayake correspondent of the Dinamina for exposing illegal activities within a local community and challenging corrupt law enforcement officers. The award was presented by E.E.C. Abeyasekera who was Secretary to the late D.R. Wijewardene and later a Director of Lake House.

The Upali Wijewardene Award for Human Interest Reporting

Ranee Mohamed of the Sunday Leader for thought-provoking features on health and education.

The award was presented by Lakmini R. Wijew-ardene Welgama, Chairperson of Upali Newspapers Ltd.

The other awards were:

Scoop of the Year

Sonali Samarasinghe of the Sunday Leader for revealing the disappearance of artefacts from President's House. The award was presented by M.G. Wenceslaus, Managing Director of Express Newspapers Ltd.

Scoop of the Year (Honourable Mention)

Ranjith Ananda Jay-asinghe of the Lankadeepa for reporting an Inland Revenue Department inquisition of bank accounts. The award was presented by Wenceslaus.

Cartoonist of the Year

W. Wijesoma for his succinct depiction of the police which appeared in the Divaina. The award was presented by Victor Gunawardene, Course Director, Journalism and Communications Project, Sri Lanka Foundation Institute.

Young Reporter of the Year

Shan Wijetunga of the Divaina for exceptional progress and versatility. The award was presented by Waruna Karunathilaka of the Free Media Movement.

Special Award of Excellence for Reporting

Yukthiya newspaper for innovative use of satire in reporting the successes and setbacks of the security forces in the north and the east and keeping the readers informed despite the censorship. The award was presented by Ariya Rubesinghe, Director of Government Information.

Honourable Mention under Excellence Category

Newton Seneviratne, Ananda Dharmapriya Jayasekara, Uvindu Kurukulasuriya, R.B. Dissanayake and Mohan Wijeratne of the Ravaya for the investigation of a judge in 1998, though the issue remains unresolved. Mr. Rubesinghe presented the award.

Photo-Journalist of the Year

Saranapala Pamunuwa of the Sunday Island and Buddhika Weerasinghe of Lakbima tied for this award. The awards were presented by Prof. J.B. Dissanayaka, Co-ordinator of the Journalism Unit of the University of Colombo.

Merit Award for Long Service to Journalism

M.A Wimal. The award was presented by Siri Ranasinghe, Editor of the Lankadeepa and Sunday Lankadeepa and Treasurer of The Editors' Guild.

Merit Awards for Courage in the Line of Duty

Awarded posthumously to photographer Edwin Weerasinghe, Karunaratne Saputhanthri, Joint Editor of the Silumina and Kirama Piyasoma, Deputy News Editor of the Silumina. The awards were presented to their widows by Mohan Lal Piyadasa of The Editors' Guild

Panel of Judges: Edmund Ranasinghe, Hector Abhayawardhana, S.T.Sivanayagam, G.S. Perera, Ranjith Wij-ewardene and Amal Jayasinghe.

Refugees, Army to vacate Madhu

By Shelani de Silva

Government has ordered the evacuation of some 19,000 people who have sought refuge in the Madhu area and given an assurance to the Church that the Army will be withdrawn from the sacred area.

This decision was taken last week when Minister Anuruddha Ratwatte visited the area for the first time after the government troops took over the area

Fr. A P Deva-sagayam in charge of the administration at the Madhu church told The Sunday Times that the evacuation of refugees had already begun with some 80 families being relocated in nearby Thampani.

He also said the people had little option as they were forced to leave the camp in the church premises.

The Catholic Church on several occasions had protested over the troops occupying the church premises. President Kumaratunga promised the Church that troops would be removed and civil administration restored. The Church demanded that Army personnel be unarmed within the church land.

The Madhu church is making all arrangements to celebrate the Feast on July 2. The government has allocated funds to renovate toilets and other facilities in the Madhu area for the benefit of pilgrims.

"We expect a large crowd from all parts of the country. I feel that many people from the South will come," Fr. Devasagayam said.

Mannar Bishop Rayappu Joseph told The Sunday Times that wells in the area were fast running dry because troops wasted much water when they bathe.

"We fear the breakout of major epidemics. This would not have occurred if the troops did not use the wells, and toilets. The troops take hours when they come to bathe. Of the 600 toilets only 120 are functioning," he said.

Backbenchers to defend UNP

Some 30 UNP backbenchers are to group themselves to defend the UNP leadership, party policies and decisions and counter adverse propaganda by the government and state-controlled media, a senior UNP source said.

They said these MPs had decided to launch an organized counter propaganda campaign following what they saw as twisted reports in the state media of divisions in the party.

The sources said the MPs would focus mainly on countering allegations, explaining party policy at grassroots level, putting up a party defence team on public platforms as they felt the the next 18 months were crucial for the build up of the party's image.

"The UNP has taken many positive decisions to improve the party to usher in a new political culture. But there is condemnation and destructive criticism of us and the party's policies have not yet reached the masses. We wish to mobilize the people through our group," one backbencher said.

Outstanding citizens honoured

Some of Sri Lanka's prominent citizens were yesterday conferred awards as the Most Outstanding Citizens.

The awards were made at the Sri Lanka District 306A Lions International Convention to those who had significantly contributed in spheres of life such as medicine, computer technology, social service and promotion of unity and harmony.

Among the recipients were Lalith Kotelawala, Dr. Jayalath Jayawardena, Ven. Uturawala Dhammaratana Thero, Dr. Upali Mendis, Sunil Jayalath Watawala, Nihal Kularatna, Edith Fernando and Thusitha Thanthirige.

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