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News

July 29, 2007  Volume 14, Issue 6


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Lid blown on ghost compnay that did the MiG deal


Crusader House - the building that houses Westbury at 145-157 St. John's Street

MiG deal not a registered public contract

Bellimissa non-existent in the UK

Bellimissa office given in contract is a 
mail and call forwarding address

Off shore co. set up by "Companies 
Made Simple Limited"

By Gamini Parakrama

The word MiG must by now surely taste sour in the mouths of most Sri Lankans. That our air force has acquired some of the same MiG-27 aircraft in late 2006 that it rejected for purchase in 2000, and paid much more for them is a given fact.

The Sunday Leader reported on July 15 that the UK company which was paid nearly US$ 15 million by the Sri Lankan government in 2006 for four MiG-27 aircraft was "not registered with the British Ministry of Defence."

In the latest twist of events it turns out that this statement was an understatement of the shocking reality. It was based on our assumption that such a company, Bellimissa Holdings Limited, actually existed in any legal form within the United Kingdom. This apparently is not the case.

No legal registration

In fact The Sunday Leader learns that the contract for the procurement of these aircraft was not registered with the Registrar of Public Contracts, as is required by law. According to the Public Contracts Act of 1987 any party contracting for the supply of equipment of services to the Government of Sri Lanka must register with the Registrar of Public Contracts.

At the time of registration such suppliers are required by law to declare their legal name and address, nationality, whether they are a public or private company, registration number, and most importantly, the full name, address, nationality, any previous nationality and percentage of shares held in respect of every single director and shareholder of the company, as required in Forms PC-1 and PC-A10 of the Registry where the value of the contract exceeds Rs. 5 million.

Bellimissa Holdings Limited is defined as a "Designated Party" in the air force procurement contract. The company name makes it clear that Bellimissa is purportedly a 'limited liability company' or LLC, and any such company incorporated in the UK has to be registered by law with Companies House, a British government body.

Non-existent in the UK

Evidence presented on this page makes it perfectly clear that there is not, and there has never been, any company by the name of Bellimissa incorporated in the UK, ever. In fact such is the subterfuge that nowhere is it explicitly stated that Bellimissa is a UK company, but it is implied by the provision of a London address for the company.

The air force contract (SLAF/2006/7/AIR) for the MiG-27 aircraft (Order No. J45001) identifies and details three parties bound by it. One is the Commander of the Sri Lanka Air Force (the buyer), whose address is given as P.O. Box 594, Colombo, Sri Lanka. The seller, the Ukranian company UKRINMASH is identified by an address ending with "Kiev, 04119 Ukraine." Enter Bellimissa, the "Designated Party," whose address is given as one in London, with no specific mention of the United Kingdom.

Given that there is no such company in the UK, The Sunday Leader ventured to discover who was paid 15 million dollars of Sri Lanka's toiling taxpayers' money for these ancient aircraft. As it turns out, the address given in the air force contract - 2nd Floor, 145-157 St. John's Street, London EC1V 4PY (pictured) is home to an inter-related group of five companies, all part of a 'group' in the name and style of Westbury Group.

'Grand' bank balance

As these are all limited liability companies, the amount of money they have in their bank accounts is in the public domain. One of these companies is exempt from filing accounts. Three of them together hold in their respective bank accounts a 'grand' total of under Rs. 2,000. (Be assured there are no missing zeroes.)

The total 'cash in bank' as at December 2006 for Westco Nominees Limited, Westco Directors Limited and Companiesmadesimple Limited was eight (8) sterling pounds. The last company on the 2nd Floor, Westbury Business Services Limited had 21,362 pounds in its account at the end of the 2006 financial year.

Clearly from these figures, these companies are not involved in large scale defence procurements. But they are the only companies registered at the address to which the Government of Sri Lanka claims to have paid almost Rs. 1.5 billion; therefore the nature of their business is of public interest.

Pretensions

The Westbury Group consists primarily of "chartered accountants and business advisors," and they "specialise" in "company formation" according to their promotional material. The company offers a mail forwarding service which they describe as follows: "We have a choice of two prestigious UK mail forwarding addresses including London W1 and London EC1; the EC1 address is in the heart of the capital's financial district."

Company formation and mail forwarding are provided by the Westbury subsidiary, Companies Made Simple, under UK company number 015104525. On their website (www.companiesmadesimple.com) they claim to provide quick, simple and affordable company formation services, including the formation of offshore companies.

The Sunday Leader made a telephone call to their call centre through which we verified not only that a company named Bellimissa Holdings is a customer of Westbury, but also that the company representative from the contract, one M. I. Kuldyrkaev is known by name to the call centre and that they are able to accept messages on his behalf (see box for details).

Westbury's Companies Made Simple branch has therefore incorporated Bellimissa Holdings Limited in an offshore jurisdiction other than the United Kingdom, beyond the reach of both Sri Lanka's and Britain's Inland Revenue authorities and Bribery Commissions, and acts as the front address and call centre for the offshore company.

Why bogus address?

Whatever arrangement Bellimissa may have with companies at this London address, the fact remains that the company is not an entity in England, and it does not have either an office or a single paid employee at the address provided in the air force contract. This means that under UK law, Bellimissa Holdings cannot possibly bank inside the United Kingdom. Thus the registered address for Bellimissa on the Letter of Credit issued by the People's Bank in its favour could not have been addressed to a British bank, or to a company address anywhere in England.

What then, is the purpose of providing a bogus England address for Bellimissa? Why not use its real incorporated address in the country in which it is registered?

It is impossible to call this purchase a 'government-to-government' transaction. Such a transaction by definition cannot include a third party in any financial capacity. Should the government require financing for a government-to-government contract it is not difficult for it to seek either a loan or credit facility from a bank or the respective government without involving additional parties based in tax havens who pretend to be located in the United Kingdom.

The story

What has happened is that for all practical purposes Bellimissa has purchased MiG-27 aircraft from UKRINMASH for a price hitherto and yet unknown to the public. All we know is that in 2000, these very same aircraft were worth less than 1.8 million US dollars. These same aircraft were bought from Bellimissa by the air force in 2006 for 2.4 million US dollars, each along with a 'finance package.'

In exchange for this finance package, the Defence Ministry agreed to even waive the performance bond requirement, which means in plainspeak "it doesn't matter if your planes don't work, we'll pay you, regardless." This was highlighted by The Sunday Leader in our previous coverage of this saga.

Envoy's concerns

This newspaper also highlighted the issue of the 'End User Certificate' pointed out in a request from Sri Lanka's Ambassador to Russia, Udayanga Weeratunga. The End User Certificate serves the purpose of ensuring that dangerous weapons reach safe hands. In this particular case the certificate would ideally read something akin to: "The Government of Ukraine hereby supplies the Government of Sri Lanka with 04 MiG-27 bombers," and not what actually happened - "The government of Ukraine hereby provides Bellimissa Holdings Limited with 04 MiG-27 bombers for them to sell to the Government of Sri Lanka!"

Bellimissa 'grounds' SLAF

Honestly, who, and where on earth is Bellimissa Holdings and what entitles them to buy MiG-27 bombers from a foreign government on behalf of the Sri Lanka Air Force? They need not have sold the jets to the Sri Lanka Air Force, but could have just as easily sold them to the LTTE, which could have afforded to buy a couple of these bombers with the seven million US dollars donated to it by the Rajapakse Cabinet through the family of Tiger intelligence operative Emil Kanthan.

What assurance does the Sri Lankan government have that UKRINMASH did not sell more than four MiGs to Bellimissa under the guise of acquiring them for Sri Lanka?

The public must also question as to who has the authority to prevent a contract from being so registered with the Registrar of Public Contracts? Clause 9 of the Public Contracts Act makes it clear that, to not register any contract whatsoever in this manner is an offence which carries a term of imprisonment.

 It is patently clear therefore that US$ 15 million was paid by the Government of Sri Lanka to a private company incorporated in a tax haven for the purchase of four ancient MiG-27 bombers for the air force, and that it was thus not a government-to-government transaction.

More importantly, it is now established that the Rajapakse regime had agreed to pay an entity incorporated in an off shore tax haven, millions of dollars under a purported government to government contract. And the million dollar question or should we say the 10% question is: Who are the real beneficiaries?

Earth calling Bellimissa

Operator: "Good afternoon. How can I help you?"

SL :  "Hello, could you please connect me to Bellimissa Hold ings?"

Operator: "Could you just spell that out for me please so I can see if we have them here?"

SL: "Certainly. It's B-E-L-L-I-M-I-S-S-A space, H-O-L..."

Operator: "That's fine I found it. Bellimissa Holdings. And who is it you would like to speak to?"

SL: "Mr. M. I. Kuldyrkaev please."

Operator: "Sorry, would you mind spelling that out for me as well please?"

SL: "K-U-L-D..."

Operator: "That's all I need sir, I found him, Mr. Kuldyrkaev. Let me get him on line for you, just a moment please."

            [3 minutes wait]

Operator: "I'm sorry, he's not picking up. Would you mind calling a little later or would you like to leave a message?"

SL: "I just need to confirm that I've got the correct number as I've been trying to locate Mr. Kuldyrkaev for a while."

Operator: "We have him on our system, Sir. Your message will cer tainly reach him." 


When Percy and Prabha took centre stage


The marchers demanded answers for many a question 

By Mandana Ismail Abeywickrema

It was certainly a show of strength when the main opposition UNP and the newly formed SLFP (M) Group held their first joint protest rally in Colombo last Thursday (26).

While crowds thronged in their thousands to the starting point of the procession - Campbell Park in Borella, the surrounding areas were converted into a sea of people dressed in green and blue.

Amidst tight security in the city following a 'bomb threat' made public earlier in the week, people from all parts of the island including those from the newly liberated east came for the march.

The protest march and rally calling for democracy and the establishment of the rights of the people by bringing to an end the present administration, commenced at 2 p.m. from Campbell Park and proceeded to Hyde Park - the venue of the "People's Power" meeting.

Apart from the thousands who attended the march, thousands also stood on the sidewalks to watch the joint rally as it made its way through the streets of Borella and Maradana towards Hyde Park.

A striking feature that was noticed by many was the camaraderie of the supporters of the two parties - the UNP and the SLFP-M Group. Casting aside their political differences, the protesters were seen marching side-by-side shouting slogans together that called for a better tomorrow.

As the sea of people slowly inched towards the venue of the meeting, colourful floats highlighting the issues faced by the country also drove along with the procession.

Downpour no dampner

The determined marchers could not be deterred by any bomb threats or even when the heavans suddenly opened up for a short burst. They marched, drenched in the rain, wet clothes and all, till they reached the venue.

The beginning of the procession reached Hyde Park around 4 p.m. However, hours later, mid way into the meeting, the procession was still in progress and the participants were marching to the venue cheered by the on-lookers on the road. Hyde Park could in no way accommodate the large number of people that kept pouring in and thousands had to stand on the adjoining roads to listen to the speeches made by the party leaders.

SLFP-M and UNP supporters stood together looking at their leaders representing different hues, sitting side-by-side, fighting for one cause. As highlighted by most speakers, the political leaders who were now working together, had at an earlier stage worked to bring down the other.

S.B. Dissanayake and Ranil Wickremesinghe in their speeches said that it was Mangala Samaraweera and Sripathi Sooriyaarachchi who were instrumental in bringing the present administration into power. Samaraweera and Sooriyaarachchi also admitted to being the ones who brought in the present "destructive" government into power.

However, everyone spoke in one voice when they identified the misdeeds of the government and stated that it was time to bring it down.

As the speeches of the leaders of the rally were aired through the loudspeakers, the crowds cheered and hailed the comments every few minutes.

After walking several kilometers they seemed determined as ever to stand till the end of the rally.

Time for a new government

UNP National Organiser, S.B. Dissanayake addressing the gathering amidst loud cheers said it was time to build a new government under Party Leader Ranil Wickremesinghe.

Dissanayake also said that although Wickremesinghe was now in the opposition largely due to SLFP (M) Group Convener, Mangala Samaraweera's doing, the time was opportune to work to defeat the evils of the country.

"Mangala by signing an agreement with us, has given us the strength. Now let's strengthen Mangala and carry this fight forward. Mangala has now stripped Mahinda of all his clothes and jewellery and left him only in his loin cloth, but Sripathi has now even stripped him of that leaving him nude," he thundered.

Dissanayake continuing with his address said, "Now it is the Medamulane Chinthana that is in place, which is without a beginning, a middle or an end (mulak, medak, agak nethi Chinthanaya)."

He also told the gathering that war was not the solution to the problem. "A solution to the problem could only be found through the devolution of power," he said.

"It was the market economy, the legacy of the UNP, that has helped the country. It was the UNP that managed to salvage the economy in 2002 when the country for the first time recorded a negative growth rate. Today once again the economy is in the doldrums and the cost of living is unbearable," he added.

Dissanayake ended his speech by calling on the people to fight for the cause to build a new government.

Suffering from hunger

Samaraweera then took the stage to loud applause and highlighted the sad plight of the country, which was expected to be the 'Switzerland in Asia' soon after the country gained independence.

"The media has published reports that Sri Lanka has been identified as a country suffering from hunger. In another seven months we will be celebrating 60 years of independence and we were never known as a country suffering from hunger. But now under Mahinda Rajapakse we have become a country similar to Somalia. We are soon becoming a failed state and are being isolated in the world as well," he said.

Samaraweera said that the President by throwing tamashas to celebrate military victories was in fact implying that the military has not made any gains in the past.

Rs. 600 million tamasha

"The President spent over Rs. 600 million to celebrate the liberation of the east and spent a large sum of money on fuel for the air display. All this money could have been used to give a bonus to all the forces personnel. They would have received some money," he said.

Samaraweera charged that the government had no intention of ending the war and said Mahinda Rajapakse had made extremism a national policy.

Oxygen for Mahinda

He then called on the JVP to join the National Congress to fight for the rights of the people instead of giving oxygen to Mahinda Rajapakse.

"The JVP says they are unwilling to join forces with the UNP. Before us, it was they who worked with the UNP to bring in the 17th Amendment to the Constitution that was drafted by UNP MP K. N. Choksy. I call on them to join us without giving oxygen to Mahinda Rajapakse," Samaraweera said.

"King Don Percy the first cannot sleep at night as he now sees a letter 'M' when he closes his eyes and Chandrika Kumaratunga when he opens them. It has got worse since the 19th when we entered into an MoU. Instead of governing the country, he is now telephoning UNP MPs, and goes around using air force helicopters to perform poojas," he added.

Admitting his role in dissolving the UNF government in 2004, Samaraweera said that the present destruction was happening under his government, which he played a key role in bringing to power.

Ministers unhappy

"There are lots of SLFP ministers and members who are unhappy with the present administration. They have been prevented from coming out now, but we promise to create an environment where they too could come out soon to join the battle," Samaraweera added.

Addressing the rally UNP Leader Ranil Wickremesinghe vowed to topple the government and form a government with a true 'people's mandate.'

"We are here to cast aside the dooshanaya, bheeshanaya and the Rajapakse poshanaya. We are here to protect the rights of the people and safeguard democracy. We are gathered as the National Congress to protect and rebuild the country," he said.

Wickremesinghe said that since 2005, the country is being ruled by a leader without a proper people's mandate.

Percy-Prabha pact

"He (Rajapakse) came to an agreement with the LTTE - the Percy-Prabha agreement, and for the first time since independence we now have a government without a mandate," he said.

Wickremesinghe said that "Percy Rajapakse has tried everything - from destroying the SLFP to silencing the media."

Wickremesinghe also charged that while 75% of the national budget was controlled by the Rajapakse brothers, parliament, the sole authority over public finances was left with only 25% to deal with. "Every tax payer is responsible for public finances and since parliament has control of only 25% of the national budget the people have a say only over that 25%," he added.

"The cost of living keeps increasing and all the countries are now angry with us. Who are the friends we now have? No investors want to come to the country and Sri Lanka is on the path to becoming a failed state," he said, calling on all forces to join hands to create a better future for the country.

Wickremesinghe also said that the rally was just the beginning of a series of rallies and protests that would be organised islandwide to agitate against the present government and would not end till the government was toppled and the rights of the people and democracy were restored.

Chief Coordinator, SLFP (M) Group, Sripathi Sooriyaarachchi making the final speech at the meeting vowed to form a new government under the leadership of Ranil Wickremesinghe.

The deal detailed

The crowd, waiting impatiently to hear the details of the alleged deal between the Rajapakses and the LTTE cheered as he got on stage.

Sooriyaarachchi said that during the presidential election campaign, Basil Rajapakse, who was the CEO of the campaign and he, met the LTTE. "During the discussion, they tried to justify the killing of Lakshman Kadirgamar and I was compelled to speak against it. Then they spoke of handing over the east and Karuna and there again I spoke against it. Basil kept silent and approved the LTTE's statements. I argued and walked out," he said.

Sooriyaarachchi explained that Basil continued the discussion with the LTTE and fixed a date to have another discussion. "About five or six days later, I asked Basil about the talks with the LTTE and Basil had said that the LTTE did not like my presence as I was against them. I asked him to act with caution. On the day of the election, there was a boycott and that was when we knew.

"My suspicions were confirmed when we went to Geneva for the peace talks in February 2006. Basil was also there and was secretively advising our negotiators to pay heed to the LTTE's requests. I was then compelled to go to a toilet to call Wimal Weerawansa and inform him and Champika Ranawaka on Basil's moves. It was then that I realised that the President and his brothers were trying to work according to the agreement with the LTTE," he said.

Sooriyaarachchi then called on the government to permit the formation of the Parliamentary Select Committee to probe the alleged deal with the LTTE.

"This is the fourth time I have handed over a motion to the Speaker calling for the appointment of a Parliamentary Select Committee after making the requested amendments. Everything is in order now," he said.

Sooriyaarachchi ended his speech by saying it was time to form a new government under the leadership of Ranil Wickremesinghe.

Entertainment

Adding colour to the event were 'muppets' depicting the four Rajapakse brothers.

The four persons dressed as the Rajapakse brothers came dancing onto the stage and acted out a scene depicting the alleged deal between the Rajapakses and the LTTE where millions of rupees have allegedly changed hands.

It focused on the time before the presidential election when the Rajapakse brothers speak to a person clad as a Tiger cadre and have given him a large bag with Rs.150 million marked on the outside. Soon after the payment is made an 'LTTE air raid' takes place.

After the scene of the air raid, the Chamal Rajapakse look-alike  tells his younger siblings that they were attacked by the LTTE using the money they had given. The younger siblings respond by saying that there was no problem as that too was for the advantage of the four Rajapakses.

The quartet then danced to a song titled Api Venuven Api before leaving the stage.

Among the other speakers at the meeting were UNP Colombo District Leader Ravi Karunanayake, Western People's Front Leader, Mano Ganesan and popular actor Ranjan Ramanayake.


The extravagance of Mahinda

By Dilrukshi Handunnetti 

President Mahinda Rajapakse together with his delegations have spent a colossal US $ 4,030,800 on 12 official tours since assuming office in November 2005 according to conservative estimates.

According to a basic cost analysis by some Janatha Vimukthi Peramuna (JVP) parliamentarians on the basic travel cost of the President and his delegations, the state has spent over US $ 4 million on the President and his combined delegations. The calculations exclude both airfare and charter costs.

While there is no dispute that a head of state is justified in undertaking overseas travel, what has inspired the JVP's information gathering with a view to raising the matter in parliament is the strength of his delegations.

Spiraling CoL

The analysis also follows the JVP's call to curb government expenditure at a time when the cost of living is spiraling coupled with increasing defence expenditure.

According to the information gathered, the Indian tour in December 2005, the very first undertaken by the President following his election, cost the country some US $ 288,000. This Presidential first tour that lasted five days overseas also came with a 48-member delegation.

President Mahinda Rajapakse next undertook a three-day tour of Pakistan in April 2006. The cost however was equal to the expenditure incurred during the Indian tour - US $ 288,000. The delegation comprised 80 members.

Gala time at state cost

For a two-day tour of the United Kingdom undertaken in April 2006, the fully loaded cost was US $ 12,000 for a five-member delegation.

Next came the two-day Cuban tour in September 2006. This tour cost the state US $ 48,000. The delegation strength was 20, according to the records.

According to the basic cost analysis, an eight-member delegation accompanying President Rajapakse undertook a five-day tour of the US next. The entire tour cost for the nine delegates including the head of state amounted to US $ 40,000.

The President undertook his second visit to the United Kingdom during the same year. The three-day tour of the UK undertaken in September 2006 cost the state coffers a handsome US $ 79,000, according to estimates. The President was accompanied by a 22-member delegation on this occasion.

Cost of seven tours

The calculations next covered the fully loaded cost of seven tours undertaken up to June 2007 as well.

A three-day tour of the Maldives was undertaken by President Rajapakse in February complete with a 12- member delegation. The cost of the tour amounted to US $ 43,200.

Next tour, dubbed one of the most expensive tours undertaken by a head of state with a mammoth delegation to match was made to China.

The JVP records that the biggest ever presidential delegation went to China in February this year and the delegation strength was a massive 275. The corresponding cost was equally mammoth, a thumping US $ 2,310,000 according to estimates.

This particular tour came in for heavy criticism by many, given the massive delegation the President took along with him.

SARRC summit

Then came the regional meet, the SAARC Summit in New Delhi this April.

The President visited the Indian capital, and while his own tour segment was curtailed to two days due to security reasons, the entire tour duration was five days. The strength of his delegation was 36. The SAARC visit, according to estimates cost the state US $ 216,000.

President Rajapakse also toured Italy in April with an 18-member delegation during which he also had an audience with His Holiness, the Pope. The four-day tour cost US $ 86,400.

The President then flew to Barbados during the Cricket World Cup finals. For this four-day tour of pleasure and leisure, a delegation joined him bringing the cost to a staggering US $ 72,000.

Last presidential visit

The last documented presidential visit is of a tour of Jordan in May. Some 30 others accompanied the President on his three-day tour. The documented cost of this tour is a staggering US $ 108,000.

The total cost of the 12 official visits is over US $ 4 million, and the pertinent issue here is not that the President is undertaking official visits, but that his combined delegations so far have exceeded 640.

Meanwhile, the JVP is currently raising a series of questions with regard to the excessive use of vehicles by cabinet ministers, non cabinet rankers and deputies aimed at a final cost analysis of the running cost of each ministry, particularly those set up since February 2007 when the world's largest cabinet was sworn in.

"President has curtailed his overseas travel"

An official from the President's Office speaking to The Sunday Leader on the basis of anonymity said that he was not expected to disclose the exact travel details, but defended the expenditure incurred stating that the head of state will naturally be accompanied by officials, resulting in the incurring of extra expenditure.

"Delegation strength differs from tour to tour. The Chinese delegation had to be big, because the President undertook that for investment promotion purposes. A lot of entrepreneurs were included in that delegation and much benefit was derived from the single visit," the official added.

He added that political parties and civic groups may be adding up sums to portray the President as an extravagant executive when in fact, he has taken measures to curtail his overseas travel to a minimum with strict instructions being issued to his government to also reduce foreign travel.


.....More Spotlight


When Percy and Prabha took centre stage


The extravagance
of Mahinda


 


 


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