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Issues

Ceylinco registers new company

Investors protesting and
(inset) Publications of Ceylinco Group

By Dilrukshi Handunnetti

Hot on the heels of the Ceylinco empire crash landing leaving thousands of duped investors high and dry, members of a Ceylinco subsidiary have floated a new company named Ceylanka Publications.

Independent Financial News & Views (Pvt) Ltd, another company founded by Lalith Kotelawala publishes three magazines namely Aratuwa, Akura and Sports Today.

There are other publications such as Kedapatha largely meant for the Sinhala reading Sri Lankan immigrants while another, Aratuwa Italia is published purely for Sri Lankans living in Italy.

The board of directors of the original company included Deshamanya Lalith Kotelawala, Dr. Sicille Kotelawala, Mervyn Jayasinghe (Deputy Chairman), Chamil Waduge (Executive Director) and seven others.

Adding a fresh spin to the tale is the newly registered company named Ceylanka Publications (Private) Limited. Jayasinghe is also the chairman of F & G Co. Ltd., the company presently under a cloud with depositors crying foul.

Interestingly, while duped investors have no option but to form themselves into protesting little associations, attend unsuccessful investor/depositor meetings or take to the streets on occasion, it appears that a new company has been carved out of the original publishing company of the Ceylinco conglomerate.

New company registered

The new company was registered as recently as March 18, 2009, but its directors defend that they have every right to form new companies under the Articles of Association (AoA), specially when the objectives of the original company were not fulfilled.

When contacted, Chamil Waduge stated that the Articles of Association (AoA) did not preclude them from forming other companies and/or transferring funds from the original company to a newly formed one — truly the case in point with regard to the Ceylinco Group of Companies.

The new company’s board of directors is Mervyn Jayasinghe (Chairman), Chamil Waduge (Managing Director) and T.K. Weerasinghe (Director Legal). The company has its registered office at 26/1, Dr. Lester James Peiris Mw, Colombo 5 which is also the address provided in the publications of the original company, Independent Financial News & Views (Pvt) Ltd.

Interestingly, Aratuwa Italia, a magazine for free distribution within the Sri Lankan community in Italy mentions its Colombo office to be the same Lester James Peiris Mawatha address. The magazine mentions 2552018 as the Aratuwa Italia contact number while Ceylanka Publications letterhead has 2552020 as the company contact phone number.

Transfer of funds

Amidst speculation that a transfer of money had taken place between the two publishing companies, inside sources claim that the former has transferred Rs. 10 million to the latter. While not willing to give details, Waduge who is also the editor in chief/ executive director of the publications does not deny that money was indeed so transferred.

Meanwhile, the management of Merchant Bank of Sri Lanka (MBSL) and Finance Guarantee Group held a media conference in connection with the restructuring plans for investors/depositors chaired by Chairman, MBSL, Janaka Ratnayake and Chairman, Finance & Guarantee Group, Mervyn Jayasinghe along with other officials at Ceylon Continental Hotel on March 17.

Investors/depositors now allege and are fearful that the new publishing company has applied for a loan from MBSL to continue its activates, a fact MBSL denies. It is a path that Ceylinco Group’s many companies seem to have taken, justifying their fears.

When contacted, Chairman, MBSL, Janaka Ratnayake denied that a company named Ceylanka Publications had applied to the bank for a loan.

“At this point, if the company requesting for a loan is connected to Ceylinco or Seylan, no one would grant them such a loan,” Ratnayake said.

Unavailable

Despite our many attempts, Chairman, F & G Co. Ltd., Mervyn Jayasinghe was unavailable for comment at the time of going to press.

The hotline to Ceylanka Publications published in its letterhead, 071 4552020 has been disconnected. However the Managing Director of Ceylanka Publications, Chamila Waduge told The Sunday Leader that the Memorandum of Association (MoA) did not bar new companies from being formed. He also said that the original company had not been liquidated and is still in operation. He however did not deny any transfer of assets when questioned, but said it would not be illegal to do so.

Meanwhile, Lalith Kotelawala, still at the Merchant’s Ward and on bail was issued a medical certificate by none other than Director, National Hospital, Dr. Hector Weerasinghe. This fact drew the attention of Deputy Solicitor General Sarath Jayamanne who said in open court on March 26 that this was the first time that he (Jayamanne) had received a medical report from the Director of the National Hospital on behalf of a patient.

He referred in court to a magazine titled Janmabhinandana published by Ceylinco Consolidated on Lalith Kotelawala’s birthday that included a message — an interview based article on Dr. Hector Weerasinghe. The counsel said that it was the same Dr. Weerasinghe, who had now forwarded the medical report on behalf of Kotelawala. In the said article, Dr. Weerasinghe has spoken in glowing terms of the philanthropist businessman.

List of Golden Key depositors from Rs.2.6 million to 3 million

MRS SALOME RADHANIKA GOMEZ 2,600,000.00

MR SRITHAR MARIMUTHU 2,600,000.00

MRS SUDHARMA IDDAWELA 2,600,000.00

MR U H KULASIRI 2,600,000.00

MR W A D WIJAYASIRI 2,600,000.00

MR W S K WIMALADHARMA 2,600,000.00

MR WIJANTHA EWART RATNAYEKE 2,600,000.00

MR H M K AMBANWELA 2,600,000.56

MR PREETHI LALANTHA JAYASINGHE 2,600,063.00

MRS CHITRA PREMASINGHE 2,600,704.38

MR A A S A GUNARATNA 2,600,894.41

MR S H LEANAGE 2,605,174.33

MR DUNSTAN KENNETH PERERA 2,605,900.00

MRS S A VINDYA SANJEEWANI GUNASEKERA 2,607,050.11

MRS K D WIJENDRA 2,610,000.00

MR KINGSLEY MUNASINGHE 2,610,000.00

MR P S L SILVA 2,610,000.00

MRS SRIMATHI JAYATILAKE 2,612,287.77

MRS J D N VASANTHINI 2,616,667.00

MRS P WIJETUNGE 2,624,738.44

MR M NIHAL DELPHYNUS PER GUNATILLAKE 2,625,550.48

MR W H C RODRIGO 2,627,984.95

MR C H M PERUMAL 2,630,000.00

MR T W DE SILVA GUNESEKERA 2,630,000.00

MRS R M S WEERASINGHE 2,633,500.00

MRS K D N FERNANDO 2,634,534.24

MRS A C BELL 2,634,689.20

MRS W S KARUNATHILAKE 2,634,908.23

MR T A D C DILAN 2,636,915.17

MRS CHIRANTHI SUJAYANIE KARIYAWASAM 2,637,000.00

MR ADRIAN E S JOSEPH 2,638,202.28

MRS SUNETHRA KULATILAKA 2,643,651.98

MR P A J PERERA 2,646,084.00

MR B N DE ZILWA 2,647,033.44

MRS CHITRA ABEYGOONEWARDENA 2,648,507.80

MRS S L R JIRASINGHE 2,649,931.50

MR GANGANATH AMADORU 2,650,000.00

MR L A L SAMARAWICKREMA 2,650,000.00

MR W H NIXON FERNANDO 2,650,000.00

MR NIMAL PERERA 2,670,000.00

MS D S TENNEKOON 2,671,831.80

MRS J AYIN CAREEM 2,675,000.00

MR W A PALITHA MAHANAMA 2,675,000.00

MR THANGIAH VIJAYANANTH 2,684,095.12

MR H N J GUNARATNE 2,686,893.85

MR A S JAYATILLEKA 2,690,000.00

MRS A D C PRIYADARSHANI 2,700,000.00

MRS A N C K WEERASINGHA 2,700,000.00

MR B B HERATH 2,700,000.00

MRS C S D PERERA 2,700,000.00

MR COLOMBAGE JOSEPH SH FERNANDO 2,700,000.00

MR D H J FERNANDO 2,700,000.00

MS D S WIJESINGHE 2,700,000.00

MRS D S H MARAPANA 2,700,000.00

MR D SAJIT JANARAJ FERNANDO 2,700,000.00

DR ERNEST ATUKORALE 2,700,000.00

MR G MUTHUSAMY 2,700,000.00

MRS G A H A J C JAYAWEERA 2,700,000.00

MR H D F L SUNIMAL 2,700,000.00

MRS H N V D ALMEIDA 2,700,000.00

MR J A WEERASINHE 2,700,000.00

MR J M L JAYASUNDARA 2,700,000.00

MR K A P S ANGULUGAHA 2,700,000.00

MR K F S PERERA 2,700,000.00

MS K M D K M PERERA 2,700,000.00

MR KAPILA GUNASEKERA 2,700,000.00

MRS KUSUMA NARANPANAWA 2,700,000.00

MR KUTUBUDDIN ESMAIL 2,700,000.00

MR/MS L N / A B GOONEWARDENA 2,700,000.00

MR M LIYANAGE 2,700,000.00

MR MAHENDRA AMARALAL KALUBOWILA 2,700,000.00

MR NIRANJAN ELLEPOLA 2,700,000.00

MR P L GUNASINGHE 2,700,000.00

MRS PRAXY SAMARATUNGE DE SARAM 2,700,000.00

MRS R K G SILVA 2,700,000.00

BRIG R M B P RANASINGHE 2,700,000.00

MR S B WEERASINGHE 2,700,000.00

MRS S C PARANAHEWAGE 2,700,000.00

MRS S G R PERERA 2,700,000.00

MR S K E MADAWALA 2,700,000.00

MR U L KARUNARATNE 2,700,000.00

MR W S B VONHAGT 2,700,000.00

MR WIMALA DASSANAYAKE 2,700,000.00

MS DAYAWATHI WARAKAWALAGE 2,700,000.08

MR M S SOOKOOR 2,702,910.19

MR L M S T FERNANDO 2,703,644.68

MR/MS ANTON K/MURIN LUMINA JACOB 2,707,500.00

MRS ANOJA JAYAWICKRAMA 2,709,097.87

MR J M CRAMER 2,710,000.00

MRS S V I RODRIGO 2,710,000.00

MR D D N KUMARA 2,712,905.92

MR GERALD NANAYAKKARA 2,713,373.30

MR THOMAS HUPPERT 2,720,393.74

MRS W A D JAYATHILAKE 2,720,734.02

MR H M S HERATH 2,723,358.44

MR A M A B ALAHAKOON 2,723,369.86

DR C FERNANDOPULLE 2,725,000.00

MR ESHANTHA GUNAWARDHANA 2,725,000.00

MS A R DE SILVA 2,726,746.22

MR MANEL DISSANAYAKE 2,728,430.84

MRS D M G F SIYABALAPITIYA 2,735,336.18

MRS ANDREA DHANAPALA 2,740,000.00

MRS N P EMBULDENIYA 2,741,500.00

MR GAYA NISSANKA PATHIKIRIKORALE 2,743,807.46

MS A H A NIROSHANI 2,750,000.00

MR C A JAYESINGHA 2,750,000.00

MRS CHANDRAWATHI HETTIARACHCHIGE 2,750,000.00

MR D A PERERA 2,750,000.00

MR H DAMMIKA PRIYACHAND PATHIRANA 2,750,000.00

MR L HEMACHANDRA 2,750,000.00

MRS M S DE SILVA 2,750,000.00

MRS MADHUKA JAYASINGHE 2,750,000.00

MS N T BATUWANTUDAWE 2,750,000.00

MR/MS NEELA / CLAIR THIMBIRIPOLA 2,750,000.00

MS S P A SAMARATUNGA 2,750,000.00

MR W M S D UDUWAWALA 2,750,000.00

MR D M N C DASWATTA 2,750,299.85

MR P A S PERERA 2,751,164.38

MRS FLEUR MACK 2,752,272.31

MS R LOGESWARY 2,753,841.01

MR H U N PERERA 2,758,358.46

MRS DEDIWALAGE JAYA CHAN RANATUNGA 2,760,000.00

MR B J PAUL 2,765,000.00

DR NEVILLE COORAY 2,776,595.37

MS FAUZUL FAAIZA ABDUL RAHIM 2,779,241.25

MS SHERABANU SETHWALA 2,786,386.21

MR MARK RVMAL FERNANDO 2,790,617.07

MR A U PALLIYAGURUGE 2,800,000.00

MR A W K J SILVA 2,800,000.00

MR B A R D PERERA 2,800,000.00

MR B R O FERNANDO 2,800,000.00

MRS C R NAVARATNE 2,800,000.00

MRS CHANDRA K AMBANWELA 2,800,000.00

MR D ABEYWARDENA 2,800,000.00

MR D P GAMAGE 2,800,000.00

MR DINESH NAGENDRA SELLAMUTTU 2,800,000.00

MR DONALD NELLIMALE KURIAN 2,800,000.00

MRS E F P MENDIS 2,800,000.00

MR H J KURIAN 2,800,000.00

MR H R G SENARATNE 2,800,000.00

MRS HEMANTHI PERERA 2,800,000.00

DR I S DASSANAYAKE 2,800,000.00

MR J WIJEGOONEWARDENE 2,800,000.00

MR K VENUBALA 2,800,000.00

MR K R WELIWITA 2,800,000.00

MRS K RUVINI THARISHA THILAKARATNA 2,800,000.00

MRS K S THABREW 2,800,000.00

MRS K T C M S D FERNANDO 2,800,000.00

MR KANKANI GAMAGE RATHNASIRI 2,800,000.00

MR L B SENADHIRA 2,800,000.00

MR L R PERERA 2,800,000.00

MR N M A C NISSANKA 2,800,000.00

MR R I FERNANDO 2,800,000.00

MR RANJITH ASOKA DE ABRE RAJAPAKSE 2,800,000.00

MRS S CROSSETTE THAMBIA 2,800,000.00

MRS S A GOONEWARDENA 2,800,000.00

MRS S D L A A WIJESIRIWARDENE 2,800,000.00

MRS SOMAWATHIE LAHANDA PURAGE 2,800,000.00

MR T I FERNANDO 2,800,000.00

MR THURAISAMY THUMAKANDAN 2,800,000.00

MR W ANTON CHRISANTHA R FERNANDO 2,800,000.00

MR A D W PATHINAYAKA 2,800,004.08

MR SUNIL JAYARATHNE 2,802,321.93

MR S M WICKRAMASINGHE 2,804,161.93

MS HEMANTHA PUSHPAMALA VITANATCHI 2,806,057.15

MR S D G PERERA 2,809,040.20

MRS W M A FERNANDO 2,810,000.00

MRS WARSHAGAMAGE KUSUM BALASURIYA 2,811,637.39

MS M L I COORAY 2,813,085.58

MR G T FAZLEABAS 2,814,068.37

MRS R S KARUNARATNE 2,816,028.65

MRS D A DE ZILWA 2,825,000.00

MR N M A DE ZILWA 2,825,000.00

MR D M SALINGA PRIMAL DISSANAYAKE 2,838,386.51

MRS LEELA JAYASINGHE 2,841,875.00

MR D M S C DISSANAYAKE 2,850,000.00

MR JOHN STANLEY SAMARATUNGA MUHA 2,850,000.00

MR L W A P WICKRAMAPALA 2,850,000.00

MR RANJAN WANIGASEKARA BALASURIYAGE 2,850,000.00

MRS S K V P RANJANI 2,850,000.00

MRS S P C F WIJEYARATNE 2,850,000.00

MRS S R H SOZA 2,850,000.00

MR W R S M R A HIGGODA 2,850,000.00

MR N P MOORJANI 2,861,000.00

MR O E PEIRIS 2,862,672.25

MR DON PRIYA SENANAYAKE MADAPATHAGE 2,864,122.70

MRS W S MADURAWELA 2,868,628.18

MR CECIL F LEARD 2,870,000.00

MR M G S M WICKRAMANAYAKE 2,872,999.57

MR K D S PATRICK 2,873,463.16

MR DERRICK TALWATTE 2,875,000.00

MR J DOLAWATTA 2,875,000.00

MR L W KRAUSE 2,876,400.00

MR DON EDWARD WELIKALA 2,879,140.00

MS PRIYANKA DONA ABEYSEKERA 2,879,852.76

MRS SHANTHINI NAVARATNAM 2,885,000.00

MRS A N JAYASINGHE 2,900,000.00

MR C S B ARAMBEPOLA 2,900,000.00

MR CHANDIKA PATHIRANAGE BRODIE 2,900,000.00

MRS CHRISTINE NAYOMI GOONETILLEKE 2,900,000.00

MR G K A H PERERA 2,900,000.00

MR H D JAYASINGHE 2,900,000.00

MR H MERVIN STANLEY PERERA 2,900,000.00

MR H S A LIYANAGE 2,900,000.00

MR J N RAYMOND 2,900,000.00

MRS K A WERAPITIYA 2,900,000.00

MR K A SHERAN FERNANDO 2,900,000.00

MR M I A SULAIMAN 2,900,000.00

MR M K DE SILVA 2,900,000.00

MR NIMAL VELE PERIGE 2,900,000.00

MR P W P KARIYAWASAM 2,900,000.00

MRS R D R MANAMPERI 2,900,000.00

MR R R RATNAYAKE 2,900,000.00

MR ROHAN FELICIAN PERERA 2,900,000.00

MR S R SIRIWARDANA 2,900,000.00

MRS A GUNERATNE 2,900,000.00

MR R G LAKSHMAN 2,900,024.00

MR M H APPLEGATE 2,901,425.60

MR P A D F DAYANANDA 2,908,160.09

MR S B N RODRIGO 2,910,000.00

MR T E JANSEN 2,917,364.92

MRS C W GOONEWARDENE 2,920,465.74

DR S H BANDUWARDENE 2,922,287.70

MR S M MUNASINGHE 2,925,000.00

MR S S RAJAKARUNA 2,925,000.00

MRS FAUZIYA MOIZ SETHWALA 2,942,667.72

MRS P R V K AMBEPITIYA 2,951,653.70

MS D R J MANUSHI SENANAY MADAPATHAGE 2,954,710.37

MR ANTHONY BERNARD PERERA 2,956,974.02

MRS H S P ABEYAWARDANA 2,962,815.58

REV K CALIXTUS FERNANDO 2,967,203.03

MR M D S EDWARD 2,973,675.67

MS THAMARA SHIRANI PATHI WEERASINGHE 2,976,915.62

MR Y R KARUNARATNE 2,979,025.29

MRS L S REBERT 2,979,134.83

MR W U HENADERAGE 2,979,484.02

MR Y A DAYARATNE 2,981,222.06

MRS S C D ALAHAKOON 2,983,000.00

MS D H MARTINSTYNE 2,993,960.00

DR A E R JAYARATNAM 2,999,581.06

Getting to the bottom of the ‘plantation problem’

D.E.W. Gunasekera and
Dr. P.B. Jayasundera

The 20 RPCs under review

Agalawatte, Agrapathna, Balangoda, Bogawanthalawa, Elpitiya, Hapugastenna, Horana, Kahawatte, Kegalle, Kelani Valley, Kotagala, Madulsima, Malwatte Valley, Maskeliya, Maturata, Namunukula, Pussellawa, Talawakele, Udapussellawa and Watawala.

By Mandana Ismail Abeywickrema

The government and the Regional Plantation Companies (RPCs) are at loggerheads, trading allegations and counter allegations on the management and default of lease payments due to the state from 20 private plantation companies.

The government has alleged that the 20 plantation companies had defaulted commercial banks to the tune of Rs.10.13 billion and Rs. 291 million to the government despite having obtained Rs. 10.059 billion as management fees during the period between 1996 – 2007, a claim the RPCs deny stating that the government had to still make payments to the companies for the lands acquired by the state after privatisation.

The report submitted by the four-member Cabinet Sub Committee headed by Constitutional Affairs Minister D.E.W. Gunasekera has said that plantation companies owed the government Rs.291 million in unpaid lease dues.

The report has further revealed that out of a total land extent of 408,487 hectares taken over by the Land Reforms Commission (LRC) under the Land Reforms Act of 1972, the 211,651 hectares handed over to 20 private plantation companies on a 99-year lease agreement remained unutilised and unproductive.

Unaccounted for

A total of 408,487 hectares of land was acquired by the LRC under the Land Reforms Act in the year 1972. Of this extent more than 50% was given over to 23 plantation companies for management.

However, out of the 23 plantation companies the Janatha Estate Development Board (JEDB) and the Sri Lanka State Plantations Corporation (SLSPC) held three while the remaining 20 companies were leased out to the private sector. Gunasekera had last week told the media that an extent of 21,006 hectares with a minimum estimated value of Rs. 710 billion vested with 23 regional plantation companies by the LRC are unaccounted for and untraceable. The plantation companies have been vested with between 5,000-20,000 hectares for management.

In its recommendations the cabinet sub-committee has proposed the appointment of a Presidential Task Force to look into the issue and streamline the process.

In a state of neglect

Gunasekera has also said, there must be a legal mechanism to collect the huge overdrafts from plantation companies and re-take valuable state lands which are in a state of neglect.

“These lands can be distributed among tea, rubber or coconut small holders who contribute immensely to the national economy, or they could be distributed among the landless,” Gunasekera has reportedly said.

Meanwhile, the President last year appointed a 10 member committee to inquire and submit yet another report on the RPCs. The committee headed by Neville Piyadigama while noting that the monies due to the government from the RPCs remains unpaid, has highlighted the decline in production and land productivity in the 20 RPCs.

According to the report, the total tea production of the 20 RPCs has declined from 132 million kgs in 1996 to 125 million kgs in 2007. The average land productivity that stood at 1324 kg/ha in 1996 has seen a decline to 1279 kg/ha in 2006.

The report has further cited inadequate replanting, inconsistent fertiliser application, high wages, lack of worker and staff training and high cost of production and low profitability among others as causes for poor productivity and low production.

The committee has also submitted 40 recommendations for the government’s consideration to address the present issues pertaining to the RPCs.

The controversy surrounding the RPCs and their future has placed the country’s plantation sector in a quandary, as it is already suffering a beating due to the global recession.

“No truth in Minister’s claims”

Chairman, Planters’ Association, Damitha Perera speaking of the controversy surrounding the RPCs denied claims made by Minister D.E.W. Gunasekera that the companies had defaulted commercial banks and not adhered to the lease agreement signed between the RPCs and the government.

Perera told The Sunday Leader that there was no truth in the statement made by the Minister that the RPCs had defaulted billions of rupees to the commercial banks. “If we are in default, then no commercial bank will be allowed to carry out business with us,” he said.

Perera noted that the committee had forgotten the reason for privatising these plantation companies. “The state could no longer carry the burden. The state was coughing out Rs. 400 million per month in 1992. The government then decided to privatise the management. After the management was privatised, from 1995 onwards stocks were sold through the stock exchange and lease agreements were signed between the government and the RPCs. The government then became the lessor and the RPCs became the lessee,” he explained.

Perera also said that the ‘mudslinging’ by the government appeared to be a pretext to acquire plantation land to be distributed. “The Minister has said that the RPC lands could be taken over and distributed among the landless.”

Speaking of the allegation of RPCs charging high management fees, Perera said the management agreement was done with the management fee agreed upon by the RPCs and the management agents. He said that 90% of the RPCs have revised the management fees and agreed with the state and brought down the earlier agreed terms sharply. So far 16 RPCs have revised the fees.

He added that several other RPCs have written to the state proposing a reduction in the managing agents fees, but have not yet had any acknowledgement from the government.

As for the Rs. 291 million in lease rentals due to the government from the RPCs, Perera said the then Treasury Secretary P.B. Jayasundera had agreed to offset any outstanding lease payments from the compensation due to the RPCs on the lands acquired by the state after privatisation.

However, at a subsequent meeting, Jayasundera had gone back on this. “The RPCs are yet to get compensation for land acquisition dues,” he said.

When asked about the replanting in the RPC owned plantation land, Perera said the necessity to replant was indigenous to each estate and that in areas with labour shortages and good yields the replanting policy was subject to changes.

Referring to the statement made by Gunasekera that the RPCs had employed about 83,000 people, Perera said he did not know how the Minister had received such erroneous information. “The RPCs have employed over 200,000 employees. If as the Minister says, the RPC lands are taken over, then what would become of this workforce?” Perera queried.

There were two committees appointed to look into the RPCs — Gunasekera’s committee and a 10-member committee headed by Neville Piyadigama including several professionals.

“The 10 member committee spoke to us and accepted our representations and provided us with a copy of its report. Gunasekera’s committee did not speak to us and we have not been given a copy of the report,” Perera said.

‘RPCs owe millions to the government’ - Minister

Head of the Cabinet Sub Committee appointed to look into the RPCs, Minister D.E.W. Gunasekera says that the mechanism put in place to monitor and collect the necessary dues has not functioned properly.

Gunasekera told The Sunday Leader that some of the RPCs owed Rs. 291 million to the government.

He added that the RPCs had gained profits and had even obtained bank loans, which they had also defaulted.

According to Gunasekera, the RPCs have violated one of the main clauses in the lease agreement between the LRC and plantation companies. The clause being on the necessity to re-plant.

“The plantation companies have only replanted 5,000 odd hectares of tea, rubber and coconut in 10 years, which is 0.3% of the total land extent when they should have had a replanting rate of 3%,” he said.

Speaking of the management fees drawn by some of the RPCs, Gunasekera said,the companies have drawn between 10-20% as management fees. He said that one RPC had drawn Rs. 700 million as management fees while not making any payments to the government for 10 years.

However, he said that once the sub committee commenced inquiries into the financial irregularities in the RPCs, the said company had reduced its management fees from 50% to 25%.

Gunasekera also said the Chief Government Valuer has estimated the value of an acre of land given to the RPCs at Rs. 1.5 million each. However, the estimate of the plantation companies is far less for an acre, he said.

According to Gunasekera, the plantation companies had not done the intended improvement of the plantations and re-planting. He added that some of the lands belonging to the RPCs have been used for gemming and cutting down trees.

He said that the sub committee has proposed the setting up of a presidential task force with competent people to look into the RPCs in the interest of the national economy.

Gunasekera further noted that with regard to tea production, small holders produced 76% and it would be better for the state to consider distributing land among them.

“If the RPCs have been productive and have made the necessary payments, there is no problem, but some companies have not,” Gunasekera said.

Brief history of the regional plantation companies

Following is the history behind the formation of RPCs as appearing in the report presented by the presidential committee headed by Neville Piyadigama:

During the early 1970s, large extents of plantation lands were acquired by the government and vested under the Janatha Estates Development Board (JEDB) and the Sri Lanka State Plantations Corporation (SLSPC) under the Land Reform Act No. 1 of 1972 and, the State Agricultural Corporations Act No. 11 of 1975. As a result these two agricultural corporations controlled approximately 51% of tea, 35% of rubber and 2% of the nation’s coconut lands.

Prior to 1992, the JEDB and SLSPC consisted of 509 estates covering 272,902 Ha. and employed 389,549 workers. The two corporations performed poorly throughout most of their existence and relied heavily on government assistance to offset the mounting operational losses which had increased to about Rs. 1.5 billion per annum by 1992.

In the face of the mounting financial losses suffered by the JEDB and SLSPC, the government appointed a task force to recommend measures to resolve the problems relating to these two corporations. The task force recommended the handing over of management of the plantations to the private sector.

During 1992/1993, 461 estates managed by JEDB and SLSPC were converted into 23 RPCs under the Companies Act No. 17 of 1982, in terms of the provisions of the Conversion of Corporations and Government Owned Business Undertakings into Public Companies Act No. 23 of 1987. However, the Government retained 100% ownership in these companies.

Each RPC was initially assigned the leasehold rights of between 12-29 estates for a period of 99 years for a nominal lease rental. These leasehold rights formed the primary assets of the RPCs.

The management of the RPCs was handed over to private managing agents who were selected through a competitive process. As per the terms of the management contracts, the managing agents were appointed for a 5 1/2 year term, which was renewable upon the fulfillment of certain performance criteria. In exchange for their services, the managing agents were entitled to receive a proportion of the respective company’s profits.

Mines that show no mercy

Putting his life on the line
— a UN demining worker
and (inset) A pressure mine

By Arthur Wamanan

Sri Lanka has been extensively contaminated by mines due to the ethnic conflict. The United Nations Development Programme (UNDP) says the mines pose not only a serious threat to people but to the development of the country as well.

Intensifying military operations in the north has also increased the areas that are likely to be infested with land mines.

Releasing some data following yesterday’s International Mine Action Day, UNICEF said the most vulnerable to mine attacks are children. Nearly one third of land mine victims are children, says UNICEF.

Statistics gathered by UNICEF show that an estimated 5,500 people were killed or maimed by land mines in 2007, the lowest number of recorded incidents since the Mine Ban Treaty came into being in 1997.

Mine Ban Treaty

Sri Lanka supported the UN General Assembly Resolution, calling for the universalisation of the Mine Ban Treaty.

The organisation said that children were far more likely to get killed due to land mines because of their smaller size and that an estimated 85 percent of child victims of land mines die before reaching a hospital.

Children are particularly prone to injury from land mines including cluster munitions, because these weapons are often colourful and shiny, and are very attractive to young eyes that see them as potential toys.

UNICEF added that children, particularly refugees and displaced children, are particularly in danger of land mines, as it is most likely that they may not be aware of the dangers of playing in or traversing hazardous areas.

Children’s land mine injuries include loss of limbs, sight or hearing resulting in lifelong disability. Without adequate medical treatment, children injured by land mines/Explosive Remnants of War (ERW) are often pulled out of school. They face limited future prospects for education and employment, and are often perceived as a burden to their families.

Uncleared land mines

In addition, the cost of providing long-term care for child land mine victims can be prohibitive. Uncleared land mines/ERW prevent access to reconstruction of homes, roads, schools, health facilities and other essential services. They deny access to farmland and irrigation.

Sri Lanka, which provided a voluntary Article 7 report in 2005 had indicated that it would provide an update, but has failed to do so.

Sri Lanka also failed to attend the eighth meeting of the State Parties to the Mine Ban Treaty in November 2007 or the inter sessional Standing Committee meetings in June 2008 even as an observer.

The Land Mine Monitor report said that as of 2006, there were 730 villages that were contaminated with mines out of which 173 had been cleared. Clearing processes were underway in 250 villages.

Escalation of hostilities

However, the recent escalation of hostilities has made it more difficult following allegations by the government that the Tigers had emplaced new land mines.

“The 2002 Ceasefire Agreement began to collapse in mid 2006 and the conflict intensified resulting in additional (and unsurveyed) mine/ERW contamination. Furthermore, the government allegation that the LTTE emplaced new mines, although not confirmed independently, suggests the problem may have worsened,” it said.

The Land Mine Monitor report also said that the mines and unexploded ordnance (UXO) pose a great threat to internally displaced persons (IDPs) as well.

“Mines and UXO pose an immediate threat to internally displaced persons as well as an obstacle to their resettlement and a serious long term challenge to economic reconstruction,” the report added.

The UNDP further states that there is no evidence that the Sri Lankan government has produced or exported antipersonnel mines. “It appears that it imported antipersonnel mines from countries like China, Italy, Pakistan and Portugal.”

Anti-personnel mines

However, in the case of the LTTE, the army had on many occasions accused the Tigers of planting antipersonnel mines. The army had encountered mines containing a high explosive charge and a battery mechanism. A modified version of a ‘Johnny 99,’ was produced by the LTTE earlier.

Though there has been a drastic increase in hostilities in the north due to the prevailing war, the east too at one time was faced with the issue of antipersonnel mines.

Demining activities increased in areas like Batticaloa and Ampara after the government regained total control of the region.

Deminers are not allowed into areas demarcated as High Security Zones (HSZ). According to the UNDP, around 62 square kilometres have been demarcated as high security zones by the military. “Sri Lanka has some 62 km2 of HSZ-areas near military emplacements, camps, barracks and checkpoints, often protected by an offensive perimeter of mines.

These mines are not accessible to demining agencies. Since the flare up in fighting between LTTE and government forces in August 2006, the SLA also put other clearance tasks off limits to operators because of their proximity to SLA positions,” the Land Mine Monitor report further said.

Mine action programme in Sri Lanka is conducted under the leadership of the National Steering Committee or Mine Action (NSCMA) chaired by the Nation Building and Estate Infrastructure Development Ministry.

More Issues..

Getting to the bottom of the
‘plantation problem’

Mines that show no mercy

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