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Today is Mother’s Day: There are only two lasting bequests we
can give our children; one of these is roots, the other, wings.

Central Bank report into Golden Key was squashed
by none other than Nivard Cabraal

By Frederica Jansz

Central Bank Governor Nivard Cabraal was responsible for preventing ˜action being taken on the findings of a 2006 Central Bank report that found Golden Key to be˜in violation of the Finance Companies Act No. 78 of 1988.

While it was mistakenly reported last week that the investigation into Golden Key was effectively squashed by the previous governor of the Central Bank Sunil Mendis, in fact it was after Cabraal was appointed Central Bank Governor that the termination of the investigation into Golden Key was ordered.

The facts regarding the report were entirely accurate. ÿThe findings of a Central Bank investigation into Golden Key were dismissed by the Governor of the Central Bank in November 2006. However the governor responsible was not, as reported, ÿSunil Mendis, but Nivard Cabraal.

Sunil Mendis retired on June 30, 2006 when this report was still being compiled.  The report was squashed later that year following a meeting Nivard Cabraal  held together with Lalith Kotelawala on November 11, 2006.

The report into Golden Key compiled by the Central Bank Investigations Department Head N. K. Gunatilake, details in several files the legal violations committed by Golden Key and calls for the Monetary Board to take action against the company. The report clearly states that Golden Key was in clear violation of the monetary laws of this country by collecting deposits without a licence to do so from the Central Bank.

However before relevant action could be taken the investigation was effectively shelved  by the senior administration of the Central Bank on the instructions of Nivard Cabraal. 

On November 11, 2006, Cabraal together with his directors including his Assistant Governor Dr.  Ranee Jayamaha met  Lalith Kotelawala and Wijedasa Rajapakshe.  Following this meeting the decision was made to brush the 2006 report under the carpet.

This gave Golden Key another two years to operate and collect deposits before its collapse in late 2008, and cost depositors and the economy billons of rupees.ÿ Had the Central Bankÿacted on the report, and sent it to the Monetary Board, action against Golden Key could have been taken in a more systematic and orderly manner and the fallout to depositors and the broader economy from its collapse could have been mitigated. ÿ

The report makes clear that sufficient evidence to shut down Golden Key had been collected by the Central Bank in 2006, and only the deliberate intervention of senior officials at the Central Bankÿ prevented the ÿreport from being acted on.

Given that a clear opportunity existed for the Central Bank to take action against ÿGolden Key in 2006 Nivard ÿCabraal must take responsibility for allowing the Golden Key scandal to assume the proportions it ultimately did. ÿÿÿ

Prominent Parliamentarian Wijedasa Rajapakshe's name also features in the report and it is alleged that he represented Lalith ÿKotelawala in meetings with senior Central Bank officials and was instrumental in persuading the Central Bank Governor to suspend the investigation into Golden Key. ÿÿThere is documentary evidence proving that the Parliamentarian ÿmet the Governor of Central Bank on behalf of Lalith Kotelawala.

However  Rajapakshe denied that these meeting were on behalf of Golden Key. "I only spoke to the Central Bank on behalf of Seylan Bank and The Finance. I was not involved with ÿGolden Key," he said.

 Rajapakse, who is both an MPÿand a prominent lawyer, is howeverÿcurrently appearing on behalf of Kotelawala at the Supreme Court hearings regarding Golden Key.

The involvement of Rajapakshe, who has also held the post of chairman, COPE (an investigating body into malpractices and corruption) adds another dimension to the scandal over the report.ÿ

It is also alleged that the Central Bank employee responsible for delivering copies of the report to Justice Shiranee Tilakawardena has been removed from his position - again indicating that officials are unhappy that the file was leaked out of the Central Bank.

All this points to the involvement of senior officials within the Central Bank and beyond - and both Nivard Cabraal and Wijedasa Rajapakshe have a lot to answer for.

Last week when this paper wrongly accused Sunil Mendis of dismissing this crucial report - his reputation spoke for him.ÿ Well-wishers rushed to his defence and left The Sunday Leader's phones ÿringing off the hook - an extraordinary demonstration of the value of a honest and decent career even in ÿtoday's Sri Lanka.

ÿThis week The Sunday Leader accuses Nivard Cabraal and  Wijedasa Rajapaksheÿ of being responsible for the termination of the crucial 2006 investigation into Golden Key and whether their reputations will answer as forcefully on their behalf remains to be seen.

Sunil Mendis clarifies...

In the front page of The Sunday Leader  of May 3  there appeared an article under the heading, "2006 investigation into Golden Key was squashed by then governor."

Among other paragraphs, the article contained the following:

"The Supreme Court's ongoing investigation into Golden Key has now uncovered evidence that Central Bank officials colluded with representatives of Golden Key to enable the company to keep functioning despite legislation that states that companies are not authorised to take deposits without a licence from the Central Bank." "Sunil Mendis the then Central Bank Governor subsequently announced that the investigations unit's report into Golden Key was unnecessary and unacceptable and the report was effectively squashed allowing Golden Key to continue functioning."

"These details emerged when a file containing the 2006 report was presented by the Central Bank at a court hearing to Justice Shirani Tilakawardena."

"Sunil Mendis' involvement in dismissing the investigation unit report is clear and the former governor now finds himself with a fair amount of explaining to do."

The statements contained in the above paragraphs which refer to me are absolutely false. These false statements were published without any verification from me.

The false allegations have caused me immense harm and great anguish. Since its publication I have been and am continuously receiving telephone calls from my friends, relations, persons I know and others questioning me on the contents of this publication.

As you know, matters relating to Golden Key are very much in the news and there is grave public anxiety over the same.

In the circumstances, it is necessary that I should act immediately, to protect myself, as much as I can, from the further injury and damage that will be caused to me by the false publication. A correction of the false statements by the publisher can only appear next Sunday because the newspaper is published only on Sundays.

I earnestly request you therefore to allow me, in keeping with the best traditions of your profession, to vindicate my position through your newspaper immediately.

As the matter is before court, I realise that I should, ordinarily, refrain myself from making public statements on the facts relevant to the case. However, this is an extraordinary situation where the offending article itself states that I have "a fair amount of explaining to do."

In all the circumstances stated above, I have no alternative but to immediately announce the true position relating to the false allegations. Nevertheless, because of the pending court proceedings, my vindication is limited to the essential minimum that has to be stated at this stage.

Accordingly with utmost respect and greatest deference to the Honourable the Supreme Court of Sri Lanka, I state that when I held the office of Governor, Central Bank I requested the Director/Supervision of Non Bank Financial Institutions Department, Special Investigations Unit to continue the investigations into Golden Key Credit Card Co., and in accordance therewith, such investigations were continuing at the time, I ceased to hold that office on June 30, 2006.

South Asia’s media under fire — IFJ 2008-2009 Report

A quarter century of armed conflict between the Government of Sri Lanka and the LTTE has badly eroded freedom of expression, especially in terms of the functioning of the media and the security of journalists and other media staff, records the International Federation of Journalists (IFJ) in its 2008-2009 Report on South Asia titled Under Fire.

It refers to the gruesome murder of The Sunday Leader Founder Editor Lasantha Wickrematunge as the incident that gave an ominous start to the year 2009 and records with horror, the kidnap style arrest of Sudar Oli Editor N.Vidyatharan as a signal of increasing dangers for journalists.

The IFJ’s latest report notes that Wickrematunge had earned a global reputation for his campaigning style and been honoured by world bodies for his commitment to transparency and probity in public life.

It adds that Lasantha Wickrematunge’s seemingly unending confrontations with the authorities were testimony to his ceaseless struggle for press freedom and the public right to know.

It adds that when awarding the UNESCO World Press Freedom Prize 2009, the 14 member awards jury had stated the choice was ‘almost unanimous’ as Wickrematunge was ‘clearly conscious of the dangers he faced’ and still chose to speak out.

“As the chair of the UNESCO jury puts it, “Lasantha Wickrematunge continues to inspire journalists around the world,” notes the report.

The report  records the killing of a Jaffna based journalist Puniyamoorthy Sathiyamoorthy in an artillery attack while reportedly seeking refuge in a government declared safe zone and the May 2008 killing of Paranirupasingam Devakumar, a MBC reporter based in Jaffna in a brutal knife attack during curfew hours.

The IFJ report lays special emphasis on the government’s attempt to resort to draconian counter terrorism laws to imprison and prosecute journalists and counts editor of the now defunct North-Eastern Monthly, J. S. Tissainayagam, publisher N. Jasiharan and his partner V. Vallarmathy under the Prevention of Terrorism Act, (PTA) without being produced before courts within the first 90 days of detention, as stipulated under the emergency regulations.

The report adds: “Tissainayagam may not be the first journalist in the world to be accused under counter-terrorism laws on the basis of his writing. But he is certainly the only one currently being held.”

The report recorded among the many impediments faced by the Sri Lankan media, “the inability of most independent media to access the war zone has ensured that there is a high degree of public uncertainty about the dimensions of the humanitarian problem.” And emphasises on the need to ensure media access to all relevant sites as an essential condition for durable peace.

The IFJ report also refers to attempts to muzzle the media through the introduction of regulatory provisions and gagging the electronic media, thwarted due to opposition by civil society.

Besides it records various instances of the state media and defence or government officials slandering journalists and giving them the LTTE label, thus causing serious security threats to them and even their families.

Referring to Jaffna’s media being under siege, the report notes that just when the people of Sri Lanka are most in need of professional and authoritative reporting from an area that is the epicenter of ongoing military operations against a separatist insurgency, the press in Jaffna is in a state of paralysis and the small media community in the city has been devastated by targeted killings.

The report adds; “Since Wickrematunge’s murder in January, the trickle of journalists fleeing the country has turned into a torrent.”

Aravind Adiga, bestselling author of The White Tiger on Sri Lanka’s war

One of the world’s oldest, best-organised, and nastiest terrorist groups is about to be wiped out in Sri Lanka. This sounds like good news, but the world may soon discover that the elimination of this particular terrorist group came at a terrible price. Indeed, in so many ways, what is happening in Sri Lanka — this small, sunny, and incredibly beautiful nation — seems like a perfect libertarian’s nightmare of what can go wrong in a war on terror.

Bloodshed has always seemed incongruous in Sri Lanka, an island nation of about 20 million people in the Indian Ocean that is a favourite tourist spot for visitors from Europe and England. Hidden far away from Sri Lanka’s gorgeous beaches and Buddhist temples, though, the fighting has been vicious: no one knows how many have died in a civil war that is a quarter of a century old, but estimates start at 60,000 and go up.

In the post-9/11 world, how could any foreign government possibly ask the Sri Lankan government to show moderation in its war against a terrorist group?

The civil war grew out of the island’s major ethnic fault line. Most Sri Lankans are Sinhala-speaking Buddhists, but a large minority are Tamils (who are Hindu and Christian). Many Sinhalese felt that the Tamils were unfairly favoured by the British, who ruled the island until 1948. After the British left, Sinhala nationalists tried to get even through heavy-handed attempts to impose their language and culture on the Tamils.

This led to tensions between the two ethnic groups. Things came to a head in 1983, in a vicious anti-Tamil pogrom during which thousands of Tamils were killed by mobs. A civil war followed, with the government taking on a variety of Tamil guerrilla groups who demanded a separate homeland for Tamils within Sri Lanka — the most important of which was the Liberation Tigers of Tamil Eelam.

The LTTE became a pioneer in terrorism — its cadres were some of the world’s first suicide bombers, and it developed a global financial network to shake down expatriate Sri Lankan Tamils living in Europe and Canada.

Run by a shadowy supreme leader named Pirapaharan, the LTTE became a lethal organisation that specialised in assassinations — including the 1991 killing of former Indian Prime Minister Rajiv Gandhi. What made its cause morally complicated was the fact that many Tamils did have genuine grievances within Sri Lanka, and felt that the fear of the LTTE was the only thing forcing their government to extend basic rights to them.

For this reason, “The Tigers” (as the LTTE were called) were never short of finances or manpower, and though the long civil war had its ups and downs, the Tigers managed to defy the Sri Lankan army and seized control of parts of the country’s north and east.

In 2002, a ceasefire was struck between the government and the Tigers, who pretty much ran a quasi-independent state in the north of the country. I made three trips to Sri Lanka during this ceasefire, including two to cover the tsunami, which struck the island in 2004.

Although the horror of the tsunami produced a brief desire for national reconciliation, tensions between the LTTE and the government still simmered, and most Sri Lankans expected the civil war to flare up sooner or later. It did resume last year, but what happened took everyone by surprise. The LTTE simply collapsed. An internal fight during the ceasefire weakened the LTTE, and Sri Lanka had a new president, Mahinda Rajapakse, who seemed determined to crush the Tigers once and for all.

The LTTE has also been the victim of a new global attitude towards terror. All through the 1990s, far too many governments could take a neutral — or even sympathetic — attitude towards terrorist groups, as long as they didn’t explode bombs in their territory.

 It was widely known, for instance, that Pakistan, a big recipient of US military aid, was channeling some of that money to fund Islamist terror groups operating in India — but who really cared in Washington? (India, for its part, was guilty of allowing the LTTE considerable access to its territory for a part of the 1980s.)

After September 11, 2001, attitudes changed. Governments across the world classified the LTTE as a terrorist organisation, and began to crack down on its international finance network. There is a new global consensus on terrorism — and the Sri Lankan government has used it to its advantage. Sri Lanka, a recipient of international aid and tourism, is dependent on the goodwill of the world community; and foreign governments, in the past, have asked Sri Lanka to negotiate with the LTTE rather than continue the bloody civil war. But in the post-9/11 world, how could any foreign government possibly ask the Sri Lankan government to show moderation in its war against a terrorist group?

In the past few months, the Sri Lankan army has won battle after battle against the Tigers in the north of the country and forced them out of their strongholds. Outgunned and outmaneuvered in traditional warfare, the Tigers have responded by exposing innocent people to danger — they have taken civilians hostage in a bid to stop the Sri Lankan army from shelling them. This cynical and brutal tactic has not worked.

The LTTE are all but finished. They have been driven into a toehold in the north, and will probably be wiped out in the next few weeks — but their defeat has come at a cost: The United Nations says it believes that numerous civilians have been killed in the fighting (one estimate puts the number at several thousand, but this is hard to verify).

Many displaced Tamil civilians now live in makeshift camps, and are threatened by malnutrition and disease. Has the Sri Lankan government been careful to minimise civilian casualties, as it claims, or has it cold-bloodedly ignored civilian deaths in its war against the LTTE, as many Tamil activists claim? We can’t know for sure, because whether or not the Sri Lankan government is guilty of slaughtering some of its own civilians, it certainly is culpable of another crime — a war against free speech.

Until relatively recently, Sri Lanka, a parliamentary democracy, had a press that was free and outspoken. This press freedom has been under threat for some time — and it has virtually been snuffed out during the recent war against the LTTE.  Journalists have been denied free and full access to the fighting in the north — and the world has little reliable information on what exactly is happening there. Those Sri Lankan reporters who question the way the army has conducted the war are labeled traitors by the government’s top ministers and bureaucrats. Threats, arrests, and murder follow.

In a recent statement, President Obama highlighted the plight of J.S. Tissainayagam, a Sri Lankan journalist who has been detained for over a year by the government. But the biggest blow against the Sri Lankan press was struck in January this year, when Lasantha Wickrematunge, editor of The Sunday Leader, a newspaper that had been critical of President Rajapakse, was killed by unidentified men on his way to work.

Wickrematunge, a fearless editor with whom I had worked during my visits to the country, had been anticipating the worst. After his death, his newspaper published a letter, written by Wickrematunge, accusing the government of being complicit in his death. This charge is denied by the government, but few journalists feel secure in the country. Wickrematunge’s successor at The Sunday Leader told an Indian newspaper: “If you dare to dissent, if you are critical of not the war but even the conduct of this war, you are immediately labeled a traitor.”

In its defence, the Sri Lankan government claims that press freedom exists in the country. It is true that dissenting voices can make themselves heard in Sri Lanka — but those who speak out against the government’s war on terror are incredibly brave men and women, who do so in an atmosphere of fear and insecurity.

On a recent trip to the country, I found that journalists whom I had known for years were edgy about discussing the war in the north, because of the real threat that they could be picked up by thugs, beaten up, or even killed. “We tend to censor ourselves now,” a Sri Lankan blogger told me.

What was most frightening to me was that most Sri Lankans did not seem to mind what was happening to their press. Most of them support the government’s war against the LTTE — and seem to view the journalists who question aspects of the war as unpatriotic members of society who deserve the worst that happens to them.

In vain, the journalists argue that if the government kills innocent civilians in the north, it will only engender bitterness and paranoia among the island’s Tamils — and that the civil war will invariably resume. In vain, they argue that justice is the most important weapon in the war against terrorists.

Too many civilians in Sri Lanka now seem to buy the government’s claim that anyone questioning their army is a traitor. A free and democratic country has become warped by a prolonged war on terror.

The world has issued the Sri Lankan government a blank check in its fight against the LTTE, and it is time now to tear up that check. President Rajapakse must immediately end the climate of fear in which journalists in his country operate; he must free reporters who have been falsely arrested; and must find and prosecute the killers of Lasantha Wickrematunge.

He must allow reporters, Sri Lankan and foreign, full access to the northern end of the island, so they can verify for themselves that Tamil civilians caught in the warfare there are living in humane, secure conditions. If he does not do so, the rest of the world has no choice but to assume that the worst of the charges levelled against his government are true — and act accordingly.

(Aravind Adiga is the bestselling author of The White Tiger, which won the 2008 Man Booker Prize.)

UK Tamil faces jail on terror

The head of the Tamil Tigers in Britain is facing jail after being found guilty last month, on April 17th, of two terror charges.

Arunachalam Chrishanthakumar, 52, supplied bomb-making equipment to the Tigers in Sri Lanka.

The electrical components had "an obvious terrorist purpose," jurors were told.  He was also found guilty of receiving documents for the purpose of terrorism.

 Chrishanthakumar, of Norbury, South London, bought equipment from an army surplus store in Southsea, Hampshire.

He could face a retrial after the jury failed to reach verdicts on three other charges at Kingston Crown Court, South West London.