By Faraz Shauketaly
Affidavits filed by Kirmali Fernando in the hedging case
and Nihal Sri Ameresekere in the objections to P. B.
Jayasundera’s attempt to return to public service, have
again, turned the spotlight on the twin shackles that
threaten to conspire the progress this country can make
in the important post-war period. It is especially
significant in the wake of the trying time the
government had in securing a US$ 2.5 billion stand-by
facility from the International Monetary Fund (IMF).
Information of possibly the gravest importance not in
the public domain previously has now come to light after
the publication last week of the Kirmali Fernando
Affidavit. Certainly Fernando’s credentials are
impeccable and her knowledge of the events of
significant value — she had worked for Standard
Chartered Bank for over five years in a senior position
and is now a banker of substance — heading another
locally held private bank.
Grave stroke of luck
fact that these affidavits were requested by the Supreme
Court is in itself, a grave stroke of luck for the
Republic of Sri Lanka: no less a person than the
Attorney General opposed the very petition presented by
Nihal Sri Ameresekere. Ameresekere, fortunately for the
public interest, objected strongly and made forceful
presentations which resulted in the Court directing that
eight persons provide affidavits within two weeks.
serious indictment of the strategy that the People’s
Bank is pursuing — opposing every attempt to object to
the public interest litigation instituted by the
formidable duo of Vasudeva Nanayakkara and Nihal Sri
Ameresekere — Kirmali Fernando’s affidavit sheds further
light on the operational management at Sri Lanka’s No. 2
candid advisory to its Board of Directors People’s Bank
makes light of the non-collection of the signed ISDA. In
fact, the CPC did not have the agreement of the Attorney
General at that time. It opened the People’s Bank to
Standard Chartered Bank appears to have gone into
hibernation with the release of Fernando’s statement.
Our attempts to contact Standard Chartered Bank have
been ignored by none other than the beleaguered CEO
beggars belief that Clive Haswell, the CEO of Standard
Chartered Bank, has apparently ignored — we hope at his
peril — the guidelines laid out by SCB for their
employees. And Clive Haswell is, an employee, after all.
These guidelines remind all their employees that, “the
bank is a guest in each country and can be asked to
Haswell, it appears from Fernando’s sworn affidavit, has
had the temerity to interpret for his colleagues as to
how the Central Bank of Sri Lanka would interpret the
state banks’ violations of rules that govern banks in
this country. On what basis does he do so?
being guided by sources close to the Central Bank and or
the Treasury in his almost flippant disregard of the
rules that govern his very existence in this country?
Significantly despite Haswell’s almost in-built
reluctance to speak to the press, it has now been
disclosed that in his affidavit, Nihal Sri Ameresekere
has included extracts of telephone bills — which he asks
the Supreme Court to verify through the relevant
authorities — which reveal calls between Haswell, P.B.
Jayasundera and Citibank. If these telephone bill
extracts are proven to be authentic they would prove
that a “nexus or collusion” existed between Jayasundera,
SCB and Citibank.
Voluptuous appetite for profit
Haswell’s voluptuous appetite for profit overrode the
rules and guidelines. Indeed, it places the Standard
Chartered Bank in a most untenable position. For an
international bank of some significance they have acted
deplorably to the grave cost of the country’s foreign
insult to injury we have as its CEO a man who the
affidavit states is said not to have any expertise in
risk management or as a CEO.
fact, the bank — led by Clive Haswell has not endeared
itself to this country with their actions: it is time,
is it not, for the Central Bank to revoke the banks’
license and ask them to leave forthwith.
Our questions to the Standard
29th July 2009 by email
Mr. Clive Haswell
Standard Chartered Bank
note that when I introduced myself over the
telephone yesterday you chose to remain silent
keeping the line open. Nevertheless the following
questions do require your answers. Hanging up and
diverting your mobile phone will not make the issues
CEO why did you go ahead with selling these
contracts to the CPC without the signed ISDA
contract in place?
You are alleged to have stated that “the risks were
worth it” — now that the SCB is involved in a
veritable imbroglio, do you agree with your
statement? Are you willing to risk your banks’
licence and your reputation as a banker?
What experience do you have in international oil
What knowledge do you have that allows you to
interpret how the Central Bank would rule on the
state banks’ violation of the rules governing banks?
Were you guided by P.B. Jayasundera, the former
Was Kirmali Fernando’s departure from SCB employment
tantamount to “constructive dismissal?”
look forward to receiving your response which may be
published in future articles.
GSM +94772 300 305
Response from the Standard Chartered Bank
We refer to your email query on July29, please note
— As the matter is in court we cannot make any
Thanks and regards
No conflict of interest — Ashantha de Mel
a new development, Ashantha de Mel, the former
chairman of the Ceylon Petroleum Corporation, has
clarified that in his view there is no conflict of
interest regarding his daughter.
Mel provided us copies of letters which are
reproduced here. He said that his daughter was not
employed by SCB — rather she had an internship for a
brief period from January 2, 2008 through February
22, 2008 and was paid an honorarium of Rs 15,000 per
month to cover her basic expenses.
The documents also show that Miss De Mel gained
experience in five different areas of the bank’s
operations. Her speciality interest during her
internship was in connection with identifying
opportunities in Carbon Trading for SCB.
Mel also pointed out that the first hedging contract
was taken out in February 2007 — whereas his
daughter’s internship commenced in January 2008 —
which is 11 months after the first hedging contract
was taken out.
The Attorney General’s objection
Attorney General Mohan Pieris, joined the counsel
representing the five banks in objecting strongly to
Nihal Sri Ameresekere’s latest action in the hedging
transaction — notwithstanding the fact that these
actions were in the public interest.
Attorney General’s role includes one of Amicus Curiae —
quite literally “friend of the court.”
curiae is a legal Latin phrase, literally translated as
“friend of the court,” that refers to someone, not a
party to a case, who volunteers to offer information on
a point of law or some other aspect of the case to
assist the court in deciding a matter before it. The
information may be a legal opinion in the form of a
brief, a testimony that has not been solicited by any of
the parties, or a learned treatise on a matter that
bears on the case. The decision whether to admit the
information lies with the discretion of the court.
According to the Bar Association Journal, “the Attorney
General must have due regard to the desire of any
government to realise its legitimate aspirations and the
political problems ministers have to contend with.
However it is his duty to advise the government to act
within the law.”
Court, the AG assured us all, that the public interest
was well looked after by him and that he was defending
that very notion in the courts of London and the
arbitration proceedings in New York and London.
However, it is just as well that Nihal Sri Ameresekere,
the public interest litigator and a certified fraud
investigator, had an appetite for public interest
and simply because of the prayers and pleadings that
Ameresekere made to the Supreme Court, notices were sent
to eight persons asking them to provide by way of
affidavit their knowledge of the events surrounding the
significantly, the Supreme Court granted Ameresekere his
pleadings to notice eight key persons despite those
persons not being named as respondents, but who were
involved in this most infamous of transactions and
despite not having yet heard the objections by other
counsel on the issue of “time barred” actions.
Without recourse to the affidavits of these eight, the
republic may well have been placed in a position.
objected to Ameresekere’s actions on the grounds that
his action is time barred, but also wanted Ameresekere
to “rest his head,” assuring the Court that the public
interest was well looked after.
is most galling of all, is the apparent disregard of the
amounts of monies that Ameresekere says will be lost
even further if his pleadings are not given a hearing.
He estimates the eventual bill to the country at US$ 800
million, monies he says the public can ill afford.
would have been best if — and the CJ suggested as much
but only in jest — the AG recognised the angles being
presented by Ameresekere and acted as one — for indeed,
both seek the same result: to safeguard public property
recent past lawyers appearing for Leader Publications
have been called traitors. Some in the legal and
commercial fraternity are debating who exactly
constitutes a traitor? There are only two sects of
people in this country: those who either love the
country and those who don’t. Those who love the country
also love to uphold the true values and rights enshrined
in the Constitution of this country without let or
Wither the National Interest?
and Nihal Sri Ameresekere
Objecting vehemently to the application made by P.B.
Jayasundera asking him to be released from the
undertakings given by Jayasundera to the Supreme Court,
Ameresekere in his preliminary objections has asked the
Court to consider rejecting the application “in-limine”
stating that the application is misconceived in law and
devoid of any merit.
– Latin for “at the threshold” — is a motion made before
the start of a hearing requesting that the judge rule
that certain evidence may, or may not, be introduced.
Ameresekere provided a 36-page affidavit on his
objections to Court. Taking issue with Jayasundera’s
letter of July 25, 2008 — Ameresekere said it was
“knowingly and willfully” suppressed at that time from
the Supreme Court
Jayasundera had expressed regret and tendered an
unreserved apology to the Supreme Court by affidavit in
October 2008 for having held office after the most
severe castigation that the Supreme Court had given him.
Jayasundera had even admitted by letter dated 3.6.2009
that there had been adverse findings against him by the
previous case Jayasundera had not pointed out to the
Court that all material facts were not taken into
account and he had not pointed out in any event what
those facts were.
Ameresekere’s affidavit is gripping reading. He goes on
to state that Jayasundera did not plead the importance
he now pleads, of his service to the public sector nor
does he plead of the purported manner in which he
conducted himself in public service — which he now does
— after nearly one year.
Jayasundera taken nearly a whole year to figure out that
he was an asset to the public service contrary to what
the Supreme Court had found against him? Has it taken a
whole year (nearly) to figure out that he behaved with
probity and fairness in his public duties?
Ameresekere goes on: He points out that in the Judgment
dated 21/7/2008 the Court stated that Jayasundera’s
action in surreptitiously inserting a monopoly clause in
the LMS case, was struck down by the Court of Appeal as
being illegal. Ameresekere was even more cutting in his
comment on the following statement given by Jayasundera:
“throughout my career in public service I had maintained
the highest level of honesty and integrity and ....
discharge .... duties with utmost commitment in good
faith and in the best interests of the country and never
compromised under any circumstances the public interest
Ameresekere said of this: “PALPABLY FALSE”
Vasudeva Nanayakkara on the Kirmali Affidavit
Ameresekere’s actions have been eminently vindicated: it
helped throw light into the circumstantial backdrop that
existed in this case.
only sorry that the People’s Bank continues on their
defensive strategy, quite contrary to the goals
envisaged during the set up of the People’s Bank.
now coming out brings into sharp focus the actions of
the Attorney General. The Attorney General should have
sought the assistance of Ameresekere and worked in
tandem with him.
The sequence of events leading to hedging
06/09/2006 Presentation by the Governor of the
on Oil hedging to the Cabinet of Ministers
06/09/2006 Cabinet decision on the above
presentation to appoint a
Study Group consisting of officials and to report
back to Cabinet
02/10/2006 Ashantha De Mel appointed as
19/10/2006 Appointment of a Study Group by
Secretary to Treasury, P.B. Jayasundera
16/11/2006 Study Group Report presented
16/01/2007 Cabinet Memo submitted by Ministry
of Petroleum on the basis
of the Study Group Report
17/01/2007 Cabinet decision put off for next
24/01/2007 Cabinet decision made and approvals