Exposed: The Godahewa “Merry Go Round”
- Nalaka Godahewa Asked for a Favour: “Resign to make room for Indian Company” “Deal with me only” – Godahewa
By Faraz Shauketaly
Sensational new information has emerged that Chairman, Sri Lanka Tourism, Dr. Nalaka Godahewa, called on three directors of Lanka Hospitals and asked them to “agree to resign” as a favour to himself! Asoka Pathirane, one of three directors asked to resign, has charged that Nalaka Godahewa has acted without the authority of the Sri Lanka Insurance Board (SLI) in trying to accommodate nominees of Fortis Healthcare.
Asoka Pathirane has taken his complaint directly to President Mahinda Rajapaksa stating that Godahewa has acted outside of his mandate. The President has openly said that it has been the intention of his government to bring the former Apollo Hospital to full government ownership and that to that end the hospital management were looking at having a technical partnership in order that Sri Lankan staff can get further training.
Dr. Godahewa is a member of the Board of Directors at Lanka Hospitals as well as being Chairman, Sri Lanka Tourist Board. The Sunday Leader’s sources in India have revealed that Dr. Godahewa met with representatives of Religare, an Indian company related to the Fortis Healthcare group in connection with their planned investment in Sri Lanka.
Sources at the Treasury said that Dr. Godahewa was entrusted by the government to persevere in the direction of obtaining control of the near 29% Distilleries stake in Lanka Hospitals in favour of a state institution like the Bank of Ceylon – entirely in keeping with the Mahinda Chinthanaya – the official manifesto of the Government of Sri Lanka.
Lanka Hospitals is primarily owned by Sri Lanka Insurance, which in turn is owned by the Treasury Secretary. The Board of Directors of Lanka Hospitals is composed of nominees made by the Board of Sri Lanka Insurance (SLI). The normal procedure would be for the Treasury Secretary as the principal shareholder, to ask the board of SLI to nominate names to serve on the Lanka Hospitals PLC board (LHPLC).
Dr. Godahewa, after meeting with the Religare team at the Cinnamon Lakeside Hotel for breakfast after his workout at the gym downstairs, proceeded to attempt a meeting with the Ministry of Economic Development headed by Basil Rajapaksa for the Indian investors. Basil Rajapaksa displayed Ministerial interest: he asked that the group meet with officials of the BOI as a first step towards their investment in Sri Lanka. Dr. Godahewa has denied any knowledge of this Group, calling these allegations a “farce.”
It is alleged that Dr. Godahewa then proceeded to establish his link with Harry Jayewardena’s Distilleries Company. Harry J’s dislike of Godahewa is known to many going back to the days when Harry employed Godahewa as CEO of Sri Lanka Insurance – prior to a Supreme Court order to return SLI to the Treasury. In the pursuit of a deal however, many a shortcoming is merely set aside. In that spirit, Godahewa established contact with an old friend now heading yet another fairly new Harry J controlled company. Chaminda De Silva, a Director at Continental Insurance Company, confirmed knowing Dr. Godahewa but denied playing the role of “go-between” or being used as a conduit, negotiations started in earnest.
The strategy that Godahewa gave Fortis was simple: buy into Lanka Hospitals through the Distilleries shareholding, thereafter proceed with a negotiation that would enable Fortis to have three seats on the Lanka Hospitals board. The ultimate carrot being dangled was that Fortis would be able – in time of course – to obtain a de-facto management contract at the former Apollo Hospital.
Telephoning three directors of the company who he perceived as “easy touch” Godahewa proceeded to ask them to “do him a favour.” “You know what has happened no?” he asked, “Fortis has bought a stake in the company. We need to give them at least three seats.”
All three immediately agreed to give their consent – but queried how odd it was that their appointments were notified by the Treasury and confirmed by SLI directors and yet this “request” to step down was coming from another director – in the same class and rank as themselves.
Not wishing to antagonise those that had voted them in, the three promptly resigned even though one of them told The Sunday Leader, “I did so thinking that the Treasury was happy,” that the Hospital had mostly been turned around in terms of operational profitability.
We asked Asoka Pathirane, a former Director of Lanka Hospitals, why he had abandoned the government in its hour of need. Mr. Paithirane’s connections to the ruling SLFP are impeccable and he worked tirelessly to ensure the return of the SLFP led by Mahinda Rajapaksa in 2005.
“Godahewa called me and asked me to do him a favour, saying that they had to make way for the Indian company. Even though I fully endorse Article 28(D) of the constitution and wished to continue in service to make my own contribution to the progress of this country, I agreed because Godahewa made out that I was in fact doing the country a service. I asked him why Mohan De Alwis, CEO of SLI did not contact me as is the normal practice.
“It was only after I read about the Fortis share deal that I realised that this transaction lacked the backing of the government as the principal shareholder. This prompted me to notice His Excellency the President at what I now consider to be a high handed, singularly ultra-vires action of Nalaka Godahewa. He led me on a super ‘merry-go-round.’”
The actual resignation notification ought to have come from SLI or in the alternative from the Treasury. Sources at SLI confirmed that Godahewa was not authorised by the SLI board to ask directors at LHPLC to resign. That position if legitimate would make Godahewa liable as having acted ‘ultra vires.’ For a man of three different disciplines as well as a seasoned veteran of having served on a number of boards both in the public sector and the private sector for many years, it is difficult to see how he could have acted outside of the mandate entrusted to him as a patriotic officer of the Rajapaksa administration.
Treasury Secretary Incensed
In the backdrop of these current developments, Treasury Secretary Dr. P.B. Jayasundera, summoned Tourism Chief Godahewa and let the Chairman know in no uncertain terms of his displeasure. With various allegations being made Dr. Jayasundera told Godahewa that “nothing is happening at Tourism, except the leaking of misinformation to the press, blaming me for your lack of progress.” An irate Dr. Jayasundera added, “There are options available to you if you can’t perform.” Dr. Godahewa, who came to the Tourism sector without any direct expertise of any involvement in the industry, attempted to shift the focus away but the veteran Treasury Secretary was focused: “I will talk to all mega project investors myself. Go.”
For the Chairman, whose catchphrase, “Deal with me only,” is fast gaining a reputation, the merry-go-round appears to have run into trouble. The question now being asked is exactly when the merry-go-round will slow down allowing Godahewa to jump off or be pushed out.
Fortis Healthcare Collaborates With Oasis
Fortis Healthcare hot on the heels of their purchase of the 29% Distilleries stake for Rs. 4 Billion, recently also concluded a collaboration agreement with the Oasis Hospital. The agreement to set-up a high-tech cardiac unit cost the Indians no money. Instead Fortis will be in charge of the human resources aspect and drive Indian surgeons to the Oasis Cardiac Unit. This may well result in a conflict of interest position with Fortis getting an insight into Lanka Hospitals’ operations where there too, Fortis is due to invest in training of the various healthcare professionals.
I have no clue and I can only think of one thing. That is the sale of the Lanka Hospitals’ minority stake by Distilleries to some other private party. That was direct negotiation between two private companies. Distilleries board should know best. 100% with confidence I have no involvement. This story is an absolutely farce. You can state that I categorically have no involvement on these stupid allegations.