Public Spends Millions Of Rupees For CPC Defence Team

• Defending Sri Lanka’s Hedging Deal

By Ashwin Hemmathagama  - Parliament Correspondent

Ceylon Petroleum Corporation (CPC) has spent Rs.13 million for air tickets and accommodation for the local participants engaged in the defence against the arbitration and legal proceedings that took place in Singapore and the United Kingdom. The cases were filed by Citi Bank and Standard Chartered Bank claiming dues from the controversial hedging agreement.
The team representing Sri Lanka at the panel of arbitration held in Singapore for the agreement signed with CitiBank, included former Minister of Petroleum A. H. M. Fowzie, former Chairman of CPC Asantha de Mel and the Directors D.C. Gunarathna, Mrs. K Wijethunga, M. Wijegunawardena, S. Rajakaruna, and Deputy General Manager Finance Lalith Karunarathna. Central Bank of Sri Lanka was represented by Director K. Ranasinghe.
The team which represented Sri Lanka at the panel of arbitration held in the UK for the agreement signed with Standard Chartered Bank included former Minister of Petroleum A. H. M. Fowzie, former Chairman of CPC Asantha de Mel and Directors Mrs. K. Wijethunga, M. Wijegunawardena, Saliya Rajakaruna and Deputy General Manager Finance Lalith Karunarathna. Central Bank of Sri Lanka was represented by Director K. Ranasinghe and Additional Director Dammika Nanayakkara. This team also comprised former Standard Chartered Employees Fizman Osman and Attorney-at-Law Ms. Kimali Fernando.
Minister of Petroleum Industries Susil Premajayantha in response to a question submitted by UNP MP Dayasiri Jayasekara for oral answers confirmed that he has not given legal fees but only what is spent for air tickets and accommodation. “The participants stayed at Amara Hotel in Singapore and Park Inn Hotel in London, currently known as Lancaster Gate. A few months ago the panel of arbitration completed examining the witnesses and their decision is due. However, the decision of the High Court of London was not in favour of the CPC. We have appealed.”
Raising a supplementary question, Jayasekara highlighted the precedence to take action against the officers and advisers of Central Bank of Sri Lanka, Chairman and the Directors of CPC for misleading the cabinet with wrong information that lead to the loss of millions of public money. “We still do not know the outcome of the arbitration and appeals are yet to be filed, which will increase the cost,” he said.
CPC entered into contracts with five banks led by SCB, since January 2007, to protect itself against rising prices.
When prices were over US$135 per barrel in mid-2008, the CPC was benefited as it had sought protection on the upside. But with prices crashing after that and settling at US$ 41 per barrel, the CPC ended up owing the banks, which resulted in the banks filing legal action.