Have Offshore Leaks Revealed Balapatabandi Achilles Heel?

  • International hunt on to trace source of Balapatabandi Funds
  • ‘Sudden’ Wealth has raised questions About CBK’s aide
  • Report Sent to Ministry of Finance & Australian Tax

By Faraz Shauketaly 

K. Balapatabandi

Revelations contained in the leaked Offshore Accounts Database by the ICIJ may throw light on one of Sri Lanka’s most enduring speculations. No amount of investigation could quite reveal the sources of wealth amassed by the Balapatabandi family. Kusumsiri Balapatabandi a jolly good southerner was a permanent Secretary to the President of Sri Lanka, at the time Chandrika Kumaratunga. Perhaps because of his close working relationship with the then President, Balapatabandi’s name was almost always mentioned in the same sentence as commissions and weapons supply- the war at the time raging incessantly.
Kusumsiri Balapatabandi’s son, Harendra Balapatabandi arrived in Australia in late 1997 early 1998 and he was almost instantly catapulted to economic stardom. Well, almost. Arriving as business migrants with appropriate visas he was accompanied by his wife Sakunthala.

For migrants from the business sector, they fared remarkably well: Between 1998 and 2004 the Balapatabandis’ spent in excess of US$ 4.2 Million on properties and their upkeep.

At the time when the younger Balapatabandi was asked to explain his apparent good fortune, he dropped his guard and told the media including The Sunday Leader that he was a “good businessman at home in Sri Lanka and that ‘anyone could buy a property with a mortgage in Australia.’ Of course this statement is only partially true and it is imperative that the Balapatabandi’s move to distance themselves from this growing furore over the source of their wealth and whether they indeed have declared their secretive holdings in off shore companies and bank accounts to the tax authorities either in Sri Lanka and or in Australia.

A regular from the Colombo hoi-polloi, with her own arrangements for her upkeep (and therefore unpaid by the Sunday Leader) told the Sunday Leader that it was “too much to expect any Sri Lankan especially, to believe that all these offshore accounts and companies’ are merely empty vessels”. The lady has a point: there was a necessary requirement to register and obtain these offshore companies – in the Balapatabandi case they are shown to have two at least. The more potent question is to ask whether as the Cabinet Secretary at the time Balapatabandi had the need, to establish an offshore company. Clearly he did not, as the offshore companies are registered by his son, who claims to be a successful businessman before leaving Sri Lanka and at the time he migrated to Australia.

A leading industrialist told The Sunday Leader that with turnover running into millions of dollars and huge sums of dollars – also in the millions – being spent on overseas purchases, they have not had a need for an offshore company to hold assets like shares or even control overseas bank accounts. “Sri Lanka has its own rules and in fact President Kumaratunga’s administration gave us permission to send capital out of the country to establish business overseas. There is no need for hiding assets if one can legitimately show the authorities where the money came from.”

The problem of course comes about when there is an urge to keep things away from the public gaze (and we dare say the gaze of The Sunday Leader in Sri Lanka). In keeping with these attempts The Sunday Leader understands that two independent journalists based outside Sri Lanka have launched their own investigation and have also contacted the Australian Tax Office.
Offshore companies and bank accounts are not as economical as it is to register a Sri Lankan company for instance.
The annual fees also mounts up –although some, as has been shown last week, in Sri Lanka, clearly did not pay for their addresses to also have a forwarding address like the appointment of nominee directors and shareholders.

Pacific Secure Lanka Limited is a company that was incorporated in October 2000 and lists Harendra Balapatabandi as the shareholder and the Director. It has an address in British Virgin Islands.
Blue Horizon Group International with an address in the British Virgin Islands lists both Harendra Balapatabandi and Lakshman De Fonseka as shareholders and Directors.

In the past Harendra Balapatabandi has claimed ownership of a company called Haren International Australia Pty Limited. That company was established in 1999 and in 2002 was renamed TWI Projects Pty Limited.

For Kusumsiri Balapatabandi the latest spotlight on his affairs – especially after a career in which he was Secretary to Sri Lanka’s President Chandrika Kumaratunga and later her High Commissioner in Australia, will be one which he could do without. For the Balapatabandi’ the eyebrows have been raised years ago when Mrs. Kumaratunga relied heavily on Balapatabandi.

The Sunday Leader acknowledges that there are perfectly legitimate uses for offshore companies and bank accounts and does not wish to infer any wrongdoingby any of the subjects named in this article.

The Multi Millions of a Sri Lanka Public Official’s Son: 

Kusumsiri Balapatabandi occupied office at the highest echelons of power: he was Secretary to President Chandrika Kumaratunga of Sri Lanka. After having won a largely sympathy vote – she had lost her eye in a bomb blast previously – Kumaratunga was elected to the Presidency with a majority that has yet to be bettered. Along with that majority came a new and hitherto unknown brand of power – all encompassing and where her near dictatorial powers were basically abused by most senior persons closest to her.

Balapatabandi for example, in one well reported instance, shoving to a side an official at the Bandaranaike International Airport who he perceived as having the ‘temerity’ to ask him who he was when he insisted on using the VIP lounge at Colombo Airport. His office had overlooked letting the Airport Management of the impending arrival of the chief Presidential boffin from a visit overseas and the senior civil servant was so greatly inconvenienced that he resorted to the high-handed methodology of shoving aside an official several rung slower than he – secure perhaps in the knowledge that he could get away with it.

Balapatabandi’s link to President Kumaratunga was such that when it came to his appointment as Chairman Sri Lankan Airlines, an extraordinary meeting of that company’s shareholders was called and the rule calling for Directors to be less than 70 years old was promptly waived aside. It is not as though Balapatabendi had the expertise of say a Peter Hill or a Ryan or Stellios or Fernandez or Branson in matters aviation that the national flagship carrier simply had no one but Balapatabandi to turn to. The move at the time shocked liberal minded and balanced members of the republic – but it mattered very little to Madam Kumaratunga who continued with the appointment.

The cynical would always maintain that the Lady President would push for the extra mile to grant her former Secretary the better positions: they may be warranted in their line of thinking. Balapatabandi for all the furore that was caused including the strongest objections from the then opposition of Ranil Wickremesinghe Secretary Balapatabandi was shipped off to be Ambassador in Australia. A convenient and cosy arrangement considering that his son was planning on – and he eventually did – migrating to Australia. At the time, speculation was rife that Balapatabandi senior too would settle in Australia after his stint as Ambassador. There is now no need to speculate, that is precisely what happened.

Inside of a space of 4 years Harendra Balapatabandi had entered the property business. Persuading his Australian Banks to lend him staggering amounts of monies Balapatabandi told anyone including the press that “anyone can borrow millions in the property business” Presumably he did not mean Lalith Kotelawala of the now ill famed Golden Key companies who is also said to have amassed considerable sums in Australia. Part of Harendra Balapatabandi’s claims explaining his huge borrowings in Australia are that he was from a ‘well to do family’ and had sold a property at the time for Rs. 20 Million. In Australian terms absolutely a modest AUD165,000.

Amongst the properties identified at the time as having been purchased by Harendra Balapatabandi are:

• 86, High Street, Glen Iris.  Demolished existing house and built a new house at a cost of approximately $ 280,000.

• 575 Burke Road, Hawthorn East.  Demolished existing house and built three new apartments at a cost of approximately $ 600,000. One of these was sold at $ 750,000.

• All of these homes have now been sold on as his company Harendra International is now known by a different name – TWI Projects.

 

 

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