By Frederica Jansz

President Chandrika Bandaranaike Kumaratunga has misused her position as former Minister for Finance and interfered with an investigation launched by the Sri Lanka Customs, ordering the Director General Customs to mitigate a forfeiture of a luxury vehicle illegally imported by Samadara Ranatunga, wife of Arjuna Ranatunga.

In what is clearly a criminal offence, the president falsely used her former powers as the Minister for Finance and backdated a letter she wrote to the DG Customs, dating the letter as December 4, 2001 (eve of the general election) when in reality the letter was written and delivered to DG Customs, Jagath Gunaratne, on December 18, 2001 -- well after the general elections and when Kumaratunga was no longer the minister of finance.

The new cabinet of ministers including the new Minister of Finance K. N. Choksy was sworn in on December 12, 2001. Yet, Kumaratunga falsely used her former power as minister of finance and issued a written order to Gunaratne, who followed the order despite the fact that it did not come from the minister of finance but from the president who did not hold such powers.

Kumaratunga wrote that she was exercising her powers under Section 164 of the Customs Ordinance, and ordered the DG Customs to mitigate the forfeiture of the luxury Mercedes Benz car imported by Samadara Ranatunga.

The fact of the matter is that Kumaratunga did not hold these powers anymore after the new minister of finance had been sworn in.

Jagath Gunaratne in his capacity as Chief of Customs was too afraid to ignore the presidential order, which was not only illegal but also criminal. Gunaratne instead, hand wrote instructions to his investigative officers to carry out the president's order and signed his directive dating his signature as December 18, 2001 -- the day he received the letter.

Gunaratne maintains that he did not act out of order. Quizzed by The Sunday Leader, he claimed to have received the letter only on December 18, 2001 despite the president having dated same as December 4, 2001. Gunaratne reiterated that the letter was possibly held up at the Presidential Secretariat and delivered 14 days late.

Yet, reliable sources working in Jagath Gunaratne's office confided that the Custom's Chief had been in a predicament when Kumaratunga's backdated letter was hand delivered to him on December 18, 2001. The Customs Chief had confided to other senior investigative officers that he did not know what to do but could not ignore the president's order. He finally complied but had said he was very uncomfortable in the knowledge that the president was acting completely out of order as she no longer was finance minister and so could not exercise such powers under Section 164 of the Customs Ordinance. Powers, which are available, solely to the incumbent minister of finance.

Asked how normal it is to waive the law in similar cases, Gunaratne said any minister of finance has the power under Section 164 of the Customs Ordinance to pass such a directive to the DG Customs. He added that even after Choksy took office as the minister of finance, he (Choksy) issued a similar letter over the importation of some tractors which were over 20 years old and ordered the release of the vehicles which had been seized by Customs and a mitigation of the penalty.

Gunaratne admitted that the letter from the new Secretary to the Ministry of Finance however was received on the same day it was signed by the minister of finance, and was not delayed by 14 days as in the letter written and signed by President Chandrika Kumaratunga and dated December 4, 2001.

Kumaratunga meanwhile in her letter to Gunaratne also wrote for added measure that considering the fact Samadara Ranatunga's husband Arjuna has brought fame to the country, the issue should be soft pedalled where the Ranatunga couple were concerned.

The Sunday Leader learns that as a result, investigative officers from Sri Lanka Customs were ordered by their Director General not to physically seize the super luxury Mercedes Benz but to leave the Ranatunga couple alone.

The fact of the matter is that it is Arjuna and not Samadara who has brought fame to this country. Why the president should intervene and twist the law to suit a spouse who has committed an offence is puzzling. At the time the president conveyed her order to the DG Customs, Arjuna Ranatunga had also contested the general election of December 5, 2001 as a candidate for the Peoples Alliance.

Kumaratunga's order stated that a penalty not exceeding Rs. 1 million be collected from the Ranatungas "as in other similar instances."

The president was referring to one other instance when the now infamous Lohan Ratwatte, son of Gen. Anuruddha Ratwatte sold a duty free permit that had been granted to his travel firm, 'World Air (Pvt) Ltd.' under the duty concession scheme of the Ceylon Tourist Board. The car permit in question, Ratwatte sold to the owner of Bettans Group of Companies.

In this instance, on information received by Sri Lanka Customs, the jeep was seized. Political pressure however once more forced investigative officers to drop the case. The jeep was released and a penalty of Rs. one million collected. Customs however released the jeep on the condition that it would have to be owned by Ratwatte's travel firm and not by the owner of Bettans and could not be re-sold to any other group or person. These conditions are still applicable.

In the case of the Ranatungas however the president ordered that Customs to allow the Mercedes Benz car to be registered in the name of Samadara Ranatunga. The presidential directive is unprecedented as the vehicle by law should be registered only under the management of the Koggala or Tissera Beach Hotel.

Assistant Director Customs, Nanda Kodituwakku who initiated and headed the investigation into the Ranatunga case told The Sunday Leader he could not continue at Sri Lanka Customs due to the constant political interference and pressures brought upon him when working on such investigations. Disgusted and fed-up, Kodituwakku finally migrated overseas late last year.

The Mercedes Benz car was imported after Samadara had illegally used a duty free permit given by the management and Directors of Koggala Beach Hotel. The permit in question was given to the hotel management under the duty concession scheme of the Ceylon Tourist Board and by law is not transferable.

Kumaratunga in her letter to the DG Customs in fact says as much. The president has written that the importation of the Mercedes Benz car under duty concession of the Ceylon Tourist Board was used by Mrs. Samadara Ranatunga. Despite the illegality of the transaction, Kumaratunga chose to bend the law and ordered investigative officers at the Customs Department to follow suit.

The Sunday Leader has found that Mrs. Ranatunga is not an employee of the Ceylon Tourist Board or Koggala Beach Hotel and therefore is not entitled to such a permit.

The Customs investigation found that the duty free permits allocated by the Ceylon Tourist Board were given to the management of Koggala and Tissera Beach Hotel. Both enterprises are under the same management. Four of these permits were sold by the beach hotel management for a sum of Rs. 1.4 million each to a well known private insurance group.

The directors of Koggala and Tissera Beach Hotel however have claimed in their statement to Sri Lanka Customs that the permit to Samadara Ranatunga was given free of charge as they share a close friendship with both Arjuna and Samadara.

By Frederica Jansz

Chairman, Interim Committee for the Board of Control for Cricket in Sri Lanka, Vijaya Malalasekera, last week attempted to explain the position with regard to the selling of television and radio sponsorship rights to Taj Television. Malalasekera took the initiative following The Sunday Leader expose on the BCCSL last week.

The press conference included other members of the Interim Committee, namely Anura Tennakoon, CEO Sidath Wettimuny, Kushil Gunasekera, Manil Jayasinghe and Sujiva Mudalige from Price Water Cooper House.

Malalasekera in his defence reiterated that our story regarding the sale of these rights to Taj Television was not factually correct. He argued that they had secured the "best possible deal" for the BCCSL when they abruptly cancelled a contract with World Sports Group - Nimbus and within 14 days, on November 2 last year, signed another, with Taj Television .

Malalasekera explained that the deal with WSG Nimbus had to be abrogated because WSG - Nimbus repeatedly delayed on making payment for Sri Lankan cricket tours. The result he said "was horrendous and it became impossible to maintain a working relationship with WSG - Nimbus."

While we sympathise with Malalasekera's predicament, our argument is that WSG Nimbus,

a) never defaulted to make payment. In fact the company had paid the BCCSL a total of US $ 10.2 million at the time their contract was abruptly terminated.

b) The BCCSL stands to lose over six million US dollars because of their hastily signed Memorandum of Understanding with Taj TV. To be more precise, Taj TV will pay a total of US $ 10,740,000 for 14 cricket tours as against WSG - Nimbus which would pay US $ 16,900,000 for 14 cricket tours (out of which WSG Nimbus has already paid US $ 10.2 million to the BCCSL. (See box for BCCSL explanation on how they have not lost out on over six million US dollars.)

c) Furthermore, in the agreement with Taj TV, a total of US $ 7,075,000 is to be paid for the Sri Lanka/England/India tour as against the figure quoted by WSG Nimbus for this same tour is at US $ 5,900,000. The point we are making here is that this tour remains unconfirmed. In which case, if cancelled, the BCCSL will be left with a mere three million US Dollars over the next three years. However if the Interim Committee had maintained the contract with WSG Nimbus and this same tour was cancelled the BCCSL would still have had over US $ 11 million in its kitty.

d) Vijaya Malalasekera when quizzed on this aspect at the press conference reiterated firmly that the tour in question has been confirmed. The Sunday Leader however maintains that the Marketing Director, J. Kudahetty of the BCCSL categorically told this newspaper that this tour remains unconfirmed.

In addition, CEO for the BCCSL, Anura Tennakoon, claimed on the insistence of Malalasekera that he had it in writing that this tour is confirmed. He however said the letter was at his office which he could make available to The Sunday Leader after the press conference. After the media briefing we asked Tennakoon to fax this letter to our office. He suddenly however produced a printout of an e-mail from a representative of the English team, which was addressed to him. In this e-mail the English team has given a tentative confirmation; however it is clearly stated in writing that India remains unavailable. Asked if the TAJ TV payment for this tour would drop in the event India does not play, Tennakoon admitted that it would most certainly happen.

The e-mail is not an official confirmation of the Sri Lanka/England/India triangular series. We rest our case.

Tennakoon by the way refused to let The Sunday Leader have a copy of this e-mail saying it was "confidential." Why it should be confidential if the tour has been confirmed remains puzzling. Furthermore, Vijaya Malalasekera promised that this newspaper would be given a copy of the letter confirming this tour. We are still awaiting proof of such confirmation.

Malalasekera meanwhile claimed that there has been no monetary compensation whatsoever sought by WSG Nimbus over the abrupt abrogation of their agreement with the BCCSL. We have pointed out to Malalasekera that the notice of arbitration, initiated by WSG Nimbus in Singapore on October 19 last year and faxed to the BCCSL the same day, clause no 9.3 section (iv) states that WSG Nimbus is seeking "damages for losses occasioned to WSG Nimbus by reason of your wrongful conduct and (v) interests and costs."

Malalasekera argued that no specific cost has been indicated. He however admitted that "everyone has the right to seek financial compensation; it can range from Rs. 2 to Rs. 200 million." He finally conceded that WSG Nimbus in all probability would sue the BCCSL.

Our story last week stated that WSG Nimbus is seeking a financial compensation of US $ 20 million from the BCCSL by way of damages. We based our figure on statements made by representatives from WSG Nimbus who assert that they have paid US $ 10.2 million to the BCCSL; they will seek financial compensation against the loss the company has incurred as a result of its contract with the BCCSL being abruptly terminated.

Malalasekera also asserted that WSG Nimbus was incorporated as a company in Singapore with an issued share capital of only USD2.

While Malalasekera is perfectly right in making this statement, he could not strangely enough say what is the issued share capital of Taj Television. The fact remains that irrespective of whether WSG Nimbus lacks good credit ratings, the company did pay US $ 10.2 million to the BCCSL. We repeat that WSG Nimbus never defaulted on a single payment to the BCCSL. They only delayed to make payment.

Malalasekera was unable to coherently explain why the Interim Committee did not seek arbitration to resolve this issue with WSG Nimbus as per the agreement the BCCSL had signed with the company. He admitted that legal costs to fight the court battle with WSG Nimbus in Singapore have so far cost the BCCSL 40,000 Singapore dollars; he could not name a figure the BCCSL has incurred so far to hire local lawyers to fight their case in Colombo.

Asked if Muttiah Muralitharan's historic feat of taking 400 wickets was telecast 'live' worldwide by Taj TV, Malalasekera at first said, "I do not know," but added later "I am sure it was." Told specifically that it had not been telecast 'live' worldwide, Malalasekera retorted that it would have been available on satellite television.

Malalasekera also argued that a deal with Dilmah Teas having confirmed a team sponsorship fee of US $ 3.30 million is far more beneficial than the agreement with WSG Nimbus which stated the television company would pay 85% of sales commissions on foreign sponsorship deals received by WSG Nimbus which were over and above US $ 37,100,000. The latter figure was arrived at by WSG Nimbus after they would deduct US $ 10,000 for production costs.

Malalasekera asserts that in contrast the BCCSL does not have to bother with production costs with Taj TV. According to the MoU the BCCSL has signed with Taj TV the latter will incur production costs at no expense to the BCCSL. Malalasekera also disregarded a letter from the Attorney General's Department which has expressed complete satisfaction at the manner in which the WSG Nimbus contract was secured by the former Executive Committee of the BCCSL. He said that in all probability the AG's department had not been presented with the whole case in its entirety.

The new agreement with Taj TV also has no provision unlike in the agreement with WSG Nimbus for 'Internet Rights' which means to develop, manage and operate an Internet Website based on the matches or for the BCCSL to incorporate content including video and audio coverage of the matches on any such site which will be distributed to users on the internet or the worldwide web. Malalasekera when quizzed on this said these aspects would be negotiated with Taj TV in the future.

One aspect we stand corrected in our story last week is when we maintained that the Interim Committee of the BCCSL had violated a restraining order secured in Singapore by WSG Nimbus banning the BCCSL from entering into any other television of radio sponsorship rights with any other rival company. The BCCSL, according to its Counsel, Dinal Phillips, had secured an extension until November 7, 2001 of the enjoining order it had won in the Colombo High Court on October 16, 2001 which in effect prevents WSG Nimbus from issuing such an order.