POLITICS

However, he was quick to point out that time was running out and that the government needs to act fast. Time definitely is running out, the IMF sponsored Stand-by Facility that came to Sri Lanka's rescue last year has been suspended since the first tranche of SDR 103.35 million was granted mid last year.

It was suspended due to the PA government deciding that it was more important to rule a rotting economy than to take action to turn the ship around. The last straw in the deal was the pact with the JVP. The IMF facility however would not be open forever. It will expire on June 19, 2002, unless the new government puts the criteria right and the IMF releases the funds.

For that, the key word is 'reforms,' across the board, no holds barred.

"The economy has lost its growth momentum," Singh observed, warning that Sri Lanka might be foregoing advantages raked down the line since GDP growth was minus 0.6% last year. He highlighted four areas of concern.

One, the negative growth rate would be far higher on a per capita basis. Two, inflation is in double digits, unusual for an economy in recession. Three, public debt is 100% of GDP. According to Choksy, the figure is Rs. 1,464 billion for last year. And four, the budget deficit is 10% of GDP. To be precise last year it was 10.5%.

The IMF prescription for the ailments is to fast track the reforms process. On that front too Singh laid emphasis on key sectors. Top on the list is the public sector, which according to the IMF economist, needs to be consolidated financially. How that can be done is through pruning of staff and funds.

Muttukrishna Sarvananthan, an economist with the International Centre for Ethnic Studies has argued that the bloated private sector is the biggest impediment to economic revival. "Sri Lanka's public sector deficit is among the highest in the world," Singh joined the chorus last week.

The IMF Stand-by Facility in fact set strict limits to public sector borrowing last year, but it is very unlikely that they were met even marginally. With public sector debt ballooning, the economic ills of the country have multiplied.

Much of the borrowings are from domestic sources which meant that the government is taxing the savings of the private sector as it cannot manage its own affairs. And most of the expenditure is not targeted at development work but at meeting recurrent expenditure.

A glance at the Vote on Account presented two weeks ago, will stand witness to this. Of the monies allocated, Rs. 19,059 million is for recurrent expenditure while just above half that amount is for capital expenditure. Last year, while government revenue was 17% of GDP, expenditure was 26%. These are imbalances that need correction. That would be painful and only a strong leadership can withstand the short-term political liabilities of such an endeavour.

The second area of concern in Singh's list of rectification is the most controversial - the financial sector. He argued that wherever governments have huge stakes in the banking sector, such banks carry loans and other facilities given under the influence of the government. Higher the percentage of such non-performing loans, higher the weakness of the sector. He termed the concept of government owned banks as "a monumental illusion" of that past and that the government needs to look at privatising or selling off its ownership in the state banks.

"It is no longer a question of ideology, it is a lesson from the past," Singh opined. He further argued that the Central Bank should be made independent and tasked with only controlling inflation. Such independence would also create a mechanism of accountability.

The IMF Deputy Director also highlighted that the labour market and power crisis need to be looked at seriously. The same two subjects have figured prominently in the hit list that trade chambers have been haggling over in meetings with government officials.

Singh observed that for the economy to turn around, investments, both domestic and foreign, need to flow into the market. He forewarned that the crisis that has plagued the Sri Lankan economy can result in a prolonged stagnation. "It is no less serious than it was in the East Asian countries."

But he gave the government credit for pursuing the peace option and the economic option simultaneously.

By the looks of it, the government is hoping that the peace process, gathering momentum, will send the right signals to donours as well as lenders. And that such a move would subsidise any shortfall created by half-baked reforms.

If the peace initiative results in channeling hard currency in to the country, at least some of the government's woes would be allayed. Money brokers have argued that the Central Bank has been holding the exchange rate down artificially. Some have remarked that if the bank releases its hold, the rate might jump to Rs. 120 per dollar.

However, the recession has deflated import demand to an extent, allowing breathing space.

The IMF has been holding a series of meetings with top decision makers (see box) and has conveyed its views. Singh who has been leading the delegation asserted that whatever reforms that are put in place needs the support of the population for them to succeed. That is where the big question mark is.

"It is a formidable agenda. But the longer you wait, the cost will increase," he warned. He revealed that the new government has expressed its desire to continue with the Stand-by Facility, but stopped short of divulging details.

If the government is ready to reactivate the facility, what it means is that it is ready to set the reforms in motion in accordance with the agenda. On top of that, it would have to carry out other reforms that have become necessary due to the present economic scenario. The government has been holding a series of discussions with the chamber and a high ranking source revealed that they were cautiously optimistic, like the IMF. Two weeks back, chamber officials met with the Ministry of Power and Energy to discuss solutions to the power crisis and soon afterwards, Chamber Chairman Chandra Jayaratne wrote to members requesting them to continue internal power generation capacity to the maximum. It was a gesture of support for the government. But how long such support would be forthcoming and whether the same would be true of the voting masses is not sure yet.

The reforms are painful, indications are that the government is taking at least some of them. The real test will certainly come after March 20.

CBK’s hand in Mathurata conspiracy

By Frederica Jansz

The names of Presidential Secretary Kusumsiri Balapatabendi, Chief of the President's Security Division Nihal Karunaratne and PA MP Ajantha de Zoysa have transpired in a complaint dealing with a conspiracy to murder a cabinet minister. Investigations have revealed that it was with President Chandrika Kumaratunga's approval that some of the weapons found in the possession of those arrested in this connection, were released. 

Senior sleuths attached to the Criminal Investigations Department have found damning evidence which incriminates the secretary to the president, her chief of security and a close friend in a conspiracy to cause mayhem in the Maturata and Hanguranketha district. A plot was allegedly hatched to murder former minister in the Peoples Alliance government, S. B. Dissanayake.

Ajantha de Zoysa, co-owner and ex chairman, Monaro/Group 4 Security Services Ltd, and now a PA Member of Parliament, denied any involvement with such a plan if, he says, it did exist.  He asserted that his men were at just at the wrong place at the wrong time and have thus been unfortunately implicated in this case.

The fact however that top cops assert a pistol released to Monaro Security personnel was later found in the possession of a PSD officer at Padiyapallella where the Monaro security personnel too were also taken into custody by police has linked the two groups to a possible murder conspiracy.

Also, both sets of men, one from Monaro security and the other from the PSD, spent a night together at President's House in Kandy on December 1, 2001, before leaving in two vehicles for Maturata the following day.

Furthermore, 100 rounds of ammunition for a .9mm pistol was released to PSD officers minus the weapon.  The .9mm weapon later found on the person of a PSD officer was licensed to Monaro / Group 4 Security Services Ltd.

On the day the men were arrested (December 2, 2001) S. B. Dissanayake was confirmed to address an election rally at Hanguranketha to conclude his campaign before polling day on December 5, 2001.

The men from Monaro and the PSD were arrested together by the OIC for Maturata, Rohana Dissanayake after they had fired at a Defender vehicle carrying supporters of S. B. Dissanayake at Padiyapallella - Maturata.

The issue now at stake is why these weapons were issued by Monaro to three of their security officers who were found in the Maturata area together with personnel from the PSD.  How a weapon licensed to Monaro was found on the person of a PSD officer and why Ajantha de Zoysa made an unprecedented request from the president when he sought approval to purchase five .9mm pistols instead of the usual shotguns Monaro bought for their security personnel. 

The men from the PSD were found roaming this area fully armed ten days after President Kumaratunga had concluded her visit to the district.

According to investigative police officers, the plot was initiated and the plan began to take shape on November 21, 2001. Ajantha de Zoysa, on an official Monaro / Group 4 Security Services Ltd., letterhead, wrote to Kumaratunga applying for five .9mm pistols.

The fact that de Zoysa at the time was no longer chairman of Monaro did not matter. What figured was his close relationship with President Chandrika Kumaratunga.

De Zoysa himself admitted when questioned by The Sunday Leader  that he wrote directly to Kumaratunga seeking approval for five pistols for the Monaro Group because the procedure to get the weapons approved by the Defence Ministry is otherwise too tedious,Ó he said.

The president endorsed the letter on the same day saying, ÒJust give, give..., Ajantha what he wants. In his letter to Kumaratunga, de Zoya wrote that he required the pistols in order to provide additional security to transfer some money.

According to de Zoysa's explanation, Monaro needed five .9mm pistols as a request had been made by PA candidate for Hanguranketha, Jayaratne Dissanayake that he needed security to carry cash, purportedly monies from the PA party funds to Hanguranketha.

Previously, for all such security transactions, Monaro security personnel have been supplied only with shotguns.  This was the first time a request for pistols was made.

Shehan Seneviratne, Managing Director Monaro, explained that they decided to opt for pistols for the first time as they are less cumbersome to carry than shotguns. 

It also avoids the hassle of being stopped constantly at checkpoints when the shot guns are seen, he said.

The president's approval meanwhile was received by Ajantha de Zoysa two days later on November 23, 2001 in writing.  The letter was signed by V. Malini Peiris, Additional Secretary, Civil Security, Defense Ministry. 

The weapons were later purchased by Monaro on November 29, 2001, at government stores in Welisara and taken to the Monaro armoury. There the guns were released to three Monaro security personnel by the Manager Monaro, M. P. Sendanayake who has said that he was authorised to do so by Shehan Seneviratne, Managing Director, Monaro. 

The CID maintains that in his statement to the police, Seneviratne has denied that he gave such authorisation.

Shehan Seneviratne however told The Sunday Leader  that he approved a cash escort. He says Sendanayake did phone him and ask permission to release a cash escort to Jayaratne Dissanayake, PA candidate for Hanguranketha. A cash escort, Seneviratne explained, entails two gunmen and one carrier. Seneviratne recalls that he even said these constant requests by politicians are a nuisance to the company but to go ahead and provide Dissanayake with the necessary personnel and weapons as Dissanayake was paying Monaro for their services.

We have found that of the five weapons purchased by Monaro, two were issued ammunition on December 1, 2001. The two .9mm guns released to the security officers however were given without ammunition and minus any User License Certificates.

De Zoysa said that ammunition is not normally released to Monaro security personnel. The weapons, he said, serve only as an outward security precaution.

The User License Certificates for all five guns were applied for by Ajantha de Zoysa only on December 3, 2001 and obtained two days later on the 5th. By this time, the three security personnel employed by Monaro had been arrested at Padiyapallella, Hanguranketha on December 2, 2001 and were in police custody. 

The three Monaro security personnel were arrested by the OIC Maturata, Rohana Dissanayake on December 2, last year. They are K. Sunil, K. S. Kumarabanda and C. J. Ranchagoda.  According to entry records maintained at Monaro, Sunil and Kumarabanda had been issued two .9mm pistols each, minus ammunition. Ranchagoda was part of the group purportedly as a Ôcarrier for Monaro.

Asked why he issued guns to his security personnel minus the User License Certificates, Ajantha de Zoysa said that it takes time to secure such documentation and since the weapons had been already released to Monaro he did not see the point in holding onto them until the User License Certificates had been got. 

After all, we were allowed to purchase the guns from the government armoury, he said, adding that as such, there was nothing wrong in using them before the ULC's had been secured.

Be that as it may, we will continue with the other details of the murder plan.    

While Ajantha de Zoysa was mobilising three of his employees and arming them for a mission, the presidential security division was also working almost simultaneously with de Zoysa. On November 30, 2001, a grenade launcher, hand bombs and four T 56 assault rifles were issued from the PSD armoury to some of its personnel.

The grenade launcher and the T 56 guns was issued together with 100 rounds of ammunition for a .9mm pistol. A .9mm gun however was not issued to any PSD personnel at this juncture. They were handed over only the ammunition. 

However as far back as November 15, 2001, entries show that a .9mm pistol was issued to police sergeant Kamal Premajayanth of the PSD.  The entry maintains that the gun was required in view of President Chandrika Kumaratunga's proposed visit to Horamadulla, Maturata on November 20, 2001 where she was scheduled to address an election rally.

At the time PSD officer Premajayanth was arrested together with the three security personnel from Monaro he had in his possession one .9mm pistol together with 15 rounds of ammunition fixed to it. The weapon bore no. AN 882.

When compared with the Monaro records, it is the same number as the weapon that had been issued by Monaro to the companies security officer who was also arrested together with Premajayanth at Padiyapallella, Maturata.

The .9mm pistol which had been issued to Premajayanth from the PSD armoury on November 15, 2001, was also found in the vehicle the PSD were travelling in at Maturata.

Ajantha de Zoysa claims that one weapon issued to Monaro's security gunmen, Sunil and Kumarabanda, was found on their person while the other was found inside the vehicle they had been travelling in. He denied that one gun issued to Monaro was found on the person of Kamal Premajayanth, who is attached to the PSD.

A top cop however says that this is not so. He asserts that the weapon bearing No. AN 882, which had been issued and licensed to Monaro was found on the person of Kamal Premajayanth of the PSD at Padiyapallella, Maturata where the Monaro security were also arrested.

In fact the police' B' report filed in the magistrates court Kandy on Tuesday February 12, 2002, states that this weapon licensed to the Monaro Group was found on suspect No. 1' who has been identified as Kamal Premajayanth of the PSD.

The other weapon that had been issued to Monaro bore No. AN 827.

Kamal Premajayanth from the PSD was arrested at Maturata in vehicle No. 253-7622 while the Monaro security officers were also arrested on the same day at Maturata in vehicle No. 252-6953.

A police investigation has now found that these two vehicles belong to the Ministry of Samurdhi Affairs, but had been handed over to Lt. Wickremasinghe, Transport Officer, Presidential Security Division on November 16, 2001. Wickremasinghe in turn had handed these two vehicles to the PSD personnel on the instructions of PSD Chief Nihal Karunaratne.

Ajantha de Zoysa claims that his men were in a vehicle belonging to PA candidate for Hanguranketha, Jayaratne Dissanayake. Our investigation has found de Zoysa's statement in this regard to be false.

An exercise book at Monaro where the release of the weapons was entered has now been sent to the government department for the Examination of Questionable Documents to ascertain if the signatures placed against the released weapons are genuine or if they have been forged by someone at Monaro after the weapons were issued to the three security officers. 

The other issue around this conspiracy is why simultaneously a grenade launcher and four T 56 weapons were issued to officers attached to the PSD.

 Both groups of men were arrested together at Maturata on December 2, 2001, mere hours before S. B. Dissanayake appeared on a public platform.

OIC Rohana Dissanayake had been informed as early as November 23, that two vehicles bearing the above registration numbers had been spotted roaming the Maturata area.

PSD Chief Nihal Karunaratne is also a suspect in a case where he threatened the former OIC Hanguranketha, Gunaratne Bandara, with death on November 20, 2001 at a meeting at Horamadulla in the Hanguranketha area where President Chandrika Kumaratunga was speaking.

Gunaratne Bandara instituted proceedings against the threat to his life and a court warrant was subsequently issued for the arrest of Nihal Karunaratne. The latter later surrendered and is out on a personal bail of Rs. 100,000 as the case continues.

Meanwhile, on December 2, 2001, following the arrest of the PSD and Monaro security officers, Nihal Karunaratne telephoned DIG F. R. Alles and threatened him saying if he did not release from police custody the PSD and Monaro security personnel he, (Karunaratne) would come to Maturata with 1500 men and rescue them from prison.

The DIG was unimpressed and refused point blank to release the men. Alles was thereafter stunned when President Chandrika Kumaratunga came on the line. Speaking to the DIG, Kumaratunga articulated similar sentiments to that of Nihal Karunaratne, telling Alles to release the men. When Alles continued to stand firm and refuse, Kumaratunga had mocked him saying in Sinhalese, 'Oya koi club ekeda kathakaranne? Oya para veda karanna epa apita,  (What club are you speaking from? Don't do this dirty thing to us. 

Kumaratunga, true to form, had her lines crossed. On another occasion when she had needed to speak personally with DIG Alles he had been contacted at a club where he plays a regular game of tennis. Hence her reference to a 'club.'

The cop was determined not to bow to presidential pressure. Kumaratunga however was undeterred and Alles later received yet another telephone call.

 This time the phone call was from President's Secretary, Kusumsiri Balapatabendi. The latter also requested the DIG to release the men being held.  This time Alles told Balapatabendi he would instruct OIC Rohana Dissanayake to file a report on the case and request court to act on the matter. He promised that the police would follow court orders and act purely at the discretion of the courts.

The courts subsequently ordered that the men be held.  They are all in custody at the Bogamabara remand prison where President Chandrika Kumaratunga took an unprecedented decision as Head of State to visit them, even signing the visitor's book at the prison house.

On Tuesday February 12, 2002, an identification parade of the suspects was held at the Kandy Magistrates court.  PSD Chief Nihal Karunaratne also joined the line of nine suspects, which included the three security officers from Monaro and five PSD personnel. 

Eight of the suspects have been further remanded in connection with creating mischief, being in an unlawful assembly, having in their possession deadly weapons and attacking a vehicle of a group of supporters of Minister S. B. Dissanayake.

Nihal Karunaratne was released once more on a personal bail of Rs. 100,000. The CID will now record a statement from President's Secretary K. Balapatabendi in connection with this conspiracy.

The police investigation believes that the grenade launcher was to be used to attack the stage when S. B. Dissanayake rose to speak. 

The legal position on this case has reiterated that this conspiracy was hatched to perpetrate violence in the Hanguranketha area and the two main people involved in this plan are PSD Chief, Nihal Karunaratne and Ajantha de Zoysa, MP.

A warrant for the arrest of Ajantha de Zoysa MP, is expected to be issued soon.

 Both, de Zoysa and PSD Chief, Nihal Karunaratne figure as key suspects in this conspiracy to murder and create mayhem. 

Questions are now being posed as to whether President Kumaratunga was aware of this conspiracy of planned murder and violence. The president's subsequent actions attempting to release the men in prison  by-passing the laws of the land and her visit to Bogambara prisons to personally see them  has raised eyebrows.

The CID investigation into this case once concluded will be handed over to the attorney general's department. The file at present is being handled by Rienzie Arsecularatne, President's Counsel, assisted by Gihan Kulatunge, State Counsel, while overall directions on the case is being supervised by the Attorney General, K. C. Kamalasabeyson.

It now remains to be seen if ASP Nihal Karunaratne will pull the plug on the police and dodge justice or if the government will act and hold accountable those responsible for a conspiracy to murder a candidate and now minister of the United National Front government, S. B. Dissanayake.