7th July 2002, Volume 8, Issue 51

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POLITIC

Impeaching the President

 By Suranimala

While President Chandrika Kumaratunga upped the pressure on the government with timely statements on the rising incidents of violence and cost of living, Prime Minister Ranil Wickremesinghe moved last week to address the economic crisis confronting the nation by going public with his future plans.

Given the rising dissension among the people due to the spiralling cost of living, the prime minister's statement was aimed at not just highlighting the state of the economy he inherited from President Kumaratunga, but also how he intends overcoming the crisis while paving the way for Finance Minister K.N. Choksy to announce today the immediate relief measures that are to be introduced to ease the cost of living burden.

This follow-up action was deemed necessary particularly because the public at large expect the government in office to deliver the goods irrespective of who was responsible for the state of the economy, hence the relief package by the finance minister to be announced today.

Relief package

And all indications are that the relief package will pave the way for price reductions in fuel and electricity, thereby easing public pressure on the government.

What the UNF government hoped for early in office was to get the peace talks started end June, enabling it to use the peace dividend derived thereby to push the tough reforms needed to get the economy back on track. But with that process reduced to a snail's pace and the price increases telling on the people's purse, the full public attention was on the economy, compelling the prime minister to take immediate remedial measures.

It is in this backdrop, Prime Minister Wickremesinghe came to make his address to the nation even as the president turned the heat on, fully realising the government's delay in moving against her has turned the tide in the PA's favour.

This, primarily due to the fact, the president will be empowered to dissolve parliament by December thereby giving her the opportunity of setting the political agenda thereafter, which in turn would necessarily have the UNF permanently on its toes, not knowing when the president will strike.

The government fully realises this danger and it is due to this fact that the constitutional amendment to prevent the president from dissolving parliament at the end of one year was mooted but in what is fast becoming a hallmark of the UNF government, there is a yawning gap between words and deeds.

And alive to this reality, the president came out fighting last week drawing attention to the two very issues which are sensitive to the government, lawlessness and the cost of living.

This the president did by adverting to the Tissa Devendra Salaries Commission report expected later this month, where by all indications public sector salary revisions will be recommended.

The president no doubt is well aware the economic situation in the country is such, the government will be hard put to give any salary increment at this stage notwithstanding any recommendations Tissa Devendra may make, but that was exactly what Kumaratunga said last week, hoping thereby to woo the public sector.

Thus, given the government's discomfiture over the issue, President Kumaratunga played the good samaritan calling for a salary increment to the public sector to ease the cost of living burden, knowing fully well the prime minister will be hard put to oblige, earning for her in the process brownie points with the people in general and the public sector in particular.

In such a situation, come December, the government will find it increasingly difficult to get the public service and the police to move, them not knowing which of the two masters, legislature or the executive will call the shots.

It is with the same objective that Kumaratunga has also focused on the law and order situation, putting Interior Minister John Amaratunga on notice for failing to stem the tide, once again getting police officers to think twice before carrying out their orders for fear of earning  the wrath of a president whose hand is being increasingly strengthened due to government inaction.

And come December, where the power of dissolution vests with Kumaratunga, it is the president who will be calling the shots and rest assured the public sector will not move on any issue which will even remotely earn the chief executive's displeasure.

In such a situation, even if the president decides to sack a minister to send a message to the people, Prime Minister Wickremesinghe will have little maneuverability short of calling for the dissolution of parliament.

But even on that score, he will by then find it almost impossible to get the support of his own members to vote for such a resolution since it is generally accepted, no member of parliament wants an election.

The 18th Amendment

These issues of course are not lost on the prime minister who on Thursday met with his political affairs committee comprising members Karu Jayasuriya, G.L. Peiris, Rauf Hakeem, Defence Minister Tilak Marapone and UNP Chairman Malik Samarawickrema to decide whether to introduce the 18th Amendment in July or move an impeachment against the president before December, thereby precluding dissolution.

And at the political affairs committee it was decided to first bring only the conscience vote by end July while proceeding to draft impeachment papers against the president focusing primarily on the vehicle issue and the blatant corruption in the Sri Lanka Rubber Manufacturing and Export Corporation. Other issues including some of President Kumaratunga's statements urging people to violence and attempting to subvert the legal process in the Bribery Commission were also to be dealt with.

Prime Minister Wickremesinghe having considered the matter requested Ministers G.L. Peiris and Tilak Marapone to start drafting papers in this regard to be forwarded to parliament in stages; the first being the conscience vote followed by an impeachment. The impeachment will prevent the president from dissolving parliament.

Further, Minister Marapone also called for the impeachment of Chief Justice Sarath Silva with Minister Karu Jayasuriya backing him up and that too was approved.

Marapone said before impeaching the president, the chief justice should be impeached if a fair hearing is to be received.

Agreeing with this proposal, Minister Jayasuriya said independent judicial officers have complained that it was impossible to carry out their functions impartially with the current chief justice and that they are penalised for upholding the highest traditions of the judiciary.

It was thereafter agreed that action to move out the chief justice too should be taken by end July.

Before the political affairs committee meeting on Wednesday, at the pre cabinet meeting itself Prime Minister Wickremesinghe, obviously having the impeachment option in mind, told his ministers the vehicle issue involving the president should be taken to its logical conclusion.

At the same time, he told the ministers of his plans for the economy and the follow-up action that must be taken after his address to the nation.

Parliament to decide

The prime minister said he will place his programme of action before parliament and ask the legislature to decide whether they want to burden the people or proceed with the rehabilitation of the economy on an agreed programme of privatisation.

It is thereafter that the ministers went in for the cabinet meeting with President Kumaratunga where the focus was once again on questionable transactions entered into during the previous government under the authority of Kumaratunga as finance minister.

And at last week's meeting, while the ministers expected the vehicle issue to take precedence, it was another financial scandal involving the Sri Lanka Rubber Manufacturing and Export Corporation that was the talking point with President Kumaratunga once again in the centre of controversy.

In this case, under Kumaratunga's authority, Rs. 900,340,000 had been disbursed to the corporation of which Rs. 541,167,730.63 was allegedly either misappropriated or fraudulently disposed of according to a cabinet paper submitted by Plantations Minister Lakshman Kiriella. The chairman of the corporation was a confidante of the president, Sarath Wickremasinghe who had been spending the money willy nilly even without proper board approval, at times issuing contracts to his neighbours.

This issue came up the previous week but the president had on that occasion said she would not have authorised the release of the money unless there was a request from the former Plantations Minister Ratnasiri Wickramanayake.

At that stage, Minister Kiriella had said he would look into that aspect and revert to cabinet and it was accordingly taken up last week, where all the sordid details surfaced with Kumaratunga unable to hide her blushes. (See box for cabinet paper)

Something fishy

Taking up this issue, where evidence showed Kumaratunga under her signature had authorised the release of the funds to the corporation, Minister Kiriella said, contrary to what the president said the previous week, there was no request for the money from the Plantations Ministry.

While Kiriella was making his presentation, Labour Minister Mahinda Samarasinghe observed from the documentation that sub standard machinery for the corporation had been purchased from a company called R.R. Navigere at a huge cost and he raised a pertinent question.

Asked Samarasinghe: "Is this the same company that was involved in getting down the luxury vehicles for the president?"

Replying his colleague was Minister Karunanayake who pointed out, it was the same company that was involved in the vehicle scandal which was responsible for the sub standard machinery deal in question as well.

Seizing on this issue, Lands Minister Rajitha Senaratne said the involvement of this company in Sri Lanka should be looked into and went on to say over Rs. 100 million had been spent on the sub standard machinery.

In needling the president on this issue, the minister's hand was strengthened by the audit report of Ernst & Young which stated over Rs. 54 million of the monies allocated were misused, including incidence of fraud.

Non existent factory

Going into the details, both Ministers Samarasinghe and Senaratne said according to the reports, millions were spent to build a factory in Bulathsinhala but that in reality there was no such factory in the electorate.

The prime minister himself pitched in to say there was definitely something fishy in the deal since Rs. 120 million according to the report has been spent only on laying a foundation stone.

Unable to answer the queries, the president said the matter could be investigated and a report made to cabinet, which prompted Karunanayake to query the purpose of such an exercise since the information based on Kumaratunga's own report was already before cabinet.

"Why don't you answer this now?" Karunanayake asked but the president once again called for an investigation instead, prompting Defence Minister Tilak Marapone to point out the futility of such an exercise since all the evidence was before them.

Said the president: "I will check and come back."

Next came the discussion on the cabinet note on the president's luxury vehicles forwarded by Finance Minister K.N. Choksy, which was highlighted exclusively in last week's issue of The Sunday Leader.

At the very outset, on this issue, the president moved to buy time stating she received the memorandum the previous week in addition to another note that day and as such would need some time to reply.

Said Minister Choksy, "We are waiting for a comeback from you to finalise our report to cabinet."

Procrastination

Added Karunanayake, "There is procrastination on your part. It is like what happened at cabinet meetings under the previous government where everything was postponed."

Shot back the president - "I got the documents only today."

Retorted Karunanayake - "No you got them last week. What you got today is a supplementary document."

Appealed the president: "Give me a little more time."

Agreeing to this request, Karunanayake said since more time is given, the president should furnish all the details including the certificate of origin of the cars and where they came from.

Making his own contribution at this stage was Interior Minister John Amaratunga who said there were questions raised whether in fact all the vehicles paid for had arrived in Sri Lanka and as such the services of Interpol too might be required to investigate the case.

Added Karunanayake, "There is also information some of the vehicles imported were used vehicles. You said they came from Germany. Is that your position?"

Not realising Karunanayake may be leading the president into a trap having all the details in his possession, Kumaratunga walked right in.

"Yes they came from Germany and they are all brand new. Unlike President Premadasa who imported two used bullet proof Benz cars and paid the price of a brand new car, I have not done so. You must start investigating from 1988."

Not satisfied with that response, needled Minister Senaratne. "What were you doing for the last seven years then?"

But before the president could respond chipped in Karunanayake: "You have said two vehicles were not in working order after the bomb explosion and are under repairs. That is not true. The managing agents of the vehicles told me today the vehicles were repaired and sent to you and were in your garage. In fact they said you owe them Rs. 1.5 million."

Taken aback Kumaratunga retorted angrily: "Anyway, I am not going to answer anymore. I am putting a full stop on this discussion today. No fraud has taken place in the last seven years."

While this comment sent ripples of laughter in the cabinet room, Karunanayake pressed on.

"Whether there was fraud or not is a matter for you to comment on and for us to decide. You are just one in a cabinet of 30 members. You can't dictate to us."

Retorted the president: "But I am the head of cabinet."

Replied Karunanayake cooly: "That is OK but you give us your reply next week."

Interjecting at this stage, the prime minister told the president she should send her response to the cabinet sub committee which would in turn submit a full report to cabinet.

With that out of the way, the ministers discussed the developments in the east with both Ministers Rauf Hakeem and Milinda Moragoda explaining the ground situation. Moragoda in particular said, looking at the suffering of the people in the east, they must work together to bring about normalcy in the area without turning it into a political issue.

On that note the meeting ended but the battle was far from over with the UNF ministers having set a trap for the president not only on the vehicle issue but also on the Rubber Corporation deal, where the same German company is a key player.

Impeachment

The thinking of the government now is to take these issues to a logical conclusion and impeach the president.

In fact, after the cabinet meeting both Ministers Choksy and G.L. Peiris told their colleagues sufficient material was available on these two issues alone for an impeachment. The decision by the Political Affairs Committee was subsequent to that.

What the president does not possibly know is that once she comes out with her explanation, more startling evidence which has been unearthed by UNF sleuths in the vehicle issue will be placed on record, thereby trapping Kumaratunga in her own explanation,  paving the way for impeachment.

But Kumaratunga has also decided to take the fight to the UNF and last week issued show cause notices on former Ministers A.H.M. Fowzie and Richard Pathirana for speaking in support of the conscience vote.

With that move, Kumaratunga has moved to call the government's bluff and put her backbenchers also on notice in the event they are also motivated to speak in support of the constitutional amendment.

And now it is upto the UNF to prove, it has not sacrificed the two senior members over an amendment they never intended bringing.

That the coming weeks will tell but one certainty is that with the sands of time fast running out for the December deadline, it is back to battle stations.

Kiriella's cabinet note

Ministry of Plantation Industries

3rd July, 2002

Note to the Cabinet

Temporary advance for Sri Lanka Rubber Manufacturing

and Export Corporation Ltd

This is in reference to the Cabinet Memorandum submitted on 8th February, 2002

I made a request to the Cabinet of Ministers that Rs. 90 million should be released to the Sri Lanka Rubber Manufacturing and Export Corporation Ltd., from the Treasury to meet the financial constraints faced by the said company.

The observations given by the minister of finance on the said cabinet memorandum which says that Rs. 45 million should be released as an advance to the said company and which was further stated that this company will enter into an agreement with the Treasury on the payment of Rs. 45 million and Rs. 125 million which was previously released by the Treasury to the said company. But I have studied the performance of the company in the previous period and discovered the following.

It was revealed that the minister of finance has submitted a cabinet paper on 10/01/2001 on release of Rs. 222.35 million to Sri Lanka Rubber Manufacturing and Export Company Ltd., by the Treasury and which was approved on 31/01/2001 (a copy of the cabinet memorandum and decision are annexed herewith). I kindly draw your attention that although Sri Lanka Rubber Manufacturing and Export Corporation Ltd., is under the purview of the Ministry of Plantation Industries, the above cabinet paper was submitted by the minister of finance. Further, this cabinet memorandum stated that the above amount should be given to rubber small holders in view of the reasonable price given to them on a competitive basis.

It should be mentioned that Ministry of Plantation Industries has not been requested to obtain a loan from the Treasury and the Treasury on its own allocated the undermentioned amounts to Sri Lanka Rubber Manufacturing and Export Corporation Ltd.

1999 Rs. 544.49 million, 2000 Rs. 228.85 million, 2001 Rs. 127,00 million, Total Rs. 900.34 million.

I discovered that the utilisation of the above funds was not properly done according to the information revealed by the ministry and the audit report issued by the auditors of Ernst & Young. Rs. 541,167, 730.63 out of Rs. 900.34 million was utilised under the following manner according to the auditors report.

1. Duplicate payment

2. Payment has been made but not to the correct persons

3. Additional payment has been made and additional payment made without proper approval.

4. Payment made on fraudulent calculations.

5. Payment has been made without justifications.

6. Payment has been made to wrong persons without paying to the correct persons.

7. Persons cannot be identified to whom they made payments.

8. Payment has been made without purchasing of goods and services

9. Payment has been made to unconstructed buildings.

10. Rs. 151,559,234.08 was not utilised which was released by the Treasury but not in the bank account.

11. Payment documents not available in the office

12. It has purchased machinery from a German company called R.R. Navigere, those are not up to the standard quality.

In view of the above factors,

1. It is proposed to release Rs. 90 million to the Sri Lanka Rubber Manufacturing and Export Corporation, by Rs. 15 million each with six installments as stated in my Cabinet Memorandum on 8th February, 2002.

2. It is proposed to conduct an investigation on facts raised by the auditors report. Thereafter, other matters should be considered.

Lakshman Kiriella

Minister of Plantation Industries

Annexures

I Cabinet Memorandum on 2001/01/10

II. Cabinet decision on 2001/01/31

III Summary audit report of Ernst & Young Co.

IV Invoices of purchase of imported machinery  


Treasury woes hound Jayasundera

 By Frederica Jansz

A puzzling feature of the new United National Front (UNF) government is why some public officials continue to hold office despite the fact that it was the UNF which shouted foul against the conduct of these officers.

Amazingly, some of these officers continue rubbing shoulders with the new cabinet of ministers, grinning convincingly, as they curry favour with the greens. And, what is more astounding is the volte face done by the government of the UNF, who a mere six months back were screaming themselves hoarse about transparency and accountability and the corrupt practices of certain public officials.

One of these officers thus accused by the UNF is none other than Dr. P. B. Jayasundera, chairman, Public Enterprises Reform Commission (PERC).

Formerly the Finance Secretary, P. B. Jayasundera whom the UNF accused of being the cause behind the economic mismanagement of the previous regime continues to hold high office in this government as well.

In his present capacity as chairman PERC, Jayasundera though believed to be responsible to a large extent for the economic downturn and loss of business confidence in the country, is still holding high office.

Consumer Affairs Minister  Karunanayake is determined that Jayasundera should be removed. Karunanayake is not alone in this view. Many leading private sector individuals who have had to 'deal' with Jayasundera consider him to be inconsistent and incompetent.

Incompetent

Minister Karunanayake asserting his position on the issue said, "We have been saying that the entire government of the People's Alliance was incompetent and corrupt over the last seven years. An active player to this process has been the present chairman of PERC who was then the secretary to the Treasury. This is not about witch-hunting any individual. The fact of the matter is that P. B. Jayasundera is incompetent and has even been implicated in the multi million-dollar vehicles purchases by President Chandrika Kumaratunga."

Jayasundera countered that this is a matter for the Presidential Secretariat. "The Treasury only provided the necessary funding and allocations," he said, asserting that the relevant spending agency has to follow government tender procedure. He said he could not state if the Presidential Secretariat which was the spending agency in this instance did so. "I am sure they must have done," he reiterated. He did not say whether he ascertained this fact before releasing millions of dollars.

He maintained that it is not the practice of the Finance Ministry to check if indeed such procedures had been followed by the spending agency.

He explained that the monies (amounting to millions of dollars) was released by the Treasury following a request made by the Presidential Secretariat. He said the Treasury complied on the basis that additional vehicles were needed to boost presidential security, following an assassination attempt on President Chandrika Kumaratunga in December 1999.

Cabinet ministers in this government, namely, G. L. Peiris, S. B. Dissanayake, Tissa Attanayake, W. J. M. Lokubandara, John Amaratunga, Rajitha Senaratne, M. H. Mohamed and A. R. M. Cader are of the view that Dr. P. B. Jayasundera is responsible for decisions taken during his tenure as finance secretary that were seriously detrimental to the economy of the country.

Economic Reforms Minister, Milinda Moragoda, however has voiced dissent. Moragoda argues that P. B. Jayasundera should not be ousted on political grounds. Moragoda has assured his cabinet colleagues that if there are charges of corruption, abuse of power or impropriety on the part of Jayasundera, he is prepared to look into them and take action, provided there is tangible proof.

Moragoda standing firm

Standing firm by his commitment "to enact a clean political culture," Moragoda emphasised to The Sunday Leader that hounding public officials should not happen under the present regime unless of course, "there is substantive evidence to prove a state officer is indeed corrupt."

Moragoda pointed out that when in opposition, the UNP fought against public officials being politically victimised.

As the controversy against P. B. Jayasundera smouldered last week, with angry ministers barely concealing their animosity towards Jayasundera, allegations were levelled against Milinda Moragoda, claiming he is nurturing ulterior motives when speaking in defence of the PERC chairman.

It was whispered that Moragoda's business concerns received blessings during the tenure of Jayasundera as secretary to the Treasury.

Moragoda scoffed at these allegations as being, "a typical slander campaign, common in Sri Lankan politics. "This is what I am trying so hard to change - but you can see how impossible it seems to be, to try and bring in a new and fresh political culture that will do away with all this pettiness, back-biting and character assassination," he said, adding the accusations against himself are "totally unfair and unjust. In fact my business suffered due to victimisation and I even had to go to court," he said.

Whatever the differing points of view on Jayasundera between Moragoda and his cabinet colleagues, in the public sector, many senior bureaucrats despise him (Jayasundera) for his lack of consistency and above all his reputation of selling-out his colleagues in order to achieve his own ambitions. It is well accepted in the public sector that he openly criticises and makes life difficult for anybody with access to the president on matters relating to economic affairs of the country. P. B. Jayasundera, they say is totally incapable of teamwork.

Unsuitable

According to leading private sector personalities, they cannot remember any previous treasury secretary who was as unpopular and unsuitable for his job as P. B. Jayasundera. They claim it is not his lack of knowledge that makes him unsuitable for his post, but his inconsistency and unreliability.

The private sector cites several examples of his inconsistency.

(a) Talking of the need for fiscal prudence on the one hand and justifying the recent economic relief package of the People's Alliance as not being politically motivated.

(b) Reducing indirect taxes on beer to promote investment and assuring investors that excise taxes won't be raised. However, within one year after local and foreign investors poured in billions of rupees to build new plants, Jayasundera increased the very tax he promised not to raise.

Jaysundera responded to these allegations asserting that in the first place these decisions are not taken by him, alone. "There is a consultative process," he said. Referring to the increased taxation on beer, he reiterated that yet the taxes on beer are maintained in neutral terms with the GST. Jayasundera admitted that as a result the tax base may have changed by 2 or 3% but that in comparison to the taxes imposed on liquor and tobacco, the taxes on beer is maintained at a low level.

The private sector claims that despite numerous complaints about Jayasundera's poor showing - to the president, she maintains that his unpopularity in the private sector is due to the fact that he does not grant special favours to a selected few in the manner the treasury secretary of the UNP regime did. The private sector totally rejects this argument.

According to the private sector, the problem with Jayasundera is not the fact that he says no. Businessmen say that they do not mind if he says no upfront on the basis of a certain policy decision he wishes to follow. The problem however is that he says one thing to the private sector and does something else. The problem lies in his inconsistency and the fact that his word cannot be trusted, they say.

In addition to the case on beer, another indigenous company (Laugfs - Auto Gas Lanka) sought to import and distribute gas in competition with Shell. On the basis of a verbal and written undertaking given by Jayasundera, this company invested tens of millions of rupees to set up a gas distribution facility. Later, Jayasundera went back on his word. In desperation, after failing to get even an appointment with Jayasundera for several months, this company managed to obtain an appointment with the president who directed Jayasundera to keep to his word.

Jayasundera countered this allegation asserting that a detailed report had been prepared by the Fiinance Ministry at the time on this case but that it was the Power and Energy Ministry which had stood firm and insisted they did not want to enter into an agreement with CPC and Laugfs. Jayasundera maintained that while certain ministers of the previous regime were in favour of Laugfs, others, namely former Power and Energy Minister Anuruddha Ratwatte was not. In fact, Ratwatte, had by this time already begun negotiations with Petronas in Malaysia, Jayasundera said.

Another allegation levelled against P.B. Jayasundera is that he is known to bend over backwards to help one or two of his favourites. Among his firm favourites is Ken Balendra. On the basis of a recommendation made by Balendra himself, Jayasundera, they claim, introduced an amendment to the Inland Revenue Act to grant investment relief to companies investing large amounts of money on 'infrastructure' projects. This amendment was introduced perfectly timed to enable John Keells Holdings to benefit from millions of rupees of income tax relief on account of its investment in the P&O project.

Jayasundera strongly refuted this allegation. He said, "if you check when this investment relief was discussed at the National Development Bank under the chairmanship of Dr. Lal Jayawardena - I and Dr. Jayanethi are the people who argued that any tax relief or tax holidays is not the right way to reform taxation. I can categorically say I did not work with any person in the private or public sector to favour any one individual. My whole commitment has been made to create a level playing field. Unfortunately in that process many people got hurt - but it was not targeted at any individual or any individual benefits. It was just to favour private sector led development in the country."

Does not heed advise

The private sector claims that despite P. B. Jayasundera's theoretical knowledge, due to a lack of practical skills and not taking the advise of his colleagues in government, Jayasundera has been responsible for the government entering into many agreements unfavourable to the country.

For example, the privatisation of Airlanka, Shell Gas and Sri Lanka Telecom are among the few disastrous deals P. B. Jayasundera concluded. The fact that he likes to work only with the president, bypassing even the cabinet and the board of directors of PERC, is exemplified in the way that Airlanka was privatised. The details of the privatisation transaction was placed before the cabinet and the board of PERC days before signing the deal, without giving any time for studying the details or raise points of concern. In the case of Airlanka, the PERC board was directed to rubber stamp the deal in one day.

Jayasundera had this to say when asked about this allegation. "We have given our side of the story at the COPE meeting. The privatisation of Shell was done by Rajan Asirwathan - even the Airlanka transaction was initiated when he was the chairman of PERC and Arittha Wikramanayake and Chandra Jayaratne were all on the board of PERC. The entire board at PERC were kept briefed about the transactions involving the sale of Airlanka shares to Emirates Airlines. I have never interfered with their work during my capacity as finance secretary or had any individual discussion with anybody on these transactions. With regard to the Airlanka transaction, President Kumaratunga together with the Finance Ministry discussed the various issues several times. It was not concluded in a day and it is very unfair to make this allegation".

In addition to the above, angry businessmen say Jayasundera squandered billions of rupees that the state could have obtained by failing to dispose of the remaining 60% stake in Sri Lanka Telecom in time. He decided to hire Hong Kong Banking Corporation (HSBC) as the general advisor to dispose of these shares, when this company hardly had any experience in placing telecom shares internationally and there were more qualified companies that had expressed interest, the businessmen alleged. HSBC failed  to find a buyer for these shares and since then the value of SLT shares have fallen next to nothing, primarily due to the recent decline in appetite for telecom stocks internationally. The revenue lost to the state as a result of mis-handling the sale of the remaining SLT shares is a staggering Rs. 20,000 million!

Jayasundera reiterated that he had no involvement in the selection of HSBC in this instance. "It was done by a technical panel and based on that ranking, the panel selected HSBC and went to cabinet for approval. We only wanted to select a reputed investment banker," he said.

Another case where it is alleged that P.B. Jayasundera has deprived the state billions of rupees in revenue, is the manner in which the Colombo-Katunayake road project was awarded to Keangnam. whose go between was president's buddy, Ronnie Pieris.

Bowing to pressure

Bowing to pressure by President Chandrika Kumaratunga, Jayasundera it is claimed, changed the tender conditions of this project midstream to do away with the financing package. This was done to help Keangnam and by extension Ronnie Pieris.

His decision to fund this project out of the consolidated fund means that the state would have to cough up Rs. 10 billion or more in cash at a huge opportunity cost when there were other reputed international bidders for this project who were in a position to offer cash grants on a government to government basis.

"I deny this charge too," Jayasundera said. He asserted there had been a tender board chaired by Daya Liyanage - "I took over this tender board after Daya Liyanage left for Malaysia. These charges are now being investigated - I am waiting to see if anything has gone wrong on my part individually. However, I was only the chairman of this board where there were two other members as well," he said.

It is alleged that P. B. Jayasundera is responsible for the president losing the services of many competent persons who dared stand in his way of his attaining the post of secretary to the Treasury and ensuring that no one else has access to her to point out his shortcomings.

The officials who were caught up in his machinations included:

(a) A.S. Jayawardena: kicked upstairs from Treasury secretary to governor of the Central Bank

(b) B.C. Perera: appointment terminated due to a series of disputes with Jayasundera

(c) Dixon Nilaweera: who many in the Treasury say was the best Treasury secretary of the CBK regime. His contract was not extended by Kumaratunga due to tales carried by Jayasundera.

(d) Rajan Asirwatham: resigned in disgust as chairman PERC due to differences of opinion with Jayasundera.

(e) Dr. Lal Jayawardena, former economic adviser to the president: A reason for his bout of ill-health while in government was primarily on account of stress caused by Jayasundera blocking his access to the president and total disregard to his point of view. Jayewardene is Minister Moragoda's maternal uncle.

It is reliably understood that if many of Jayawardena's recommendations had been implemented, the economy would not be in such dire straits. Eventually, in disgust, Jayawardena accepted an appointment as High Commissioner to the UK, thus depriving the CBK administration of his abilities as an eminent economist.

(f) Chandra Jayaratne, former board member of PERC resigned also due to differences of opinion with Jayasundera. Even today, due to this grudge, Jayasundera is not too receptive towards him in his capacity as chairman of the Chamber of Commerce.

(g) Thilan Wijesinghe, former Chairman BOI: It has emerged from court records that the written complaint against Thilan to the Bribery Commission was not made by the accuser, Ranjith Athukorale, but by Jayasundera without calling for explanations from Thilan. According to a senior Treasury official this action is unprecedented and unbecoming of the Treasury secretary and carried out because he couldn't "control Thilan's access to the president".

Jayasundera denied he had anything to do with the complaint made to the Bribery Commission against Thilan Wijesinghe. "I had nothing to with that," he said, adding that the other names mentioned are all his very good friends and remain so.

Jayasundera said he is frustrated and hurt that he is being targeted at this juncture. He reiterated that he has not done anything wrong but only given his professional best, working with commitment towards the economic betterment of this country.

He asserted that in the event it is proved he has not performed in a manner truly professional - "then I should not stay - I will go."

 

 

 

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