ISSUES

Tamils must appreciate eastern Muslims' concerns

"With regard to the Eastern Province, there is clearly a need to have meaningful and adequate institutional arrangements for the Muslims there if we are to evolve a durable solution. There are many options which are being put forward.....there may be firstly the need to make special arrangements, institutional arrangements, for the Muslims."

- Dr. Neelan Tiruchelvam (interview with Gamini Weerakoon for TNL in 1995)

By D. B. S. Jeyaraj

The recent 'crisis' caused by the eastern parliamentary component of the Sri Lanka Muslim Congress (SLMC) seems to have been 'managed' for the time being. It would be a grave folly on the part of the powers that be to imagine that the tempest in a tea cup has ceased and everything will return to normal. Nothing is ever settled unless it is settled right. The grievances and aspirations of the Muslims particularly those of the North-Eastern Province have to be adequately redressed and properly accommodated for this Muslim 'winter of content' to cease.

The Sri Lankan Muslims in general and those of the east in particular have come into their own in recent times. They have achieved a high degree of political consciousness. They see themselves as a distinct entity within the island. The Muslims while wanting to live in peace and amity with the Sinhala and Tamil communities in regions dominated by both groups, are also reluctant to be dominated by either. The community wants to avoid being manipulated by the Sinhala and Tamil ethnicities to their advantage in the protracted ethnic conflict. They want to ensure their safety and security and also hope to share power in a meaningful manner in areas where Muslims are concentrated to a sufficient degree. The desire to share power at the periphery when new political arrangements evolve has led to an important demand by the Muslims in recent times.

Complex issue

The Muslims unlike the Tamils have not endorsed a demand for secession. But like the Tamils the Muslims too want a power sharing formula when a political solution is achieved. While these objectives are reasonable and legitimate there is no denying that the issue is somewhat complex and prickly. This is mainly due to a lack of coherent unity within the Muslims themselves of what they actually want. Amid internal confusion, the community has failed to articulate the demand clearly and unitedly. Compounding the situation further has been the lack of understanding displayed by the other communities towards this. Tamil nationalists see the Muslim demand as something which affects their basic political demand within a united Sri Lanka - a federal or confederal set up for the merged Northern and Eastern Provinces. The Muslims particularly those of the east do not favour a merger. If both provinces are to be separate the Muslims are prepared to accept whatever devolution is available. But if the provinces are to be merged special arrangements are needed - South-Eastern Province comprising the Pottuvil, Sammanthurai and Kalmunai electoral divisions. Another proposal is to adopt the non-contiguous territorial principle and link all Muslim majority areas in the north-east into one administrative unit. The Tamils fear that such a unit will make their unit a "moth-eaten" one.

The Sinhala nationalists have an ambiguous' approach. Muslim demands are useful to support as a device to undermine or thwart Tamil aspirations. "How can there be a permanent merger when the Muslims are opposing it?" is a familiar refrain. Another is about the security and the rights of the Muslims within a Tamil dominated North- Eastern Province. Special safeguards should be set up they say. But there is no call for special safeguards to be set up when Muslim security in the Sinhala areas be it Mawanella, Maradana or Maligawatte is concerned. Likewise support also diminishes when the Muslims want a province or district of their own. Furthermore the non-contiguous territorial principle is also firmly rejected as that could be applicable in Sinhala provinces too.

The typical responses of the Sinhala and Tamil nationalists towards the Muslim demand however should not in any way be allowed to diminish the justifiable position of the Muslim demand. The Sinhala polity long influenced by an intolerant Sinhala "Buddhist hegemonic ideology" is only now struggling to liberate itself from the past and make amends for its historical faults. It may take more time therefore for the majority community to understand the Muslim predicament. The Tamils are in a different position. They have felt the brunt of majoritarian oppression in the past and propounded the self-rule principle as a desperate alternative. In that context the Tamils must not block or oppose the Muslims' yearning to determine their future and seek advantageous arrangements. For this the Tamils must understand the present Muslim mindset and appreciate its anxiety and concerns vis a vis the Tamils.

Misunderstood

One point that is often misunderstood in Tamil political discourse is the reason for Muslims  to demand a separate unit only in the north-east and not elsewhere in the island. This is viewed as blatantly anti-Tamil. What many Tamils fail to comprehend is that just as the Tamils wanted federalism, secession or devolution for the regions in which they were sufficiently concentrated and regarded as their traditional homelands, the Muslims too seek to emulate them. While Muslims like the Tamils live in all parts of the island, the relatively larger concentrations are only in the north-east. Numerically a little less than two-third of Muslims live in the seven Sinhala majority provinces and the remainder in the north-east. The east by itself has about one-third and is the province with the single largest concentration of Muslims in the island. Just as the Eastern Province is the province with the biggest number of Muslims, the Amparai or Digamadulla District in the province is the district with the greatest number of Muslims.

According to the official census conducted in all parts of the island (1981) the Muslims are 41.6 % there. Apart from this the 1981 census says that Muslims do not number more than 10% in any of the 18 southern districts. The districts with the largest percentages were Kandy (9.9 %), Puttalam (9.7%) and Colombo (8.3%). In contrast, the Muslims are 41.6% in Amparai, 23.9% in Batticaloa, 29.0 % in Trincomalee and 26.6% in Mannar. Thus, the first four districts in terms of Muslim population are in the north-east.

It is also a fact that when the 'first past the post'  electoral system was in force from 1947-1977 the only single member constituencies with a 50% plus Muslim majorities were in the east alone - Kalmunai, Pottuvil, (1947-1960); Kalmunai, Nintavur, Pottuvil (1960-1977); Sammanthurai, Kalmunai and Mutur(1977). In addition there were multi-member constituencies ensuring enhanced Muslim representation in the east also - Mutur, Batticaloa (1947-1960); Batticaloa, Mutur (1960-1977 ) and Pottuvil, Batticaloa in 1977. Thus, it could be seen that the largest number of Muslim MPs from a province were always elected from the east. Incidently the Tamils voluntarily gave up their representation in the Amparai District in favour of the Muslims. Even after proportionate representation came in, it was the Eastern Province that 'elected' the most number of Muslims as opposed to being 'appointed' on the national list. Presently eight of the 16 eastern elected MPs are Muslims (SLMC-5, NUA-2, UNP-1). If the national list MPs are taken, the eastern component becomes 14. Of course if all Tamils living in the LTTE controlled areas had voted, the Muslim MP figure would have decreased. Nevertheless, the east remains the provincial factory churning out the largest number of Muslim MPs.

Significant role

Furthermore, it is only in the east that a Muslim  party like the SLMC can contest alone and win an adequate number of seats. The importance of the east within the party as well as the community at large plays a significant role in the current SLMC internal power struggle. All these reasons indicate very clearly the rationale behind the Muslim demand for a separate devolutionary unit in the north-east. It is not possible to form a viable devolution unit in the southern provinces even with the aid of the non-contiguous territorial principle. Besides the dependence and inter-twining of the Muslims with the 'surrounding' Sinhala environment and economy make it impossible for Muslims to demand separate units there. The Muslim political leaders too find it difficult to get elected as part of a separate Muslim political party in the south on a national level (except Hakeem in Kandy). It has been possible for the SLMC to win significantly in local authorities where Muslim concentrations are larger - particularly the urban areas. So the Muslims are trying to set up a unit of devolution in areas where they are sufficiently concentrated and therefore most practical.

Self-sufficient

The eastern Muslims are for the most part self-reliant and self-sufficient economically in their areas. The more affluent ones have been having lands, livestock etc. in Tamil areas. Some engage in trade too. The past years of conflict have altered this inter-dependence drastically. With access to their lands and livestock cut off and avenues of trade reduced in Tamil areas, the eastern Muslims though affected, have come up with an alternative economic pattern. This reduces dependency on Tamils while feelings of anti-Tamil hatred remain. Moreover the emerging intelligentsia and elite among eastern Muslims are quite hostile to the concept of Tamil domination and would prefer separate arrangements.

Another feature is that the eastern Muslims have been comparatively more enterprising in trade and manufacture than their Tamil counterparts. It was the Jaffna Tamils who controlled much of the Tamil economy and competed with the Muslims. The prolonged conflict has weakened the Tamil hold on the eastern economy. The Muslim community by virtue of having adopted a cooperative attitude towards the Sinhala dominated governments have developed their areas and bettered their lot significantly. The post 1994 years with M. H. M. Ashraff and Hisbullah at the SLMC's helm have been quite productive.

In contrast the Tamils adopting a confrontational course with the center have been increasingly marginalised. The war has destroyed much infrastructure and economy. The rapacious taxation by the LTTE has virtually impoverished the sections capable of economic generation. All this has placed the Muslims at a relatively advanced position than the Tamils in the east. They are perceivedly more dynamic.

Earlier the Muslims were backward in education. But in recent times particularly the efforts of Dr. Badhuddhin Mahmood have altered that too. Very large numbers of Muslims particularly women are getting educated. A large component gets higher education too. Many are becoming professionals and academics. With most educated Tamils fleeing the country, the educated Muslims are filling the vacuum. The emerging elite in the east is Muslim. Their aspirations are vast and difficult to be contained within a Tamil dominated unit of devolution. The biggest fear is that the Muslims who according to the 1981 census were 33% of the province will be reduced to only 17% in a merged north-east. This is the primary factor in the eastern Muslims' reluctance to accept a north-east merger permanently. They do not want their strength to be diluted and significance reduced further. The eastern Muslims want to ensure his or her proportion in any new set up.

Furthermore, there is every chance that past changes caused by the conflict have altered the province's demographic pattern considerably. The Tamils may no longer be 42% but much less. Likewise the Sinhala population through external influxes too has increased. The Muslims with a comparatively higher birth rate and reduced practices of outward migration may very well be the single largest ethnicity in the province now. If so it makes sense for the community to resist submergence in an overwhelmingly Tamil dominated north-east merger and strike out for a separate province or council or preserve the status quo.

Distinct culture

This standpoint of the Muslims may be unpalatable for many Tamils but efforts should be made to understand and appreciate it. The causes that impelled Tamils towards separatism can drive the Muslims too towards a form of separatism in relation to the Tamils. It must also be realised that the Muslims of the north-east have every right to those provinces as the Tamils  have. They have lived there for centuries and evolved in some form a distinct pattern of culture, economy and social order. They share a common language but vehemently oppose being classified ethnically as Tamils. In their self-perception they are different and have a separate identity. This must be acknowledged and respected. The pittu flour and coconut pattern of inhabitation on the Eluvankarai region can cut both ways. If Tamils say the Muslims do not have a common territory because Tamil villages are interspersed then the Muslims too could argue against the Tamil demand on the same basis.

Despite the prevalent tensions it is imperative to note that the Muslims are not opposing basic Tamil political objectives. The Muslim articulation of demands may convey a wrong picture to the Tamils that they are doing so. Despite Sinhala hard-liners trying to distort the situation, the reality is that the Muslims are not opposing it. What Muslims are worried about is Tamil majoritarian hegemony being thrust on them. Therefore they seek safeguards and/or alternative arrangements. The present generation of Tamils have often found fault with their elders for not being able to anticipate what would befall the community in a post-independence scenario. The Tamils demanded neither a separate country or federalism from the British. Instead they asked for "balanced representation" and later were prepared to provide "responsive cooperation."

Subsequent deve- lopments showed that the trust was misplaced. Under these circumstances can the Muslims be frowned upon for seeking adequate safeguards and measures when new political arrangements are evolving? The Muslim demands and timing in that context are perfectly reasonable and completely justifiable. When a coolly rational leader like Hakeem articulates the demands, he may be misunderstood by Muslims but others appreciate it better. When hotheads like Athaullah or Anwer Ismail express the demands the sentiments may find resonance within eastern Muslims but convey a wrong impression to others. What Hakeem has been doing is to steer a middle  path between Sinhala and Tamil interests and ensure a good deal for the Muslims. His moderate course of not contributing to a situation where the Muslims could be accused of scuttling the peace process has been maligned within and outside his party.

Security concerns

Another important, perhaps the most important reason for Muslim apprehensions in a Tamil dominated north-east is, security. With the rise of armed Tamil militancy the Muslims were severely affected. Killings, assaults, abductions, extortion, seizure of property, etc. were the order of the day. The eastern Muslims who were supportive of the Tamil struggle in the early stages became worried and alienated. Earlier many Muslims joined the Tamil movements but now they began forming their own groups or joining the armed forces and homeguards. The 'third force' exploited this. Tamil-Muslim violence was instigated and fostered. Tamil groups also retaliated. This made the Muslims more insecure. Be it the Tamil national army set up by the Indians or the LTTE or other Tamil groups, the Muslims have been at the receiving end. No amount of rationalising, denying or underplaying could wipe out the memories of the most heinous atrocities committed against the Muslims by the LTTE. The large scale massacre at the Kattankudi Mosque and the small scale massacre at Sammanthurai Mosque are indelible blots for this generation of Muslims. Whatever the reasons for it those acts were a despicable violation of human rights. The massacre in Eravur, Alinchipottanai, Muttukkal etc. are equally horrible.

Another massacre by a different group was the killing of Muslims in the civilian volunteer force by Varadaraja Perumal's goons in 1989. It does not matter from a Muslim viewpoint about who killed the Muslims or why they were killed. What matters from their point of view is that Tamils did it in the same way that Tamils perceive the anti-Tamil violence of 1956, 1958, 1977, 1981 and 1983. Worse still was the mass expulsion of Muslims from Jaffna, Mannar, Kilinochchi and Mullaitivu Districts by the LTTE in 1990. In one sweeping stroke the LTTE demonstrated that despite the pious Tamil platitudes of Muslims being "Islamiyath Thamilargal" (Islamic Tamils) and "Thamil Pesum Makkal" (Tamil speaking people) they were in reality, separate and different.

If the Muslims were indeed regarded as an integral part of the Eelam nation such an act could never have been thought of let alone implemented. By expelling the Muslims the Tigers became vulnerable to charges of ethnic cleansing. The cruel manner in which the Muslims were driven away from their traditional homelands is not something that could be forgotten or forgiven. It also created for Muslims a nightmarish vision of what life for the Muslims could be in a Tamil dominated scenario.

To be continued

Insider dealing fiasco

By Asgar Hussein

The independence of the Securities and Exchange Commission (SEC) has come under a cloud following moves to hush up an investigation into the alleged insider dealing of its own chairman and other leading businessmen.

The case has also brought into focus the wider issue of appointing shareholders and board members of companies to regulatory bodies, thereby leading to conflict of interest situations. The implications are so serious that a reassessment of this policy may be necessary.

The case in question revolves around controversial share transactions involving the Aitken Spence conglomerate. A former Chairman of the group, Michael Mack and two Directors, Norman Gunewardene and Manil de Mel stand accused of insider dealing.

Their family members have also come under suspicion. They include Gunewardene’s children Ajit, Ruchi and Otara of Odel fame, as well as Mack’s wife and two daughters. Despite an opinion by the Attorney General that there is a prima facie case against the directors, the SEC is now attempting to drag its feet on the issue.

Evidence

Evidence unearthed thus far strongly implicates Mack, the Chairman of the market watchdog, the SEC. Suspicions have also been cast on Ajit Gunewardene, the Chairman of the Colombo Stock Exchange (CSE) and  senior director of the John Keells conglomerate. Gunewardene is also a prominent behind the scenes player in the government, which in turn has raised questions whether influence is being brought to bear on the investigations at the SEC. Gunewardene’s father, Norman is one of the Aitken Spence directors against whom the Attorney General has said there is a prima facie case.

An investigation by The Sunday Leader revealed evidence against most of the accused in this case. Let’s consider the circumstances leading to these share transactions and the aftermath.

It was on May 22, this year, that the sorry state of affairs at Aitken Spence was highlighted by its Accountant/Secretary, Ranjan Casie-Chetty. He submitted a memo to the group’s board of directors stating that forecasted losses of their troubled subsidiary — Aitken Spence Garments Pvt. Ltd. — could amount to almost Rs. 125 million. He had also referred to massive fraud and exchange control violations.

Casie-Chetty’s memo also stated that this anticipated loss amounts to one third of the profits of Aitken Spence Group  as disclosed in the draft annual report for 2001/2002 submitted to the board a week earlier on May 14.

The draft annual report which was tabled at a board meeting on May 14, had reflected anticipated profits amounting to Rs. 354 million. The losses due to the rackets at Aitken Spence (Garments) Pvt. Ltd. were not reflected in the draft annual report. Those present at that board meeting included Aitken Spence Chairman Prema Cooray, Rajan Britto, Michael Mack, R. Sivaratnam, Harry Jayawardana, C.H. Gomes, Norman Gunewardene and G.C. Wickremesinghe. De Mel was out of the island in the month of May and there was no board meeting in April.

Casie-Chetty’s memo on May 22 also informed the board that the banks had expressed concern over the weak position of the company.

Aitken Spence Ltd., which holds a 50% stake in Aitken Spence Garments, had submitted corporate guarantees to three banks (HSBC, HNB and Standard Chartered) to the tune of US$ 2.1 million. Their joint venture partner, Dennis Day Ltd., (which owns the balance 50% shareholding) had also given guarantees for the same amount.

The information regarding fraud and exchange control violations at Aitken Spence Garments, which came under the group umbrella, were not made known to the public despite Aitken Spence being a public-quoted company. Had the investing public learnt the true situation, they would not have paid a high price for the shares during the subsequent transactions which led to the controversy.

For, if the true state of affairs was known, then the projected profits of Rs. 354 million of Aitken Spence would have reduced drastically due to the estimated Rs. 125 million loss of the subsidiary garment company, which was not reflected in the draft report tabled on May 14, not to mention the corporate guarantee of US$ 2.1 million.

Disposing of shares

Hardly a fortnight lapsed after Casie-Chetty’s memo, three members of the Aitken Spence Board, their family members and family-owned companies disposed of large parcels of their shares.

On May 30, Gunewardene’s children Ajit, Ruchi and Otara sold 60,000 shares. This was on the very day that Casie-Chetty submitted another memo to the board providing information on Aitken Spence Garments and calling for an urgent board meeting to discuss how to protect the interests of the Aitken Spence Group as a result of the problems faced by its subsidiary.

The following day, the elder Gunewardene and a private family company, Nordel Investments Pvt. Ltd., disposed of 600,000 shares.

Then on June 10, Norman Gunewardene disposed of another 105,400 shares. On this very day, Michael Mack, his wife, their two daughters and a private family company called Luckannon sold 1,002,002 shares.

The same day, Manil de Mel sold 30,000 shares. He and his wife disposed of another 2000 shares the following day, June 11, and another 8,000 shares two days later, June 13. On June 19, de Mel sold a further 4348 shares. Peanuts, of course, compared to those sold by colleagues Mack and Gunewardene.

These transactions had aroused the suspicions of the SEC, which regularly monitors the market. Its Director General, Dr. Dayanath Jayasuriya then launched an investigation having informed the SEC board. The matter was thereafter referred to the Attorney General’s Department seeking an opinion around early September.

The AG’s determination released early November was damning. It stated that based on the evidence forwarded, legal action is warranted against Gunewardene, Mack and de Mel. They could be charged in terms of Section 32 (1) read with  Section 51 (1) (a) of the SEC Act.

In the case of the share transactions by Gunewardene’s children and Mack’s wife and daughters, the AG stated that though their actions are suspicious, there is insufficient evidence to arrive at an irresistible inference about their guilt, thus warranting further investigation. With regard to the transactions executed by the private family companies Nordel and Luckannon, the AG held that the blame rests on Gunewardene and Mack respectively if the orders for the share sales were placed by them. If the orders had been placed by family members or by any employees of these companies, then further inquiry is necessary to establish knowledge on their part.

The allegations against Manil de Mel are less tenable compared to his two former fellow board members. Although he had disposed of some shares, he had also purchased a similar quantity during the same month. This would, to a great extent, indicate innocence on his part. He was also out of the island during the month of May, when the crisis at Aitken Spence Garments was highlighted in Casie-Chetty’s memo. It could well be that he did not know the contents of the memo.

Defence

Mack and Gunewardene have privately defended themselves in this case by arguing that they disposed of their shares because they were being edged out of Aitken Spence Ltd., by tycoon Harry Jayawardana in his moves to wrest control of the conglomerate.

However, there exists circumstantial evidence which appears to counter this defence.

The Sunday Leader understands that Casie-Chetty, when questioned by the SEC, had claimed he advised Norman Gunewardene against selling shares due to the financial imbroglio.

Two letters written by Gunewardene himself are of much interest in this regard.

In a letter to Casie-Chetty on May 31, (the very same day he disposed of a large parcel of shares), he says he found a confidential letter in an open envelope lying on his desk. “I saw it marked as confidential, and I did not read it as I have put my shares in the market,” he stated.

He further mentioned that he had informed Chairman Cooray he would not be standing for re-election as director at the annual general meeting on June 26. In stating thus, Gunewardene probably wanted to claim he didn’t read the letter marked  confidential, as a defence should problems arise.

But by May 22, the latest, he did know the true state of affairs due to Casie-Chetty’s memo of even date to the board.

On June 4, he wrote another letter to Chairman Cooray stating he had received a memo marked ‘private and confidential’ that morning which referred to Aitken Spence Garments. Gunewardene informed Cooray that it would be returned to him, as was done with the earlier memo on May 31. “I have to do this because I have put my shares in the market, and don’t want to be privy to any sensitive information good or bad,” he had stated. The letter itself was opened.

Questions

Here the question arises as to how Gunewardene knew that the memo was in relation to Aitken Spence Garments in the first place, and how he knew it contained sensitive information good or bad? As such, it may even be inferred that the memo was opened and read by him.

It is also pertinent to mention that Gunewardene was present at the board meetings on May 14 (when the draft annual report was tabled) and May 22 (when the first memo by Casie-Chetty on the status of Aitken Spence Garments reached them). At the time he put his shares in the market, he was therefore privy to the sensitive information forwarded by Casie-Chetty.

Following press reports on this insider dealing case last Sunday, the SEC said they are considering the matter with the utmost seriousness and are proceeding with their deliberations. They added that in view of the continuing investigations, SEC Chairman Michael Mack had taken leave of absence. Others, however, felt that he should have resigned.

After all, the SEC is the watchdog body responsible for stock transactions. Any conflict of interest situations and allegations of this nature can damage its credibility and erode public faith and confidence in the market.

The Colombo Stock Exchange (CSE) also reacted to the press reports. They stated that Chairman Ajit Gunewardene had informed them that he has not been notified by any authority of any misdemeanor on his part regarding the controversial transactions. In his case, and that of his brother and sister, further investigation will be required before a prosecution is launched.

Nevertheless, the whole issue is an indictment on the manner in which our corporate affairs are conducted. The government may perhaps have to reassess the policy of appointments to top posts in regulatory bodies to ensure that conflict of interest situations do not arise. This can be done by compelling appointees to first resign from all boards in which they serve and sell their shares in companies before they assume such duties. It is imperative that public faith and confidence in our institutions be maintained.