Norwegian government has now withdrawn all funding and is saying
there is probably legal basis to demand the NGO repay tens of
millions of rupees that have been diverted and remains unaccounted
detailed report by two international audit teams has found that a
Norwegian national operating a multi faceted non-governmental
organisation, Worldview International Foundation (WIF) in Colombo
has rendered the organisation both technically and financially
bankrupt. The shocking revelations have brought into question the
role of international NGOs in this country and in particular the
actions of foreign nationals who have developed close links with
political leaders both in Sri Lanka and in Norway.
this instance the individual concerned is Norwegian born Arne
Fjortoft - Secretary General of WIF.
International Foundation (WIF) came in for severe criticism in a
report commissioned by the Norwegian Foreign Ministry. According
to the report written by the Norwegian audit firm UniConsult, WIF
has spent Norwegian development assistance grants in violation of
the agreement it had signed with the Norwegian Agency for
Development Cooperation (NORAD).
Minister for Development Cooperation, Hilde Frafjord Johnson, in a
letter dated April 10, 2003 has stated that several breaches of
various types of the four year agreement with NORAD (1999-2002),
which expired 31.12 2002 have been uncovered. "Also, that
based on the breaches in the agreement, a new agreement between
NORAD and WIF is not possible."
has denied the accusations, but Chairman Progress Party in Norway,
Carl I. Hagen has called for the organisation to be investigated
by the National Authority for Investigation and Prosecution of
Economic and Environmental crimes.
International Foundation was established in 1979 in Colombo as an
international Non Governmental Organisation (NGO). It is
registered as an NGO with the
Planning Ministry and as a company with the Registrar of
Companies in Sri Lanka. Fjortoft established the company after
befriending the late A. C. S. Hameed who was then
foreign minister of
Sri Lanka . Hameed was the first chairman of Worldview
International Foundation and his local political clout and
international contacts were used liberally to get funding for
Worldview. To this day his son, Amrisha Hameed remains an
executive member of the Central Council of WIF, and a number of
close relatives of Hameed have been employed by the organisation
since its formation.
also has powerful patrons both in Sri Lanka and in Norway.
Norway's current Prime Minister Kjell Bondevik was also once
chairman of Worldview Rights in Norway, which is an affiliated
Worldview International Foundation, Colombo. Even Norwegian peace
brokers, Eric Solheim and Vidar Helgessen were all part of the
organisation at one time - though we learn that both Solheim and
Helgessen have since distanced themselves from WIF following the
scandalous revelations. In Sri Lanka too, Fjortoft has close
connections to powerful politicians and bureaucrats both in the
former People's Alliance government and the United National Front
problems at WIF began when reports against Founder and Secretary
General Arne Fjortoft were sent to donors. The reports alleged
that large amounts of money granted for various aid projects had
been misused and diverted instead towards commercial entities in
violation of the conditions under which the aid was granted. This
triggered NORAD into taking action.
May 2002, NORAD decided to carry out a technical and financial
audit of WIF and entities controlled by WIF. The purpose of the
audit was to verify whether funds received from NORAD under the
framework agreement had been properly spent and reported in
accordance with project proposals and budgets. NORAD concluded its
findings in December 2002.
on these findings, the Norwegian government commissioned another
international audit firm, UniConsult to evaluate the management
and financial dealings of WIF in Colombo. This is the first time
that Norway began an investigation into the financial conduct of
an NGO funded by them in Sri Lanka. The second investigation
proved to be as damning as the first for Wordlview International
second investigation of the organisation followed after adverse
comments were made by the Norwegian auditing firm Nordic
Consulting Group, who in December last year submitted a shocking
report on Worldview International Foundation. In their conclusions
this auditing firm stated that the entire governing body and
management of WIF have not fully realised the seriousness of the
challenges faced. They have also stated that, WIF is both
technically and financially bankrupt due to a deviation of funds
from those allocated by NORAD for project work in Sri Lanka.
which was the second auditing firm to be commissioned by the
Norwegian Foreign Ministry to re-evaluate the shocking findings of
WIF in Colombo, concluded that there were indeed significant
local accounting standards and international accounting standards
at WIF. Also, that there was a serious lack of specific
descriptions of the
quality of the organisation's internal controls and that WIF was
lacking in evaluation and confirmation that transactions between
the organisation and Worldview Global Media Ltd., and its
subsidiaries are based on commercial principles.
has responded through his lawyers Advokatfirmaet Steenstrup
Stordrange DA, who state in his defence that the type of formal
breaches in the reporting to NORAD that has occurred must be seen
in connection with "WIF's
special situation of being an
unique and important development organisation within
information, communication and communication knowledge."
is therefore important that WIF's work is not damaged due to the
formal breaches which have been discovered through this
review." the law firm asserts, warning that by stopping
"the importance of WIF's work" in Sri Lanka will
severely hinder peaceful development projects in the island. (See
box for Fjortoft's response)
the April 10 letter from the Norwegian Foreign Ministry it is
obvious that Norway has not bought Fjortoft's story. It appears
even friends in high places in the Norwegian government could not
protect Fjortoft in this instance.
Alliance Parliamentarian Dr. Sarath Amunugama is the current
Acting President, Central Council,
WIF. Inspite of an impressive 25 member central council of
influential individuals from around the globe, Norwegian auditors
say, Secretary General Arne Fjortoft "seems to have wide
powers and strong influence on all decision making
that "it is difficult to get a clear picture of the overall
decision-making process and structure of WIF." Obviously the
25 member Central Council is a mere window dressing to give the
impression to funders that Worldview is a respectable organisation.
entered into a framework agreement with Worldview International
Foundation from 1999-2002. The purpose of the agreement was to
support a development programme carried out by WIF. Under the
agreement, NORAD has granted in total an estimated Rs. 884 million
(NOK 68 million) to WIF for different projects in the programme
for the "mobilisation of people's participation in the
development process for sustainable development."
of this Rs. 884 million it has been estimated by the Nordic
Consulting Group that a sum of Rs. 38.4 million meant for NORAD
projects have been illegally diverted to other projects.
main objectives in the agreement between WIF and NORAD were to use
communication in support of human development and rights, to
facilitate people's participation in communication, to carry out
training in communication and to assist in the use of new
technologies and skills.
had in 1999 agreed to contribute, subject to annual appropriations
by the Norwegian Parliament, a financial grant to be used
exclusively for identified activities. Since 1999, when the
agreement was signed, NORAD has contributed yearly over Rs. 260
million (20 million Norwegian Kroner) to WIF.
on a review of a number of documents produced by WIF and its
subsidiaries, the audit team has alleged that WIF and its
commercial entities have overvalued assets and inflated profits.
It also alleges that the organisation has given false information
on the number of viewers of its television programmes, the number
of NGOs in the network and staff employed.
report in fact categorically states that WIF and its commercial
companies are in deep organisational and financial crisis and WIF
may at the moment be technically bankrupt. The auditing team
reiterated that this financial situation at WIF has developed over
the years but never communicated
Norwegian auditors in fact found that WIF and its related
commercial entities are tightly interwoven in a way that obscures
the decision-making process and violated the framework agreement
between NORAD and WIF.
auditors' report say that entities both in the NGO and the
commercial wings of WIF are under constant change, which makes it
difficult to get a reliable overview of the entities included in
the WIF system.
international office, which serves as its headquarters is located
in the new WIF building at Battaramulla. The building also houses
Worldview Global Media, Young Asia Television (YATV) and the local
media centre, Worldview Sri Lanka.
media centres in Asia and Africa belong directly to WIF, and have
their accounts consolidated with that of the international office
in Colombo. In addition, Worldview Rights in Stavanger, Norway, is
affiliated to WIF, and its accounts have been consolidated in the
WIF accounts until 2001. The media centres and partner NGOs work
with WIF mainly on two NORAD funded projects.
Global Media (WGM) was established in 1995 with the aim of
launching Young Asia Television and is the holding company for
several other commercial companies. Arne Fjortoft is chairman of
almost all the companies under the WGM umbrella.
companies under the WGM umbrella are YATV, MediaSolv, which is a
software development company and purely a commercial entity.
Another subsidiary - Worldview Institute Ltd., Sri Lanka carries
out corporate business training leading up to a Diploma in
Business Management. Worldview Global Education, professes to
carry out distance education for public servants in Sri Lanka and
Worldview Multimedia Education is located in Malaysia and carries
out multimedia productions.
to the Norwegian audit team, only the financial statement of
Worldview Multimedia Education in Malaysia had been audited at the
end of 2001.
addition to these companies, WIF is directly engaged in and has
shares in three other companies, namely, Paradise Farm, Nature
Cure and Nature Cure Health Resort Ltd., and Pan Lanka Networks.
audit team states that with regard to Pan Lanka Networks, "it
has no audit statement or minutes from board meetings for the last
three years." When questioned by the auditors Fjortoft is
reported to have said the audit will soon be completed.
Lanka Network Ltd., is an internet service provider located in
Colombo of which WIF owns 96% of the shares. Pan Lanka has been
running at a huge loss and the company has now been put up for
sale. Pan Lanka required Rs. 1.4 million (US $ 15,000) a month to
survive as well as an injection of a further Rs. 4.8 million (US $
50,000) immediately for equipment. According to the WIF auditor's
report of October 1, 2002, WIF's investment in Pan Lanka is Rs.
13.7 million (US$ 143,652). In the Norwegian audit teams' opinion
WIF will have to take losses of up to Rs. 38.6 million (US $
403,034) where Pan Lanka is concerned.
Farm, billed as an organic farm, is essentially a front for a
luxury guest house located at Kitulgala that serves as a holiday
home for Fjortoft and his cronies. This luxury guest house is
equipped with a private swimming pool, ultra expensive hi-fi
systems, and other amenities.
Audited accounts and minutes from board meetings for the
last three years for Paradise Farm remain unavailable. The debt to
WIF as a result of this project is Rs. 5.7 million (US $ 60,000.).
In addition a minimum of Rs. 21.7 million ( US $ 227,000) has been
invested directly by WIF as equity in Paradise Farms.
Cure Health Resort Ltd., another project under Fjortoft's guidance
and blessings has bought Barbaryn island off Beruwela. Fjortoft
has plans to build a hotel and attract "health tourists"
for treatment and leisure at this exotic location. According to
minutes from board meetings, WIF has several times agreed to carry
the operating expenses of Nature Cure Health Resort until its
financial situation improves.
was paid an hourly sum of Rs 7,800 (NOK 600) for his time and
contribution to this project. In 2001 other foreign investors to
this project agreed to convert his time and expenses into shares
worth Rs 9.1 million (US $ 95,000.). The audit team asserts that
it is not known to what extent the Central Council of WIF has been
informed about the main aspects of these investments, especially
about the financial issues affecting WIF and Fjortoft's shares
which are now return based on time spent in a purely commercial
venture. This alone is in serious violation of the statutes on
which WIF was founded in 1979.
to its statutes, the income and property of WIF shall be applied
solely for the promotion of its objectives and no part of it
"shall be paid or transferred directly or indirectly by way
of dividend, bonus or otherwise howsoever or by way of profit to
the members of the Foundation."
Norwegian auditors meantime also found that the accounting
standards, the internal control procedures and the financial
management of WIF are extremely weak. "The accounts presented
are therefore not in accordance with International Accounting
Standards (IAS)," they wrote, which is a requirement of the
framework agreement. The financial accounts of WIF also "lack
credibility," the auditors stated.
this being the case for several years, WIF's auditor, Amerasekera
& Co., chartered accountants has for each year given a 'clean'
audit report. In fact, NORAD found to its dismay that the audited
project accounts submitted by Herman Amerasekera, do not render a
asked to carry out a reconciliation of audited accounts for 1999,
2000 and 2001 in order to verify that the accounts represented
actual and relevant expenditures on each project, WIF, courtesy of
Herman Amerasekera, presented in late October 2002, new figures
for several of the projects. In a few cases these new project
accounts deviated by
more than Rs. 13 million (NOK 1 million) from those previously
submitted to NORAD as audited project accounts. The new figures
also showed that some of the reallocations made by WIF of previous
years project expenditures have been in violation of the framework
agreement with NORAD.
Norwegian audit team also discovered that the commercial entities
in the WIF system are characterised by "a non-transparent
ownership structure, lack of company and share registrations, use
of inflated assets as equity not verified by auditors, and missing
has in fact contributed substantial amounts of money to the
operations of these ventures as unsecured loans and advances. Most
of these loans and advances, the Norwegian audit team asserted,
have been lost and will have been written off in accordance with
international accounting standards.
foreign auditors found that WIF has not acted in accordance with
the framework agreement by substantially allocating project funds
without prior consent from NORAD, of which two such allocations
amount to Rs. 19.5 million (NOK 1.5 million.)
that WIF has presented YATV programme budgets to NORAD as
"cost of production" when in fact they were actually
'prices' with a profit element of up to 50%. Furthermore, that the
duration of programmes were shorter than paid for and include a
substantial reuse of old material. It is estimated that WIF and
YATV have made a net profit of Rs.195 million (NOK 15 million) on
programmes produced for NORAD under the framework agreement for
the last four years.
draws a monthly salary of Rs. 768,000 (US$ 8000) and his monthly
travel perdiem and other costs amount to an average of another Rs.
672,000 (US$ 7000).
top of that, annual pension premium payments for Fjortoft and Rune
Hersvik, Secretary General of Worldview Rights, WIF's sister
organisation in Norway, were charged to the NORAD project account
under the "implementation of social security." These
were for as much as Rs. 4.3 million (NOK 330,000) a year adding up
to almost Rs. 13 million (NOK 1 million) in the last three years.
international audit firm has also found that WIF has charged to
the NORAD project accounts for non-project activities, like
advances of Rs. 12.4 million (NOK 960,000) for Personal Digital
Assistants (PDA) and software from MediaSolv. Records indicate,
however, that Worldview has only been invoiced for approximately
Rs. 8.6 million (US$ 84,000) for software with no invoices issued
or payment made for delivery of PDAs.
reports have also been submitted to NORAD that a fully functional
international training center was operational, while in fact the
grants by NORAD amounting to an estimated Rs. 78 million (NOK 5.6
million) had been used solely for the construction of the new WIF
building at Battaramulla.
Rs. 78 million was released by NORAD to WIF to construct and fully
equip an international training center in Colombo and to carry out
distance education training for NGO's and the media.
Norwegian auditors further determined that WIF has charged to the
NORAD project accounts fees
for a number of consultants without proper documentation or
contracts. Furthermore, NORAD
project account has been charged for fundraising and promotional
activities including payments to avoid a court case with a former
employee which amounted to approximately Rs. 2.5 million (NOK
foreign audit team concludes, that WIF "is in deep financial
and organisational crisis and maybe technically bankrupt."
The implication of this could be that possible repayment to NORAD
at the end of the framework agreement period in December last
year, is a near impossibility. Also, that WIF is in acute need of
funds to settle its debts and carry on its development programmes.
In the opinion of the audit team through its findings it states
WIF "has lost much of its credibility."
is a man of great integrity..." - Amunugama
Alliance Parliamentarian and Acting President, Central
Council at WIF, Dr. Sarath Amunugama strongly defended Arne
Fjortoft. "I know personally that Arne is a man of
great integrity and he has sacrificed a lot. I don't think
anybody in Sri Lanka who knows Arne Fjortoft will doubt his
integrity and commitment." Amunugama said.
that he knew "little about the nuts and bolts of the
operation at WIF," Amunugama however reiterated that he
is certain Fjortoft is not using him or other political
personalities to whitewash serious financial discrepancies
to Amunugama "There are two factions within WIF - the
dissenting faction is led by Gowrie Ponniah who is trying to
oust Fjortoft who founded WIF and remains its Secretary
alluded that the two audit reports by Norwegian audit teams
"are not yet conclusive and we are awaiting a final
decision on this issue to be communicated to us by the
Norwegian Foreign Ministry."
claimed that the new Rs. 78 million WIF building at
Battaramulla "is a training centre for media
personnel." He maintained that many young people are
trained here at the offices of YATV which are housed in the
quizzed on the findings of the audit team alleging that YATV
false production costs and siphoned elsewhere Rs.38 million.
Amunugama responded, "these things happen with big
companies - I really do not know about that."
insisted that he took over as Acting President of the
Central Council at WIF only a few months back when the
organisation was facing deep crisis and they needed someone
to stabilise the situation. " I figured I owed it to
the media outfit, given my previous experiences at UNESCO in
the media field," he said.
asserted the crunch decision could now be one of three for
WIF. Either, he said, NORAD will continue to fund WIF in
full under a new agreement, or they will have an agreement
with a lowered contribution or, finally may completely break
off relations as a funding agency.
are awaiting the decision of the Norwegian Foreign Ministry
on this," Amunugama said, adding "NORAD is not our
sole funders - we have others too."
if he is willing to take responsibility in the event the
decision of the Norwegian Foreign Ministry is detrimental,
Amunugama replied evasively, "I only took over when
this whole mess had erupted and I did it in good
told the Norwegian Foreign Ministry has in fact taken a
decision with regard to funding by withdrawing all future
funding via the Norwegian government for WIF, Amunugama was
taken by surprise. "I did not know about this," he
said, adding however "Fjortoft is bound to
continued to defend Fjortoft asserting that "it has
been a well known fact within the organisation that Fjortoft
held shares in his name in subsidiary companies of WIF."
Amunugama claimed he is not familiar with the organisation's
articles of association to know if Fjortoft has indeed
violated the very principles on which WIF has been founded.
strongly denied that he is serving as Acting President
of the Central Council at WIF for personal gain. "I have
not gone on a single free trip since I took office at WIF -
I have not even travelled to Norway for the last
five or six
years," he said. The former minister added that
he has also not been compensated a single cent for his time
and energy devoted to handling the crisis at WIF over these
last few months.
breach of framework agreement"
- Fjortoft's lawyers
Advokatfirmaet Steenstrup Stordrange DA appearing on behalf
of Arne Fjortoft state in his defence that WIF has not
deliberately attempted to overlook any problems in the
foundation. "On the contrary, WIF has shown its ability
to take action as soon as possible when any problems have
arisen. WIF's management has clearly shown their
responsibility by rectifying problems immediately when they
that there have indeed been financial irregularities
committed, the lawyers have responded asserting, " The
foundation's finance department today has a new management
and new routines with stricter internal control procedures,
in addition to taking into use a new accounting system which
has been especially developed for them."
lawyers add, "it is difficult to see that WIF could
have done more than they already have done, and this even
before the NCG report was completed. Because WIF acted as
quickly as possible when problems arose and implemented
measures to rectify the problems, it must be concluded that
there is no breach of the framework agreement in this
claims concerning Arne Fjortoft that "Arne is a man of
great integrity and he has sacrificed a lot. I don't think
anybody in Sri Lanka who knows Arne Fjortoft will doubt his
integrity and commitment." the audit report and answers
filed by lawyers with a different version show that Fjortoft
appears to have indulged in unethical practices by owning
shares in companies where WGM and WIF had invested money. It
is not clear on what basis these shares were allocated to
Fjortoft. We list below some of the points raised by the audit firm.
the entity hired by the Norwegian Ministry of Foreign
Affairs alleges that Fjortoft's pension payments totaling
millions of rupees were illegally charged to the NORAD
capacity building project. An allegation denied by Fjortoft
in his response to the Norwegian Foreign Ministry.
allegation against Fjortoft is that he personally benefited
when one of the companies under Worldview Global Media
granted him 5% of the shares based on a request made by him
to the board in 1999. Once this was discovered by the
auditors, Fjortoft claimed that he had returned the shares
claiming he was not aware that he personally owned shares.
The fact is up to date he still owns these shares.
WIF company - Nature Cures Health Resort Ltd., owns an
island off Beruwela. In an attempt to hide his interest in
this company Fjortoft claims that he had given a personal
loan. However, board minutes of January 19, 2002 of the
company states that he had been allocated shares. Fjortoft
in his response to the Norwegians claims that the board
minutes are inaccurate.
was paid an hourly rate of Rs 7,800 (NOK 600) for his time
and contribution to this project. In 2001 other foreign
investors to this project agreed to convert his time and
expenses into shares worth Rs 9.1 million (US $ 95,000.).
The audit team asserts that it is not known to what extent
the Central Council of WIF has been informed about the main
aspects of these investments, especially about the financial
issues affecting WIF and Fjortoft's shares which are now
return based on time spent in a purely commercial venture.
this while he was also pocketing a princely sum of over Rs.
1 million every month as salary and expenses.
act by Minister
every cabinet, there is at least one minister who makes a
habit of putting his foot in his mouth. The Mass
Communication Minister, Imtiaz Bakeer Markar appears to have
taken that role in Prime Minister
Ranil Wickremesinghe's cabinet.
the ongoing investigations by Norway, the Minister in
November last year wrote a confidential letter to Minster of
Development Cooperation, Ministry of Foreign Affairs in
Norway, Hilde Frafjord Johnsen.
the letter he expresses concern that funding from Norway to
Worldview International Foundation "has been reduced
for 2002 and that only a portion of the amount pledged for
this year has been disbursed due to a technical and
financial audit which is still going on."
Markar shamelessly and with no sense of responsibility wrote
that as a result of this audit he understands WIF is now
coming to a critical point with its future at stake. He
arrogantly asserted that "it with this in mind I regard
it my duty to keep you informed. I am in particular
concerned of the negative influence it might have for media
development in Sri Lanka if Worldview has to cease its
Sri Lankan Minister went one disgraceful step further,
stating, "My concerns are also related to the ongoing
peace process, which urgently need more support from media
in general, and from Worldview and Young Asia Television in
particular, as there is no other institution to take their
to say, both the peace process and the development of the
media are in bigger danger from ill-informed ministers who
write pompous letters backing NGOs with questionable
reputations, than from WIF ceasing its activities.
received from donor agencies
by Worldview International Foundation for the
year ending December 2001
and project funds
Agency for International
2, 244, 657
of Foreign Affairs - Norway 209,904
and Social Commission for Asia and Pacific
International Development Agency 171,316
Fund for Agricultural Development
Planning Association of Sri Lanka 11,192
S. Embassy - BOTSWANA
Barna - Sri Lanka 5,170
Nations Development Fund for Women 27,224
Nations Fund for Population Activities
and Agriculture Organisation