Death knell for bogus degree awarding institutions

By Arthur Wamanan 

The government is in the process of preparing a policy framework that would prevent bogus education institutions from granting qualifications, Higher Education Ministry officials said.

The Ministry last week said it had decided to ban 10 such education institutions from giving bogus doctorates and degrees. The decision to ban the institutions was taken following recommendations by a cabinet sub committee appointed to look into the matter.

The Ministry released the list of educational institutions that are to be banned from giving doctorates and degrees. They are Sri Lanka Vishwa Samadhi Foundation, Jathika Sammaana Upadhi Sarasavi Aayathanaya, Sri Jayawardenapura Commemoration Foundation (Battaramulla), Dharmapala Olcott Commemoration Foundation, International University for Alternative Medicine, Sri Jayawardenapura Lanka National Cultural Foundation, Multi National Peace Organisation, All Communities United Organisation, Samaja Subha Saadhana Acharya Upadhi Aayathanaya and Saamadhaana Vinishvayakara Maanava Himikam Sanvidhaanaya 

Bogus institutions

Higher Education Minister Professor Vishwa Warnapala told The Sunday Leader that a National Qualification Framework was now being formulated and that the government would amend the University Act in a way that would not allow bogus institutions to confer doctorates and degrees in the future.

He added these bogus institutions had deceived many people and that the qualifications are not recognised in Sri Lanka.

Prof. Warnapala, who was also one of the members of the sub committee said the government had already taken steps to amend the University Act. “The legislation is to be prepared. And President Mahinda Rajapakse will introduce new regulations on this issue through a Gazette notification soon,” Prof. Warnapala said.

Plantations Minister D.M. Jayaratne a few months ago submitted a cabinet paper to probe institutions that provide bogus qualifications. The cabinet in turn appointed a committee of officials to probe into the matter.

Smaller than boutiques

Secretary to the Officials’ Committee, Indrani Sugathadasa told The Sunday Leader that most of these so-called education institutions are badly maintained in places smaller than boutiques.

She said the bogus education institutions used several tactics to attract people. “They get hold of persons who are socially accepted. They invite them for their functions and award ceremonies,” Sugathadasa added.

The officials committee after probing the matter handed over a report to the minister’s committee with recommendations.

The officials’ committee had recommended an Act of Parliament, preventing these institutions from conferring bogus qualifications and the University Grants’ Commission (UGC) to take action under the already existing provisions in the constitution.

“The new Act is now being drafted. These illegal education institutions use a lot of methods to attract the public. For example, they use certain people who are socially accepted. Most of these institutions are maintained in small places. Smaller than boutiques,” Sugathadasa said.

Bogus qualifications

In Sri Lanka, the UGC accepts the degrees that are recognised by the Commonwealth nations and those awarded by the local universities.

UGC Chairman, Prof. Gamini Samaranayake said students often face problems in Sri Lanka due to bogus qualifications. “Several students have been given such degrees and doctorates by these bogus institutions,” he said.

However, no decision has been reached on the students who have already been given qualifications by the said institutions. “We are yet to take decisions on those who have already got ‘qualifications’ from these places,” Sugathadasa added.

The International University for Alternative Medicine (IUAM) has also been listed by the Ministry. Dr. Geethanjana Mendis said the IUAM was part of the International Open University and was registered with the government under the Companies Ordinance.

“It is a BOI project. This has been functioning since 1962. We have one base in Sri Lanka and in several parts of the world. The government has not informed us officially on the matter. We got to know this through the media,” he said.

He said there were nearly 4,000 acupuncture specialists from the IUAM serving in the health sector. “We are recognised internationally,” he added.

“Have faith” — Asian Finance tells depositors

By Dilrukshi Handunnetti 

Following our article titled  “Now Asian Finance playing truant” that appeared on Page 8 in The Sunday Leader issue of August 9, Deputy Chief Executive Officer, Sanathana Dalugoda visited this newspaper to share some thoughts that he felt should be conveyed to the general public, more so to the depositors.

He alluded that certain facts reported in the article were incorrect and spoke of a repayment plan for all depositors and relief for preferential share holders through new schemes.

He said a panic situation was created subsequent to the Golden Key and F & G chaos that resulted in many depositors withdrawing their monies from the institution despite the availability of assets to cover the company’s liabilities.

Paid its depositors

The Asian Finance Deputy CEO impressed upon the fact that Asian Finance Limited, managed by Lankaputra Development Bank (LDB) did pay all the depositors monthly and maturity interest on Fixed Deposits as well as debenture interest without any delay, a fact The Sunday Leader did not dispute in the said article.

The newspaper article however in no way inferred the non-payment of monthly and maturity interest on fixed deposits by Asian Finance and solely concentrated on preferential share holders and their grievances.

According to him, some Rs. 25 million worth of preference shares were to be redeemed as at March 31, 2009. In addition, Asian Finance had to pay dividends on preference shares of Rs. 50 million amounting to Rs.7.6 million.

Incurred a loss

“Due to the fact that the company has incurred a loss during 2008/9, we have not paid these dividends nor redeemed the capital of Rs. 25 million,” he said.

He claimed that most of the preference shareholders were also fixed deposit holders. “As such they often request these preference shares to be considered as normal deposits. We are now in the process of taking steps to address this issue favourably,” he said.

In addition, Dalugoda further spoke of having paid off Rs. 531 million during January-March 2009 with regard to matured deposits. As of March 31, he claims the unpaid matured deposits amounted to Rs. 350 million, money invested by some 400 customers.

“In the latter part of July 2009, we have introduced a Fixed Deposit Refund Scheme for the depositors who wanted to withdraw their money. Under this scheme, the depositors’ capital and interest will be paid off in equal monthly installments over a period of 1-3 years.

 Mismatched cash flows

“We have already signed agreements for a value of Rs. 200 million,” he added, stating that this scheme would prove useful in helping Asian Finance to solve the problem of mismatched cash flows.

He also added that Asian Finance was making some plans to become a more viable business concern and shared expansion plans.

The Deputy CEO of Asian Finance said the company intended recommencing new business in the near future and a credit line worth Rs.500 million has already been approved which will be arranged through Lankaputra Development Bank (LDB).

“This will be utilised purely for recommencing business. Depositors should keep faith. Their monies are safe and the company’s future too is secure,” he added.

Negotiators not aware of cheap funding facility

By Mandana Ismail Abeywickrema 

Sri Lanka is still eligible to receive the International Monetary Fund’s (IMF)

Poverty Reduction and Growth Facility (PRGF) under concessionary terms.

The IMF had identified 78 countries as of August 2008 that were eligible to receive loans through PRGF and Sri Lanka is listed as the 63rd country in the list.

Loans under the PRGF are granted to countries that record a per capita income of US$ 1,095 (according to 2007 assessment) or to heavily indebted poor countries (HIPC).

Losing focus

UNP Parliamentarian Ravi Karunanayake accused the government of losing focus and applying for a stand by facility targeting the country’s reserves while it could have easily sought a stand by facility under the PRGF.

He explained that the government could have negotiated a loan through the PRGF programme at concessionary terms and conditions than the present stand by facility received by the IMF.

Karunanayake said that although Sri Lanka’s per capita income stands at US$ 1,918, the government could have still negotiated for a loan under the PRGF as it is also given to heavily indebted countries.

“The negotiators for the government did not know about the PRGF facility and the benefit of receiving a loan under the facility,” he said.

Assessment

State Revenue and Finance Minister Ranjith Siyambalapitiya was not available for comment.

The IMF has stated that eligibility for the PRGF is based principally on the Fund’s assessment of a country’s per capita income, drawing on the cutoff point for eligibility to World Bank concessional lending (currently 2007 per capita gross national income of $1,095).

Loans under the PRGF carry an annual interest rate of 0.5%, with repayments made semi-annually, beginning 5½ years and ending 10 years after the disbursement.

An eligible country may normally borrow up to a maximum of 280% of its IMF quota under a three-year arrangement, although this may be increased to 370% of quota in exceptional circumstances.

Balance of payment

In each case, the amount will depend on the country’s balance of payments need, the strength of its adjustment programme, and its previous and outstanding use of IMF credit. The expected average access under the initial three-year arrangement is 140 percent of quota, and 125, 110, 90, 70, and 50% of quota for second through sixth-time users of the facility, respectively.

“Low-access” PRGF arrangements with a standard level of 10% of quota may be used for members with little or no immediate balance of payments need, which still desire a Fund engagement as guidance for policy implementation.

PRGF-eligible members with per-capita income above 75% of the cutoff for World Bank concessional lending, or members borrowing on commercial terms, may combine PRGF arrangements with lending from the IMF’s non-concessional Extended Fund Facility.

Gota heads Apollo as mandatory documents readied

By Faraz Shauketaly 

Hot on the heels of The Sunday Leader headline story last week, the Ministry of Finance moved swiftly, asking the Treasury to immediately instruct  the Sri Lanka Insurance Board of Directors to constitute a new board for Apollo Hospital. The Treasury may well have been concerned that the inexperienced Pradeep Kariyawasam, Chairman, Sri Lanka Insurance, was not fully appreciative of the timelines imposed by the Stock Exchange in its requests for filings from all quoted companies.

In a swift and incisive move, Defence Secretary Gotabaya Rajapakse has been appointed Chairman along with a board that comprises Pradeep Kariyawasam, Nalaka Godahewa, S. S. L. Perera, Ajith Amarasinghe, Asoka Nissanka Pathirana and an army doctor, Sanjeewa Heman Munasinghe.

The new board, which sees tycoon Harry Jayawardena removed from it, has immediately readied its accounts as mandated by law and provided these to the Stock Exchange – all statutory requirements. For the moment, the future of Apollo Hospital is in good health.

The Colombo Stock Exchange contacted The Sunday Leader in connection with the headline story last week. The Sunday Leader stated that there was a risk that Apollo Hospital may get delisted. We also pointed out exactly what the CSE points out in their mail to us: that if a corporate body fails to furnish statutory and mandated information, that company risks being placed on the Default Board.  We would like to thank T. Jayaratne for the clarification and we state that The Sunday Leader stands by its story.