Home / TOP STORY/ Hunter gets hunted?

Hunter gets hunted?


Comments / {{hitsCtrl.values.hits}} Views / Monday, 14 December 2015 00:00


Untitled-7 A JVP Provincial Councillor has turned the spotlight on public interest litigant and prolific author of several books on anti corruption and fraud,  Nihal Sri Ameresekere, regarding the  latter’s receipt of an overdraft of Rs. 100 million from the Bank of Ceylon backed by the Treasury in the last month of the previous regime.

Western Provincial Council Member Asoka Ranwala has notified the Financial Crimes Investigation Department (FCID) and the Commission to Investigate Allegations of Bribery and Corruption (Bribery Commission) of a range of allegations against Ameresekere.

The questionable request for a Rs. 100 million overdraft facility from the Bank of Ceylon was made on 9 December 2014, just a month before Presidential Election. According to the complaint by the JVP Provincial Councillor, Ameresekere’s request on 9  December for a Rs. 100 million overdraft from BOC was by the following day (10 December) morning required to “meet certain urgent commitments.” 

Ameresekere had said that the overdraft facility “will be regularised before a period of one month with the release of certain monies being paid to me by the Treasury, which is now in final processing stage.”Untitled-8

The Finance Ministry and the Treasury have had no objections to  BOC granting the Rs. 100 million facility to Ameresekere, which according to Deputy Secretary to the Treasury S.R. Attygalle, was in view of the proposed final settlement in lieu of the all claims with respect to Hotel Developers Ltd.(HDL), which was acquired by the Treasury under the Expropriation Act of 2011.  Attygalle via a letter dated 15 December 2014, had informed BOC that the final claim amount will be remitted to the Bank upon finalisation of the claims. 

The complaint by the JVP Provincial Councillor had questioned the timing of the payment and facility by BOC,  the backing by the Treasury for a loan by an individual,  the modus operandi, lack of transparency on the part of Treasury, HDL as well Ameresekera. The JVPer had also asked authorities to probe whether there were any political reasons for the payment.

The temporary overdraft of Rs. 100 million for 30 days was granted by BOC on 15 December 2014 at an interest rate of 24% per annum.  

The Competent Authority of HDL following the Treasury takeover Senaka Walgampaya PC, has also raised various issues over the payment in addition to attaching observations by  former Finance Ministry official V. Kanagasabapathy in connection to a 2006 MBSL report on claims for compensation by Ameresekere over Hilton and HDL cases. 



According to the complaint by the  JVP Provincial Councillor,  Ameresekere had been previously paid Rs. 7 million from the Government for professional input though most of the cases filed by the latter was in the public interest. It was also pointed out that Ameresekere’s  actions were also instituted as a shareholder (he was also a Director and Chairman at different times) hence seeking compensation was a departure from best practices. 

When contacted for a clarification by Daily FT, Ameresekera, who is the Sri Lanka Coordinator of the International Association of Anti-Corruption Authorities, a Certified Fraud Examiner and a Chartered Accountant, said “ There are legally binding contractual agreements.” He declined to comment further. 

Ameresekere as former Chairman of Public Enterprise Reforms Commission (PERC) and Finance Ministry advisor, has been widely viewed as a crusader against corruption and had filed multiple cases in the public interest against failed privatisation exercises by previous governments. He has been a longstanding campaigner against various malpractices and lapses involving the construction of Hilton in Colombo and subsequent issues. 

Apart from the famous derivative actions, holding shares and as a Director, he also filed a case for liquidation of Hotel Developers.  After the Company was acquired under the Expropriation Act, Ameresekere also filed a case against the Act challenging its constitutionality. Via various actions, Ameresekere has previously stated that he had saved billions of rupees for the State on account of issues concerning Hilton.

The 2006 report by MBSL followed Ameresekere claims to the Government in respect of services rendered on matters connected to Hilton/Hotel Developers litigation comprising a) compensation for actions and efforts  which resulted in write offs ($ 207 million or Japanese Yen 17.6 billion), reduction of interest rate from 6% to 5.25% and re-scheduling of loans of 15 years; b) compensation for efforts and cost incurred since July 1995 in assisting and defending the interest of Government and  HDL in the litigation instituted or caused to be instituted by Cornel and Company, one of the promoters of HDL then.  The Cabinet appointed Negotiation Committee in 2005 had recommended compensation to Ameresekere. 

The 2006 report by MBSL stated that it was apparent that Ameresekere has not initiated derivative actions or provided any assistance with the intention of obtaining any financial benefit from the government or HDL and all his actions were based on matters of principle in the interests of HDL/the Govt. 

At the same time neither HDL nor the Govt. had assigned Ameresekere to institute such actions or provide assistance for any agreed fee or payment. Therefore any financial benefit recommended is solely in recognition of his endeavours and efforts in respect of such actions and assistance which had benefitted the Govt/HDL.

The report also states that if the government had not agreed or entered into the settlement agreements in 1995 based on which Ameresekere’s action have been settled and withdrawn or if CANC has not recommended to compensate Ameresekere for such actions which resulted in write off, there was no necessity for any compensation or costs to be paid to Ameresekere, as neither the Govt. nor HDL had assigned him to institute such actions or agreed any fee. Further the actions and efforts of Ameresekere had not only benefitted the government and HDL but also Ameresekere as a shareholder of HDL, the report said.

It said that in respect of Ameresekere’s claim, he be compensated within the range of 0.1% to 0.75% of the benefit obtained by the government and HDL as a result of the write off of Japanese Yen 17.57 billion or Rs.10.2 billion as at June 1995. However the Treasury can consider a higher rate of compensation, up to 2%, taking in to consideration Ameresekere’s valuable services, the relationship the Government wishes to continue with him in the future,  and any other relevant factors. The MBSL report had also indicated the appropriate number of shares to be allocated if the amount is converted into equity.

However former Finance Ministry official and former Director of HDL, Kanagasabapathy has stated in August 2012 (after the Expropriation Act was passed) in the absence of any settlement being reached on the dispute relating to HDL, no further action was taken on the report of the MBSL.  

This was after Ameresekere in July 2012 wrote to HDL and Treasury reiterating his rightful and legitimate entitlement under contractual agreement signed with the Government and others. 

After the takeover under the Revival of Underperforming Enterprises or Underutilised Assets Act, No. 43 of 2011 and with all litigations withdrawn, HDL and Hilton signed a fresh operating agreement in October 2012 until December 2019 and extendable up to 2037 by mutual consent.


Share This Article


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Greening China and BRI: Chinese legal framework for sustainable environment protection

Tuesday, 20 November 2018

The concept and scope of greening the belt and road The Greening BRI is to add the ‘greening’ notion along with the ‘BRI’. Building a ‘Greening BRI’ means adhering to the concept of green development, balanced development, harmony betwee


Political evil paralysing Parliament

Tuesday, 20 November 2018

Our politics has arrived at a point when we must insist on recognising the niceties of human nastiness. Organised horror in Parliament is either trivialised or ignored by most of mainstream media print and electronic. What unfolded in Parliament las


10 theses on Sri Lanka’s existential crisis: Roots, dynamics, dimensions

Tuesday, 20 November 2018

1.The crisis has deep national, social and psychological roots. Our island contains two consciousnesses or two types of consciousness, two competing states of mind. Contrary to myth, the periphery of our island has the longest uninterrupted colonial


Make toilets and safe sanitation services accessible to all

Tuesday, 20 November 2018

All people everywhere should have access to safe sanitation services, including hygienic toilets that are connected to quality sewage systems. For many people across the WHO South-East Asia Region, as across the world, access to these services never


Columnists More