No requirement for Rakna Arakshaka to obtain cabinet approval to enter into agreement with Avant Gar

Monday, 25 January 2016 00:00 -     - {{hitsCtrl.values.hits}}

The Presidential Commission of Inquiry investigating alleged wrong doings of Rakna Arakshaka Lanka Ltd., had on Friday summoned Defence Secretary Karunasena Hettiarachchi and Cabinet Secretary Sumith Abeysinghe to give evidence before the said commission. Former  Defence Secretary Gotabhaya Rajapakse being a noticed party in this inquiry was also present and in attendance before the said commission.

Counsel for Avant Garde Maritime Services (Pvt) Ltd, Nishan Premathiratne stated that Sumith Abeysinghe had submitted to the Commission that state owned limited liability companies do not require special cabinet approvals pursuant to the company being incorporated subject to cabinet paper to thereafter enter into commercial agreements or commercial transactions in respect of the of the objects of the company.

Furthermore Abeysinghe had also submitted and drawn analogies to SriLankan Airlines and stated that even for such an institute which is fully owned by the state, pursuant to the incorporation of the said company that there were no further requirements of obtaining cabinet approvals to enter into commercial contracts as when it is required to enter in commercial contracts in the nature of buying or leasing airlines as they were part of the primary objects of the said company.

Nishan Premathiratne stated that this is pivotal in the light of the certain publications in the media which had reported that there was no cabinet paper passed approving Rakna Arakshaka Lanka Ltd to enter into agreements with Avant Garde Maritime Services (Pvt) Limited in respect of the agreements entered between Avant Garde Maritime Services  and Rakna Arakshaka Lanka Ltd in respect of the several projects between the two companies  including the Galle floating armoury

Premathiratne stated further that a  fully owned limited liability company having its objects complimenting the cabinet approval which has its own board of directors to run and manage the company can act and enter into commercial contracts  in line of its objects found in its memorandum of association without seeking any further cabinet approvals. This ensures that state owned companies to effect expeditious business decisions to facilitate commercial transactions effectively, Premathiratne stated. The inquiry will be revisited 12 February.