ISSN: 1391 - 0531
Sunday, October 15, 2006
Vol. 41 - No 20
Financial Times

Tea sector jolted again

It happened after all. Some months back, in this column while criticising the decision to victimise former Tea Research Institute Director Dr Ziyad Mohamed, we alerted the tea industry to another disaster in the making – the ‘harassment’ of H. D. Hemaratne, Director-General of the Sri Lanka Tea Board.

We said that he was another officer working under tremendous pressure and was likely to be given the same treatment that Dr Mohamed received.

True to our words, Hemaratne was on Tuesday unceremoniously sent on compulsory leave by Tea Board chairman H.A.C Abeywardene on some flimsy charges.

It was an unfortunate end to an officer who according to all accounts from the tea industry and even sections of the government is an honest officer and was above board. The industry has expressed shock at the move while private sector representatives on the board were awaiting a clearer picture of the situation.

What led to this situation? When Dr Mohamed was put through the trauma of being sent to a detention cell, ordered to go on compulsory leave and fraud charges brought against him in April, we learnt about the ‘victimization’ of Hemaratne too. According to industry sources, the Tea Board Director General has been questioning a lot of issues dealing with transactions by the chairman, the working director, the chief internal auditor and the tea commissioner. He has nipped in the bud scams relating to rubbishy teas being exported by what is called the “Gampaha (tea trade) mafia”, among other issues.

The industry says his integrity is unquestionable but – as in the case of Dr Mohamed – fraud charges are about to be framed against him.

There are a lot of discrepancies in what the Tea Board chairman who owns a TV station, has told this newspaper. For example he says the board doesn’t come under the Plantations Ministry. That’s incorrect. The Board comes under the Ministry and its Secretary is the chief accounting officer of all institutions, boards and agencies that come under the Ministry. There is also some doubt as to whether he followed proper procedure, as our story explains, in sending an officer on compulsory leave without a proper inquiry.

Hemaratne has worked at the board for the past 30 years without any blemish to his career and to be given this treatment without proper procedure is the unkindest cut of all.

Another issue that needs to be addressed is the role of the private sector directors on the Tea Board. Even though a sizable segment of the funding of the Board activities comes from the cess paid by the industry, these directors – appointed by virtue of positions they hold in the industry associations – are like “toothless tigers”.

They don’t have any power and the chairman of the board as the practice has been has full authority over the affairs of the board, in appointments and dismissals. It must be said that the appointment of private sector representatives on the board is a practice adopted more than 10 years ago by the then minister as it was felt that private sector input would be useful to efficiently run this organization. However the question begs to asked, shouldn’t such directors take some responsibility for the affairs of the board and at least ask about Hemaratne’s situation? In the private sector, the keyword is governance, transparency and accountability. Directors of listed companies are under tremendous pressure from the Securities and Exchange Commission for more transparency in the affairs of a company. Recent changes to ensure this includes the compulsory appointment of independent directors to companies.

Governance and transparency is also being called for in state institutions and in this case where private sector representatives are appointed directors, they need to be given more authority to ensure that the institution is run well. As one veteran tea industry official said many are shocked by the turn of events at the Tea Board. The authorities must, in line with the rules, serve a charge sheet on Hemaratne and complete the inquiry as fast as possible instead of delaying the process.

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Copyright 2006 Wijeya Newspapers Ltd.Colombo. Sri Lanka.