ISSN: 1391 - 0531
Sunday, December 03, 2006
Vol. 41 - No 27
Financial Times  

Jayawardene makes an appearance

"When I attended the meeting on 27.11.2006, I was shocked to see the presence of two 'intruders', the representatives of the 'Buyers Consortium' of SLIC."

Harry Jayawardene and Damian Fernando, Chairman and Director of Sri Lanka Insurance Corporation (SLIC) made a surprise appearance at the COPE subcommittee inquiry on Monday on the investigation into the privatization of SLIC.

Despite only relevant officers of the "then" SLIC having been asked to attend the inquiry, Jayawardene and Fernando took it upon themselves to show up and address the subcommittee. In a letter dated 30 November 2006 from former PERC Chairman Nihal Sri Ameresekere to Dilan Perera, Chairman of the Subcommittee which The Sunday Times FT is in possession of, Ameresekere wrote, "When I attended the meeting on 27.11.2006, I was shocked to see the presence of two 'intruders', the representatives of the 'Buyers Consortium' of SLIC."

The letter goes on to state that since the inquiry had not yet commenced and to avoid causing any embarrassment, Ameresekere met with PERC Chairman, W.M. Bandusena and suggested he inform Jayawardene and Fernando that "relevant officers of the then SLIC" does not refer to them. After discussions between Bandusena and Jayawardene and Fernando in a private room, the two nevertheless proceeded to the meeting, chaired by the Secretary to the Ministry of Public Enterprise Reforms & Skills Development, P.H.G. Premasiri.

Others present at Monday's inquiry were the Assistant Auditor General, PERC Director of Evaluation & Monitoring, E. Arumugum , representatives from PricewaterhouseCoopers (PwC) including Partner M. Haren and representatives from Ernst & Young including R. Fernando. Bandusena, at the request of Dilan Perera, had previously asked the above individuals to attend. The representatives from the two accounting firms were asked to be present to compute the working capital difference, Ameresekere and relevant officers of the then SLIC were meant to provide required information and documentation and the Auditor-General was asked as an observer in the computation of the working capital, informed sources said.

Ameresekere says that at the very outset, Jayawardene acknowledged that he and Fernando had no status to be present at the meeting but remained and went on to make several statements in an indignant demeanor, singling out Ameresekere. He wrote in the letter that Jayawardene was "making statements which appeared to be 'veiled threats' of intimidation, I believe, to inhibit me and 'instill fear'; and also those others, particularly officers of PwC and Ernst & Young, who had been directed by the committee to specifically compute the working capital difference," pertaining to the SLIC's accounts.

Jayawardene said he was aware of Ameresekere's statements to the committee and further accused Ameresekere of giving information to the media, including a statement Ameresekere claims he never made. "In addition, he (Jayawardene) asserted that as a former Chairman of PERC, I should not disclose information which was confidential. He also asserted that there was an Agreement and action ought to be taken according to that Agreement." He further claimed that discussions and committees were futile and had no binding effect on them. Ameresekere further writes, "Mr. Damian Fernando too made statements in a huff. Would not the foregoing tantamount to an 'affront' to COPE, a Parliamentary Committee, and an endeavor to prevent/scuttle action that is sought to be taken in this matter in the national and public interest and tantamount to be contemptuous of the Committee of Parliament, subjecting it to mockery and ridicule?"

If the purpose of Harry Jayawardene's outburst at the COPE subcommittee inquiry was to intimidate those present at the meeting, particularly Ernst & Young and PwC, ‘let's hope it does not serve its purpose,” one source said. Confirmation was given to Ameresekere from the International Accounting Standards (IAS) Board specifying that the SLIC Accounts of 31 March 2002 to 11 April 2003 were not in conformity with IAS standards which require the disclosure of 'current assets' and 'current liabilities' as separate entities.

Furthermore, the government of Sri Lanka is prohibited from entering into agreements with private companies. Milford Holdings (Private) Limited, incorporated under the laws of Sri Lanka and Greenfield Pacific EM Holdings Ltd, a company incorporated under the laws of Gibraltar are purchasers of SLIC. Moreover, Greenfield Pacific EM Holdings Ltd, was incorporated in Gibraltar on 28 March 2003, two weeks before the privatization of SLIC. If these two companies had been evaluated by the Technical Evaluation Team instead of Distilleries Company of Sri Lanka (DCSL) and Aitken Spence, two publicly quoted companies and purchasers of SLIC, this deal should have never taken place. (NG)

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Copyright 2006 Wijeya Newspapers Ltd.Colombo. Sri Lanka.