Financial Times

Drama at CIMA: Serious governance issues
Members unhappy over suspension of Operations Director Aruna Alwis

By Duruthu Edirimuni Chandrasekera

CIMA President Gowri Shankar Somasundaram and outgoing President Aruna Fernando during the installation of the new president on Wednesday. Pix by J. Weerasekera.

Followed by a stormy annual general meeting (AGM), serious question are been raised by stakeholders of the Chartered Institute of Management Accountants (CIMA) Sri Lanka regarding the corporate governance issues happening at its office.

On Thursday night CIMA had its 20th AGM followed by cocktails and dinner to inaugurate its new President, Gowri Shankar Somasundaram, which had most of the 500 plus invitees expressing horror at what was happening at an institute, which guarded governance and ethicality as pristine.

Longest ever AGM
“The AGM was the longest ever in the 43 year-old history of CIMA Sri Lanka,” an invitee who is also a Past President said. The AGM had taken such a long time and when members had questioned CIMA Sri Lanka accounts, both Aruna Fernando, immediate Past President and Bradley Emerson, CEO CIMA Sri Lanka were unable to answer.

Difficult accounts
“The CIMA accounts have been audited by H.L.B. Edirisinghe and Company, an audit firm. But the CEO was unable to give the breakdown of some information that was requested by the membership. This prevented the accounts being passed at the AGM by the members,” a member who was present at the AGM said.

From left -- Viren Wijesinghe, CIMA Divisional Deputy President, Gowri Shankar Somasundaram, President, Melanie Kanaka, Vice President and Bradley Emerson, CEO at the press briefing, the day after the AGM.

He said certain cost items had escalated during the last CIMA financial year. As a result the membership had requested an Extra – ordinary General Meeting (EGM) to be held to clarify the accounts. “A new committee has been appointed by the CIMA council to look at what has happened with the accounts. They will look into the ‘grey’ areas of the accounts and thereafter present them to the membership at an EGM,” he said, adding this will happen within a month’s time.

Governance issues
The AGM had also taken a new turn with the CIMA Council deciding to pass a resolution before the AGM regarding the ‘mismanagement of CIMA Sri Lanka’ at the local divisional Council meeting. “The resolution related to four serious governance issues,” a CIMA member said.

Blocking Director Operations (DO), Aruna Alwis’ official e-mail account, sending an auto reply on his e-mail saying he is unavailable without Alwis being aware of it when he was still in office, suspending Alwis without informing the Council and not presenting the monthly CIMA Sri Lanka accounts to the Council despite many requests by the Council were these governance issues.

Aruna Alwis

"The Council had resolved to bring these issues to the CIMA UK Council and CIMA Global CEO Charles Tilly while requesting them to empower the local Divisional Council to manage the affairs of CIMA Sri Lanka," the member noted, adding that the Council had further agreed to table this resolution at the AGM.

He said the process took place early this week and when it was informed to CIMA UK, the office bearers there had resisted taking the governance issues to the 'wider' membership, saying it was 'unlawful'. "They had said that before a resolution was tabled at an AGM, the membership needs to be informed. So, it was not in the agenda for the AGM."

However, Thursday saw a big commotion at the CIMA AGM, when the members had brought the issue up. "The immediate past President, Mr. Fernando had then mentioned that the Council had passed a resolution and they wanted it read out at the AGM. This happened when the membership had requested to read out the resolution, as they insisted they need to be aware of what was going on. They said the local Council is appointed by the CIMA membership. Therefore it is the Council's duty to inform such wider issues to the members," the member explained.

Unfair play
Meanwhile, U.N. Jinasena, a Past President had spoken at the meeting about the injustices and unfair play with regard to Mr. Alwis being suspended. A past CIMA Council member said the Council has the control over the affairs of the division. "The present Council plans to open up dialogue with CIMA UK regarding affairs here. They in London have given an assurance that it will be done collaboratively," he said.

He said the local Council had requested CIMA London to follow the correct procedure. "London has promised a full investigation before a final decision is taken on behalf of Mr. Alwis," he added.
Mr. Jinasena noted the attempts by both the local Secretariat and London Office to push Mr. Alwis out from his employment can be duly interpreted as malicious. He pointed out that it is inconceivable that the London Office has opted or supported to resort to this type of ‘twisting the elbow’ techniques without following the standard procedures followed by even the second tier companies in Sri Lanka according to the accepted laws of this country.

“If Mr. Alwis is guilty of misconduct or any other offence there is the accepted procedure of instituting disciplinary procedures against him. In fact it is his right to be heard. It is not clear why a leading professional accounting institute of international standing professing good governance has taken this tragic course of action defeating its own advocacy of good governance and adherence to the law,” he said.

A Past President said that both the local office and the London Office will have to consider carefully the serious fallout from such legal actions. “If actions by CIMA have been unfair, unjust and malicious may compel Mr. Alwis to the option of litigation,” he said. He said the London office may exercise some supervision over matters at the local Secretariat but the CEO should not have unbridled powers.
There are allegations that the CEO reported matters of importance – like in the case of Mr Alwis’ suspension – to the London office and not the Colombo council/Exco.

Foreign assistance
Interestingly Rick Sturge, Director Employer and Strategy from CIMA UK had attended the CIMA AGM. "He was more of an observer and the membership had suspected he had visited Sri Lanka to take assessment of the situation," the past Council member said.

A top business leader, who is also a CIMA member, had expressed disappointment at what was happening with regard to Mr. Alwis' appointment at CIMA. "CIMA discourages petty politics. It is a professional body. I fail to understand why certain information was suppressed from the Council and why they were not informed, when a decision was taken to terminate Mr. Alwis," he hold The Sunday Times FT at the dinner function to felicitate Mrs. Somasundaram. "Usually the Council officials are consulted, which was not done in this case and above all there was an indecent hurry to suspend him during the last CIMA financial year (when Mr. Fernando was the President), which is strange," he noted.
At the AGM, Dian Gomes, CIMA Past President and eminent business leader, heading some MAS group companies had noted the important of greater transparency in CIMA Sri Lanka affairs.

To a question posed by The Sunday Time FT at the media conference organised on Friday to introduce Mrs. Somasundaram, the new president said CIMA CEO has key performance indicators to meet and that the division is managed by him.

However she along with Viren Wijesinghe, CIMA Divisional Deputy President and Melanie Kanaka, CIMA Divisional Vice President refused to comment on any issue pertaining to the AGM. When Mr. Emerson was asked by The Sunday Times FT, he flatly refused to comment about Mr. Alwis' suspension saying, it is inappropriate to comment on a staff matter.

36th President
Ms. Somasundaram was elected as the 36th President of CIMA Sri Lanka Division at its 20th AGM, making her the second woman to head this premier institution in Sri Lanka, and also the third woman President worldwide.

Interestingly, accepting the Presidency, Ms. Somasundaram said her vision was to reinforce the professional excellence of the fraternity. “Profession First is a theme that I will be devoted to. My year will be dedicated to the advancement of the Management Accountancy Profession, to equip, elevate and enrich it”.

Some members were skeptical, saying maybe CIMA needs to look internally and iron out the current issues. She further stated, “Our discipline is in the business of creating value. Value Creation is the foundation of any business. We will advocate ‘thought leadership’ through Technical Forums where new ideas will be encouraged. We will also be driving discussions as to the enhancement of the profession in the Public Sector by facilitating our discipline to be introduced through new initiatives.

She also highlighted that business today demands intelligent and insightful professionals with a strategic vision. “Students are our future wealth. Student development and growth will thus be a major focus in developing the ideal professional the world demands”, she added.

New CIMA President
Functioning as Advisor and Business Partner to His Royal Highness Prince Mish’al BinMohammed Bin Saud Bin Abdul Aziz of the Kingdom of Saudi Arabia since February 2006, Ms. Somasundaram has been participating in business development in the Kingdom of Saudi Arabia and the Gulf Region.
Consultant and Representative of the Gulf Bureau for Research and Economic consultations in the Kingdom of Saudi Arabia, Ms. Somasundaram will soon take office as Country President for Kampac Group of Companies for Sri Lanka and the Maldives. Kampac is a group of companies in the Middle East with representation in 20 countries mainly in the oil industry, infrastructure and real estate development, telecommunications and hospitality. She is also developing a Finance and Restructuring Consulting Company in the Bahrain mainly for the SME sector. She travels widely to GCC countries consulting in International Finance and Business Development

How Aruna Alwis was suspended
The Sunday Times FT learns that Hayley Macdonald from the HR section of CIMA London Office together with Mr. Emerson had met with Mr. Alwis and had informed him that she was carrying a message from Mr. Charles Tilly, CEO,CIMA London that Mr. Alwis must tender his resignation and that they will compensate him with a salary of 12 months. Further, Ms Macdonald wanted Mr. Alwis to leave office then and there, all of Mr. Alwis had refused to do. Also a subsequent request to Mr. Alwis to give his decision (on that particular afternoon) also had been turned down by him as he needed time to respond to a matter involving his career and the future.

Mr Alwis was not available for comment but his colleagues say he is contemplating legal action against CIMA depending on the outcome of an inquiry that CIMA has said it will conduct.


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