Nalaka Godahewa, the controversial Securities and Exchange Commission (SEC) chairperson, who this week said he was not a political appointee, has resigned from his position, Finance Minister Ravi Karunanayake said on Wednesday night. He told the Business Times that Godahewa had resigned the same day a newspaper article appeared saying he was a non-political appointee. [...]

The Sunday Times Sri Lanka

Fuel prices fall, former IMF chief in CB payroll and fisticuffs at Ceylinco Insurance shareholders’ meeting

Major news developments this week

Nalaka Godahewa, the controversial Securities and Exchange Commission (SEC) chairperson, who this week said he was not a political appointee, has resigned from his position, Finance Minister Ravi Karunanayake said on Wednesday night. He told the Business Times that Godahewa had resigned the same day a newspaper article appeared saying he was a non-political appointee.

“There is no reason for the capital market regulator to hand over his resignation after an election. We do not engage in politics,” he was quoted as saying in the Daily Mirror.

But Mr. Karunanayake said, “Many chairmen want to stick on but they were all asked to resign, and they should resign.”

He said ‘people can drop names but that will not work’. Former SEC chairperson Thilak Karunaratne, who quit under pressure allegedly from the stock market mafia, is tipped to be re-appointed.

The SEC, which came under the Finance Ministry, now comes under Prime Minister Ranil Wickremesinghe’s purview.

Galle Face land sales cash went to Defence Ministry account against regulations, Treasury sources say

Former Defence Secretary Gotabaya Rajapaksa’s contention on Monday that money from the sale of land at Galle Face went into a special Defence Ministry account was against all Treasury regulations, informed sources.

Treasury sources, who declined to be named, said all such monies must be sent to the Treasury and the Consolidated Fund. ‘It is only thereafter that it is transferred to the respective projects. If this money was directly sent to a Defence Ministry account, then it violated standard regulations,” one source said.

Rajapaksa’s statement was issued by him and carried in a few websites in response to new Finance Minister Ravi Karunanayake’s accusation that a large sum of money had been in a Bank of Ceylon account under the former Defence Secretary’s name.

The former Defence Secretary denied the allegation and has said this was a Defence Ministry account that was opened with cabinet approval with the money used for the construction of the military headquarters at Pelawatte.

However Treasury sources also referred to comments by Deputy Economic Development Minister Lakshman Yapa Abeywardane (over the years) that they have not received the money, which should have been deposited with the Treasury. “We have been waiting for this money. Now it seems it had been directly sent to this account violating stated rules,” one source said.

CB monetary policy review next week, changes likely

The Central Bank said today (Monday) that its Monetary Policy Review for January 2015 will be released next week on Tuesday, January 27, the first one under the new President Maithripala Sirisena-led Government.

No other details were given. Bankers said that most likely a new Monetary Board would have been appointed by that time with the new Governor Arjuna Mahendran assuming office sometime this week. Some changes in the policy are also likely, they said.

The board included Governor Ajith Nivard Cabraal (Chairman) and Treasury Secretary Dr. P. B.Jayasundera, who have (both) resigned. Other members – Ms. Manohari Ramanathan, Nimal Welgama and Neil Umagiliya are also expected to be replaced.

At the last review released on December 12, the Board decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank of Sri Lanka unchanged at 6.50 per cent and 8.00 per cent, respectively.

Sri Lanka’s Access shares fall on cancellation of mega highway

Access Engineering shares fell by 11 per cent or Rs. 3.40 per share to Rs. 26.60 on Monday at the Colombo bourse days after the new Sri Lankan Government announced the cancellation of a major highway project.

Traders appeared to panic with more than 800 separate transactions all amounting to 3.4 million shares at a turnover of Rs 95 million. Access is one of the most powerful contractors in the country and involved in several major road, highway and other development projects.

At the weekend, the new Government of President Maithripala Sirisena – dismantling some of the costly projects of the former administration – said it was cancelling the proposed northern expressway project saying it was too expensive. Five contractors including Access had been selected for the project.

Top barrister with Lankan roots hired by the CB

The skeletons are quickly coming out of the Central Bank (CB) cupboard with news of another high profile contract involving a well-known barrister from the UK with Sri Lankan roots.

Sir Desmond de Silva, QC, the Business Times reliably learns, was paid a fee of UK sterling pounds 60,000 per month (about Rs.12 million) to prepare a strategy for the regulator on how to counter human rights issues against Sri Lanka. In addition the bank pays for his food and lodging at Jaic Hilton.

CB sources said Sir Desmond is believed to have been working in Sri Lanka for the past few months on this assignment and also visited Jaffna on a few occasions. They said that Sir Desmond has been in the Sri Lanka since last June 2014. “He is staying here till next Geneva meeting on Human Rights (around March/April),” one source said.

Sir Desmond was also appointed to a government advisory committee investigating the last phases of the war that ended in May 2009.

Arjuna appointed as Governor of SL’s Central Bank

Arjuna Mahendran, an accomplished Sri Lankan banker who started his career at the Central Bank (CB), has been appointed as the new Governor and likely to take up his appointment in the next few days. He replaces Ajith Nivard Cabraal who resigned on January 9.

CB sources said he had met a few Deputy Governors during a brief visit to the CB headquarters on Friday. Mahendran who was working in Dubai as his last assignment once held a top job at the HSBC office in Singapore. He is a former Chairman of Sri Lanka’s Board of Investment.

Shamed former IMF boss was on Sri Lanka CB’s payroll, was here on Oct 26-28, 2014

Dominique Strauss-Kahn, the shamed former IMF Managing Director involved in many sex scandals, unknowing to many had been hired as a costly advisor to Sri Lanka’s Central Bank (CB), the Business Times reliably understands.

He was in Sri Lanka between October 26 to 28th 2014, it is learnt. The former high profile banker who was forced to resign in May 2011, had been hired – apparently at some time during the past 6 to 18 months – on a contract believed to be worth US$ 750,000 (Rs.98.4 million) to help make Sri Lanka a financial hub.

Disgruntled depositors of Golden Key at a protest near Temple Trees on Wednesday. Pic by Athula Devapriya

Barring probably former CB Governor Ajith Nivard Cabraal and a few others, not many CB senior employees were aware of this, it is learnt. Dubious deals in many places including the CB are slowly emerging after the recent presidential election in which Maithripala Sirisena beat incumbent President Mahinda Rajapaksa. Frenchman Strauss-Kahn was accused of rape and sexual assault, a charge that was subsequently dropped due to lack of evidence, and participating in several sex parties.

According to a statement to the media by the CB in December 2013, Strauss-Kahn had paid a courtesy call on Governor Cabraal on December 13th “at the Governor’s Office in Colombo where they discussed matters of mutual interest”. The release was issued with a photograph.

Hemaka de Alwis, new chairman at SriLankan Airlines

Hemaka de Alwis, Chairman of Fairway Holdings, a real estate company, is tipped to be the new chairman of national carrier SriLankan Airlines, officials said on Wednesday.

The appointment is to be made by Aviation Minister Faizer Musthapha.

Fisticuffs at special Ceylinco Insurance shareholders meeting

Arguments and fisticuffs broke out at a crucial Ceylinco Insurance meeting of shareholders in Colombo on Tuesday morning, witnesses said.
One shareholder present told the Business Times that at one point a shareholder bit a security guard’s chest which turned bloody when guards intervened to break up opposing factions. More than 200 shareholders were present at the meeting.

The company was holding two meetings, one at the request of a shareholder Global Rubber Industries (Pvt) Ltd (GRI) and related parties, with a sizable stake, and the second one to endorse a proposal for segregation of life and general units as separate entities.

The trouble flared at the first meeting where GRI had wanted an explanation accusing the company of ‘surreptitiously transferring the business and assets without shareholder approval’. The meeting which started at 9 am at the 5th floor of Ceylinco House in Fort is said to have been suspended due to the crisis.

A second meeting called by the company was due at 11 am to seek shareholder approval for the segregation of the two insurance units, as per Insurance Board rules.

Controversial PBJ has lunch with two former colleagues in Colombo restaurant

Controversial former Treasury Secretary P.B. Jayasundera, contrary to reports that he had gone abroad soon after Sri Lanka’s presidential election, is very much ‘alive and kicking’ in Sri Lanka.

On Tuesday, he had lunch with Colombo University economist Lalithasiri Gunaruwan and Dr. S. Jayaweera, former Director-General Sri Lanka Tourism Development Authority at the Hotel School restaurant in the premises of the Sri Lankan Tourism office complex“. It was a meeting of colleagues. There was no politics involved. I invited Dr. Jayasundera, whom I have opposed on policy issues in the past, and Dr. Jayaweera for lunch as former colleagues,” Dr. Gunaruwan told the Business Times, when asked. Reports of this meeting first appeared in some news websites on Tuesday itself. It was however unclear as to whether Dr. Jayasundera has gone abroad and returned or whether he has been in Sri Lanka all the time.

Meanwhile it is reliably learnt that Dr. Gunaruwan is tipped to be appointed as the Transport Ministry Secretary.

SL’s Central Bank headless for more than a week!

Sri Lanka’s Central Bank (CB) has been ‘headless’ for a week but the wait might be over this week, officials said.

On Tuesday, the gazette notification listing departments and institutions coming under the new ministries were issued. Under it, the CB comes under the Prime Minister Ranil Wickremesinghe’s portfolio which included policy and economic planning.Policy Development and Economic Affairs Deputy Minister Harsha de Silva said with the subjects being finalised, the CB will be speeded up with Arjuna Mahendran being appointed as the new Governor.

Among other key institutions coming under this ministry are – Securities and Exchange Commission (SEC), National Insurance Trust Board, EPF and ETF departments via the CB, National Planning and External Resources Departments (which earlier came under the Finance Ministry) and Public Utilities Commission.

Battered-and-bruised NGO community to come under the Prime Minister’s Office

Sri Lanka’s NGO Secretariat which, in recent times, strictly supervised non-governmental organisations under the eagle eye of the Defence Ministry, will henceforth come under Prime Minister Ranil Wickremesinghe, officials said.

According to the gazette notification listing the subjects under the different ministries issued on Tuesday night, the NGO Secretariat has been assigned to the Prime Minister’s office.

The Defence Ministry, under Secretary Gotabaya Rajapaksa’s supervision, controlled the NGO Secretariat restricting the activities of NGOs – at the end of the war in May 2009 – and often accused some groups of activity connected to terrorist organisations. Many NGOs were forced to wind up under these stringent rules which are likely to be relaxed by President Maithripala Sirisena’s new administration.

Sri Lanka sharply reduces fuel prices

The new Sri Lankan Government on Wednesday reduced the prices of all types of fuel , a promise it made during the presidential election last month.

Accordingly 92 Octane petrol has been priced at Rs. 117 per litre, down Rs. 33; 95 Octane petrol at Rs. 128 per litre, down Rs. 30; Diesel Rs. 95 per litre, down by Rs. 16; Super Diesel Rs. 110 per litre, down by Rs. 23 and Kerosene Rs. 65 per litre, down by Rs.16.

The price revisions would be effective at midnight on Wednesday.

P. G. Kumarasinghe appointed as SLT/Mobitel chairman
P. G. Kumarasinghe, brother of President Maithripala Sirisena, on Thursday assumed duties as the new Chairman of Sri Lanka Telecom (SLT) Group including Mobitel.

This event took place at the SLT headquarters in the presence of board of directors and other officials.

Mr. Kumarasinghe was once President Sirisena’s Coordinating Secretary when the latter was the Leader of the House in March 2005.

Prior to this appointment, Mr. Kumarasingha was the CEO/General Manager of the State Timber Corporation.

He has a Master of Business Administration from Wayamba University of Sri Lanka, Master of Public Management from Sri Lanka Institute of Development Administration and a post Graduate Diploma in Accountancy and Financial Management from University of Sri Jayawardanapura among other qualifications.

Speedy developments in Sri Lanka

With the election of Maithripala Sirisena as the president and the appointment of a new Government, there have been fast-evolving developments in Sri Lanka this week.

On this page is a summary of major new developments during the week that were filed by the Business Times to the Sunday Times online edition – Business Editor’s note: Some of these stories may appear elsewhere in this section with updated information.

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