The Sunday TimesNews/Comment

17th March 1996



Cement mix-up: the plot thickens

Foreign Minister Lakshman Kadirgamar, in the eye of a political storm over the privatisation of Puttalam Cement returned this week from an official visit to Egypt.

The Sunday Times obtained a second exclusive interview with the Foreign Minister as the government tried to shake off a UNP led offensive to bring a vote of No Confidence against it in Parliament next week.

Q: Mr. Minister, the Puttalam Cement saga is not over. Subsequent to your earlier interview with The Sunday Times you made a statement in Parliament. The general impression seems to be that now you are going back on the earlier allegations that a senior politician, possibly a Cabinet Minister took a bribe to have a Cabinet decision revoked.

A: It is perfectly clear if you look at my letter of January 19 to the President that I have merely summarised two conversations, one recorded and one unrecorded, that were brought to my notice by Mr. Kadurugamuwa, a partner of M/s FJ & G de Saram, Attorneys at Law, between two parties to some litigation in the District Court of Colombo one party being his client, the representative of a group of Hongkong investors in Puttalam Cement, and the other party being a Director of the Tawakkal Group which controlled Puttalam Cement. According to the conversation Mr. Tawakkal alleged that his group had paid a lot of money to have a Cabinet decision revoked and that he is friendly with several Ministers and high government officials and that he can get anything done by the government of Sri Lanka. In the earlier conversation that Mr. Kadurugamuwa's client had with a Tawakkal Director which is not recorded, the Tawakkal Director had told his client that the Tawakkals spent Rs 30 million to get the Cabinet decision revoked by paying Rs 20m to a minister and Rs 10m to an official. I do not know either of the parties to this alleged conversation. I cannot even tell whether such a conversation took place. I cannot therefore personally vouch for the authenticity of the conversation or for the accuracy of its substance. I merely passed on to the President without any comment whatsoever the fact that I had been notified about such a conversation by Mr. Kadurugamuwa. The recorded conversation was part of the record in the pending case. It is perfectly clear that I have made no allegations against anybody. This is what I said in Parliament.

Q: In your statement to parliament you say that there are "dubious features" in the tape that refer to bribing ministers. You say they are "bombastic claims" to wield high influence in high places. These claims don't impress you, you say. But weren't you impressed in the first place at least to bring it to the notice of the President. You said you were "deeply troubled".

A: What I was deeply troubled about was my belief at the time I wrote the letter of January 19 that there was no subsequent Cabinet decision which reversed the first Cabinet decision of March 23, 1995. The Cabinet Secretary told me that there was no second Cabinet decision. In those circumstances I wondered whether the PERC letter of August 1, 1995 referring to a Cabinet decision was a forgery, that it was something fabricated by interested parties. In my January 19 letter to the President I asked only three questions whether there was a second Cabinet decision, whether the PERC chairman's letter was genuine and whether the SEC letter was genuine. In this letter the main issue was not the tape. On the assumption that there was no second Cabinet decision the alleged conversation in Hongkong might, if true, have indicated that the August 1st letter was possibly concocted. But the moment it became clear to me after persuing the relevant documents passed on to me by the President as coming from the Chairman of PERC and the Secretary General of the Securities & Exchange Commission (SEC) that there was a second Cabinet decision of June 21, 1995 which varies the terms of the March 23 decision, there was no longer any question of suspecting the genuineness of the PERC letter of 1st August. Consequently the alleged conversation in Hongkong assumed much less significance to my mind.

I did not, as I said earlier, express any view about the authenticity of the conversation in my letter of January 19 to the President. But when it was brought to my notice that the UNP's official organ "Siyarata" had a picture showing me pointing to my Cabinet colleagues under the caption "who is the rogue". I felt this was grossly unfair because I had never at any time made any allegation against my Cabinet colleagues about bribery.

Q: Therefore?

A: I decided that in Parliament I must set the record straight as far as I was concerned and I felt that I must give my own opinion as to the authenticity of the alleged telephone conversation. I said that the alleged conversation has dubious features. One party (the Tawakkal Director) was making what appeared to be a bombastic claim to wield high influence in high places and these claims did not impress me. In particular I said in Parliament that "it is preposterous to suggest that I subscribed to the view that it is possible for one minister and one official to persuade the entire Cabinet to reach a pre arranged conclusion that it would not have otherwise reached".

Q: Were you pressurised by your colleagues to make this statement in Parliament because they were collectively embarrassed by your letters to the President.

A: "Pressurised" is quite the wrong word in this context. My colleagues naturally felt that they had been unfairly treated by the UNP organ "Siyarata". I felt that my name had been used by that paper to point a finger at my colleagues when I had certainly not done so. Therefore I felt that it was only right and fair that I should make it clear in my parliamentary statement that I had never made any such allegation against my colleagues.

Q: Can the tapes have referred to a high official not necessarily the Cabinet of Ministers?

A: One must read the transcript of the tape to see to whom it refers.

Q: Has the government taken any action on your complaint. There has been dragging of feet on your first complaint.

A: The matter has been handed over to the CID for investigation and I understand that an inquiry is going on. There has been no dragging of feet at all. The President had my letter on her hands on January 19 the date on which the letter was written. I understand that she gave it to an official for comment that very night. It was not returned to her for some weeks. Thereafter two other officials had been asked to comment and they gave their comments on February 16. The President returned all their comments to me for my information on l9th February and I wrote my second letter to her dated 22nd February wherein I stated that I have now realised that there was indeed a second Cabinet decision. I also said in that letter that had I known when I wrote my first letter of l9th January that there was a second Cabinet decision, I would not have written the second letter because the three questions I posed in my first letter would have been resolved.

Q: Would you have then still taken up the matter of the bribe referred to in the transcript?

A: I would have mentioned it to the President for her to decide what to do about it but I must say that my main concern was the authenticity of the August 1 letter from the Chairman of PERC and the reversal of the Cabinet decision. These questions were resolved in my mind when I came to know that a second Cabinet decision exists.

Q: But you would have still brought the bribery issue to the notice of the President?

A: Yes, I would have because it is a matter that merit

investigation to determine the truth or falsity of it.

Q: So do you mean allegation of bribery at the highest levels - can still be brought to the attention of the President?

A: Yes, of course. Certainly there is machinery for

investigating such allegations. I do not think that the President would for one moment wish to sweep aside such investigation. The investigators must decide on the value of such allegations. It must always be remembered that public figures are particularly vulnerable to false allegations.

Q: Was it wrong for a lawyer to bring to the attention of a Minister a matter of public importance even of a pending case?

A: It is certainly not wrong especially where, as in this case, Mr. Kadurugamuwa brought something to my notice on the express instructions of his client. He was not divulging the secrets of his client. That would be wrong. Where the public interest is concerned bringing some information to the notice of a Minister is perfectly justified conduct in my opinion.

Q: Your Ministry's Director/Publicity has complained that some interested parties are trying to get you involved with Holderbank - a leading international cement supplier who was interested in the Puttalam Cement deal.

A: Mr. Ariyasinghe (the Director) discovered a few days ago that his name has been used by some person bent on creating mischief by giving the telephone number of a Chinese restaurant stating that it was the Foreign Affairs Ministry number to get a fax copy of a letter which the senior Vice President of Holderbank had apparently written to me on April 14, 1995. This letter was printed in the "Leader" of March 10, 1996 on page 8 but significantly the fact that a copy of the letter was sent to the President is suppressed in the Leader publication. Ministers get hundreds of letters every week. This one must have ended up in my waste paper basket but in any event I certainly did not reply. I instructed the Director/Publicity of the Ministry of Foreign Affairs to inform the senior Vice President of Holderbank that I did not even reply his letter because I have no interest whatsoever in the parties wishing to invest in this company (Puttalam Cement). "Such matters have nothing to do with the Ministry of Foreign Affairs and are of no concern whatsoever to the Hon. Minister". This episode is a cheap trick. Nothing came of it.

Q: And so the plot thickens.

A: Yes, it's being thickened by interested parties and will be soon unravelled.

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