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Early hours on Thursday (8.1.97) more than 2000 LTTE cadres stormed the military defences at Paranthan. While the main attack came from eastern flank, another unit attacked on the west. They used human-wave tactics and suicide bombers during the attack. Soon after they penetrated town's defences and bombarded its military positions with artillery and mortars. A number of artillary pieces and an amunition dump were destroyed at the time. Then they turned northwards and engaged the southern flank of the Elephant Pass Base. Tigers had temporarily succeeded in creating a gap in the defences that extended from Elephant Pass to Kilinochchi. The counter attach on the LTTE infiltrated positions were launched northwards from the Kilinochchi and southwards from the Elephant Pass defence positions. The offensive was supported by SLAF gunships. The counter attack columns linked up at Paranthan around 3.30 pm on Thursday. Around 400 were killed and more than 500 wounded on both sides during the attack.
Pilot's disorientation caused the Sri Lanka Air Force Bell 212 helicopter with Deputy Defence Minister, General Anuruddha Ratwatte and top ranking security officials to force-land in enemy territory a Court of Inquiry has ruled.
The three member Court appointed by the Commander of the Air Force, Air Marshal Oliver Ranasinghe, has recommended that disciplinary action be taken against the pilot.
Acting on this, the Air Force Chief has already relieved Squadron Leader Sagara Kotakadeniya of pilot duties.
The three member Court of Inquiry was headed by Air Commodore J. L. C. Salgado, SLAF base Commander Katunayake and comprised Wing Commander Gagan Bulathsinhala and Wing Commander Ranjith Yapa.
The Court of Inquiry report has pointed out that for 28 minutes Pilot Kotakadeniya maintained total silence and had failed to carry out laid down procedures that should be followed at times when they are lost. Pilot Kotakadeniya had contended that the instruments were faulty and that was the main reason for the incident. However, in his statement to the Court of Inquiry, Army Commander, Lt. Gen. Rohan Daluwatte had testified that he had reason to believe that the instruments were in working order.
Even on the assumption that the instruments were not working, the Court had felt that the pilot would have been able to ascertain his location if he followed procedures including one in which he could have ascertained his location by activating communications with a nearby Air Control Tower.
The Sunday Times reliably learns that Air Force Commander, Air Marshal Oliver Ranasinghe, has forwarded a report to the Ministry of Defence with his own observations on the findings of the Court of Inquiry.
The Court of Inquiry has also made some observations on the role played by the Army's Chief of Staff, Air Vice Marshal Anslem Peiris, who had represented the Commander. He flew in the second helicopter (Bell 412) with a group of senior security officials.
On December 7, General Ratwatte, Army Commander, Lt. Gen. Rohan Daluwatte, Inspector General of Police, W. B. Rajaguru, Overall Operations Commander, Major General Asoka Jayawardena were among those on board a Bell 212 helicopter that went missing. They made a forced landing in LTTE held territory some ten miles outside the Vavuniya defences.
A second helicopter in which Air Vice Marshal Anslem Peiris and other senior security officials travelled arrived in Weli Oya where a conference was scheduled to be held.
Troops continued to consolidate their positions around the Paranthan area yesterday after the LTTE attack in which over 200 soldiers and more than 350 rebels are believed killed and several more soldiers listed as "Missing in Action."
Sporadic incidents were reported on Friday night as troops continued their mopping up operations around the area and re-establishing their forward defence which were infiltrated by waves of Tigers in the biggest attack in five months.
The Defence Ministry last night confirmed the deaths of 161 soldiers. The number of Tigers injured in the incident was placed at over 700.
The LTTE over its clandestine radio "Voice of the Tigers" announced that their main objective of the attack was to nullify Army's fire power in the region, by capturing or destroying armaments. They also claimed to have destroyed 11 long range artillery pieces and captured vast quantities of arms and ammunition.
However military sources rebuffed the claim and admitted that some of the artillery were immobilized preventing the LTTE seizing them.
Meanwhile the LTTE has said that they had made arrangements to hand over the bodies of 29 soldiers, which they had recovered to the International Committee for the Red Cross (ICRC).
Please see Situation Report
The number of soldiers killed in the Paranthan attack, according to Defence Ministry sources, has risen to 161.
They said 350 LTTE cadres have been confirmed killed so far with the number of wounded standing at 700.
The LTTE has admitted that at least 78 women cadres were killed in the attack, according to LTTE's clandestine radio, Voice of the Tigers. The LTTE admitted 140 of its cadres died in the attack.
AirLanka's Air Bus A340 to South Africa started last May with fanfare and much optimism has been a major flop, according to AirLanka sources. The loss is around Rs. 108 million.
The whole South African safari has been a flop. Director Nihal Jayamanne, who went to South Africa last August see for himself what was ailing the airline over there told "The Sunday Times": "I recommend that the two flights to South Africa on Tuesdays and Fridays be cut down to one, which has been done.
"I have also suggested that instead of Air Bus 40 the Tri Star be used which goes to India. Unlike the AB 40, this will help in getting more passengers."
In the meantime AirLanka Chairman W.T. Jayasinghe continues as Chairman. He refused to say whether he had handed in his resignation or not, and kept silent on the rumours that the President had not accepted his resignation.
An AirLanka Tristar flight made an emergency landing in a Gulf airport during the early hours of yesterday due to technical problems.
This resulted in a delay of more than 24 hours for some 200 passengers who were flying to Colombo, a passenger said.
According to the passenger who had telephoned a foreign correspondent in Colombo the flight UL 202 which took off from Bahrain was due to fly to Colombo via Doha. However it was forced to make an emergency landing in Doha after a fire broke out in an engine.
The passengers were at the air port for several hours and no proper arrangements had been made to accommodate them, the passenger alleged.
An AirLanka spokesman told "The Sunday Times" that the emergency landing was made after a bird was caught in the propeller. The spokesman said that the passengers were transferred to two five star hotels in Doha and another AirLanka plane had been sent from Colombo to pick up the stranded passengers.
Sri Lanka Army's Provost Marshal, a senior Brigadier, responsible among other important duties for the maintenance of discipline, has been placed under open arrest after he allegedly obtained finished timber goods from an Army Unit for use in a private house he was building.
The detection was made by the Military Police on the orders of the Army Commander, Lt. Gen. Rohan Daluwatte.
This followed a tip off the Army Chief received that an Army truck loaded with wooden door frames, window frames and paint was on its way from Colombo to Kandy. A team of Military Police personnel laid in ambush at Kadugannawa, intercepted the truck and seized the goods. They also took into custody the driver and the goods. They were reportedly proceeding to Kandy where the Brigadier is said to be building a private residence.
Preliminary investigations have revealed that the senior Brigadier allegedly had the door/window frames manufactured at the workshops of the Fourth Regiment-Development and Construction Engineers at Kirullapone. Documents relating to this job are reportedly missing.
Lt. Gen. Daluwatte has appointed a two member Court of Inquiry headed by Brigadier Palitha Fernando, Regimental Centre Commandant and Col. Asoka Perera of the Directorate of Engineering Services. They have already recorded the statement of the Brigadier concerned.
The Army Commander has meanwhile cancelled an overseas trip that was to be undertaken by the Brigadier in question. He has appointed Brigadier Palitha Fernando to act as Provost Marshal. Meanwhile Lt. Gen. Daluwatte, has ordered an inquiry into an incident where a group of Army men led by a Captain had been allegedly detected transporting illicitly felled timber.
On December 7, the Hingurakgoda Police arrested a Captain and eleven soldiers whilst unloading a lorry load of teak logs at a saw mill in Medirigiriya.
The Judges Association has taken up with Justice Minister G.L.Peiris the issue about the delay in promotions of their members, official sources said.
The matter of the appointment of judges came up when the Judges Association met the Minister at the Treasury last Monday, but the Justice Minister said "We will discuss appointment of judges with the other follow up programmes next time."
The next meeting is due to be held on February 10.
Among other items discussed was the B.C.Perera Commission report on the salary scales of the Public Servants. "The Sunday Times" learns that according to the B.C.Perera commission report there is an area where a senior magistrate or a district judge will receive an amount more than the sum he receives at present. The Justice Minister has agreed to consider the request made by the Association regarding this issue.
According to sources Minister Peiris has requested the judges to work with the concurrence diversity in reviewing the recommendation of four committees appointed by him.
Scholarships to assist Judges to expand their knowledge was also taken up for which the Minister agreed to have discussions with the Foreign Missions in Sri Lanka in order to get scholarships on this matter.
The possibility of a bank loan scheme at a very low interest for the Judges was also considered. This was mainly aimed at purchasing land by the Judges at Baddegana housing scheme reserved for judicial officers. Minister Peiris also agreed to make available three additional vehicles to the minor judiciary.
Chairman of the People's Bank Dr.Gamini Fernando, Chief Financial Officer BOC, U.Chandrasiri, Acting Secretary to the Ministry of Justice M.S.Jayasinghe, Director General of State Accounts P.Balasubramanium, Deputy Secretary to the Treasury Dr. P.B. Jayasundara and officials of the judges were also present.
The Central Bank has reduced commercial banks' statutory reserve ratios from 15% to 14%, a top bank official told The Sunday Times.
The decision to reduce reserve ratios by one percentage point was taken at a joint meeting of top commercial bank officials with the Central Bank on Friday and will be effective from tomorrow.
A circular will be released to all commercial banks tomorrow, the official confirmed.
This reduction in reserve ratios is expected to bring about a decline in commercial banks' lending rates, which are now around 18%-24%, and among the highest in the region.
Central Bank statutory reserve ratio for commercial banks is also among the highest in the region, even after the reduction. Most other countries maintain a reserve ratio of less than 10%.
At Friday's meeting commercial bank officials agreed to reduce lending rates by one percent, the official said.
It is the first time in two years that statutory reserve ratios on all local and foreign currency deposits have been redused. Under the Monetary Law Act, commercial banks are required to maintain reserves with the Central Bank which determined the ratio.
The 5% reserve ratio on commercial Banks' foreign currency deposits abroad will be waived off completely, the official said.
The revision in reserve requirements will release an additional Rs. 8-10 million to the local money market.
While additional money flowing into the market would have caused worries of fuelling inflation two years ago, when the CB adopted a tight monetary policy, it is now a "signal to the market to relax credit," the official said.
With the Treasury bill rates and the rate of inflation coming down the CB has decided to relax its control on the money market, he added. Price increases are expected to stabilise by mid 1997, the official said. With the budget deficit down to 7% of GDP and a good harvest predicted, lowering interest rates is not going to be inflationary, he explained.
In keeping with a more relaxed monetary policy and responding to the November 1996 budget proposals, to permit all exporters to borrow at offshore rates, the CB has issued new guidelines for foreign currency borrowing. Thus far only BOI approved exporters were permitted to borrow at offshore rates, which are much lower than prevailing rates here.
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