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Thursday, 31 December 2015 00:28 - - {{hitsCtrl.values.hits}}
Finance Minister Ravi Karunanayake is under fire for making a case in Cabinet for Nihal Sri Ameresekere over latter’s claim of Rs. 300 million as compensation for supposedly savings Rs. 87 billion for the State over the years with regard to long-drawn dispute concerning Hilton Colombo.
Criticism against the Finance Minister is on account of him seeking Cabinet approval for compensation when a JVP Western Provincial Council member has lodged a complaint to the Bribery Commission and Financial Crimes Investigation Department (exclusively reported by Daily FT on 14 December) against Bank of Ceylon granting a Rs. 100 million overdraft facility to Ameresekere in the last month of the previous regime. The finance minster’s Memorandum when discussed at recent Cabinet meeting sparked heated debate.
“Karunanayake’s action is tantamount to seeking Cabinet approval to regularise part release of funds by BOC, doubts over which have already been raised with Bribery and financial crime authorities,” sources opined.
“A decision is pending whether to investigate the complaint of the JVP politician with supporting documents which showed reservations expressed by Hilton Colombo’s owning company Hotel Developers Plc’s competent authority as well as qualified opinion by Merchant Bank of Sri Lanka in 2006. Despite that Karunanayake, seeking Cabinet approval for the settlement, exposes the Finance Ministry and the Government,” sources alleged.
Apart from the Rs. 100 million overdraft facility released by the BOC with Treasury backing in December 2014, as per Karunanayake’s cabinet memo, the BOC has further released Rs. 125 million to Ameresekere in June 2015.
This brings the payment to date to Rs. 225 million. The finance minister’s memo sought Cabinet approval to proceed with the full and final settlement of Rs. 300 million plus the interest i.e. Rs. 75 million more plus interest.
Other sources however pointed out that Karunanayake was only formalising a matter that had been previously approved by the Finance Ministry as per an agreement that a previous regime and the Attorney General had entered into with Amersekere in June 1995.
As exposed in the 14 December Daily FT article titled “Hunter gets hunted,” independent analysts have pointed out that whilst Ameresekere’s efforts may have saved the State billions of rupees, the larger impression created had been his litigation on Hilton issue had been in the public interest. The motive or intention of seeking compensation or the agreement for compensation had not been made public either previously. As per the MBSL’s report, the then regime had not enlisted Ameresekere nor encouraged him to go for litigation or promised compensation. Therefore any financial benefit recommended is solely in recognition of his endeavours and efforts in respect of such actions and assistance which had benefitted the Govt/HDL. Further the actions and efforts of Ameresekere had not only benefitted the government and HDL but also Ameresekere himself as a shareholder of Hotel Developers.
As per the 1995 agreement between the Finance Ministry and Ameresekere, the latter had asked for three Board seats on Hotel Developers but had eventually settled for one.
In his memo to the Cabinet, Finance Minister Ravi Karunanayake has said :Having deliberated the merits of Ameresekere’s total claim it appears that reaching a finalisation on this long drawn matter on the basis of a full and final settlement would be beneficial since HDLL could then proceed with its activities as a business enterprise, free from this long drawn compensation payment committed by Lalith Weeratunga, Secretary to the President Mahinda Rajapaksa. The value of the write-off and rescheduling of the balance by Ameresekere amounts to Rs. 86,750 Mn.”
