Controversial security firm Rakna Lanka to be liquidated

Thursday, 8 December 2016 00:14 - - {{hitsCtrl.values.hits}}

By Chathuri Dissanayake

The Government has decided to liquidate the controversial Government-owned security company Rakna Arakshaka Lanka Limited (RALL) as there is no requirement to maintain a separate security company in post-war Sri Lanka.

The Cabinet paper was presented to the Cabinet of Ministers by President Maithripala Sirisena as the Defence Minister pointed out that since there was no conflict situation in the country, members from the tri-forces can be given the responsibilities carried out by RALL.

The Cabinet paper sought approval to liquidate the company, pending the Attorney General’s advice on how to proceed regarding three law suits RALL is involved in. Accordingly, the AG is to advice on the best course of action on dealing with obtaining an outstanding payment of Rs. 1776 million from Avent Garde, payments due to the Sri Lanka Navy from Avant Garde and the litigation filed by Avant Garde against RALL in the Singapore Arbitration Courts.

According to the Cabinet Paper, responsibilities of RALL include Rs. 160 million rupees paid by Avant Garde under a project involving fishing trawlers, while the company owes another Rs. 2.5 million to SL Navy SEAFEP unit at Welisara for storing weapons. Net assets of the company as at 31 August 2016 are Rs. 3264 million. In 2006, the troops who were guarding State institutions and economic centres were withdrawn from the posts to be deployed in the conflict zones when fighting escalated. RALL was formed to provide security to said entities. Established under the Company Act No. 17 of 1982, the company is fully owned by the treasury and was set up by the previous regime through a Cabinet memorandum in 2006.

The Cabinet paper submitted also highlighted that the company has given rise to a number of complicated legal issues by engaging in activities outside of the outlined purview. “The move by the company to supply armed security personnel to vessels, an economic activity outside of the company’s Articles of Association has given rise to legal issues,” the Cabinet paper highlighted, adding that certain agreements the company has entered into with private parties also have legal complications.