Unfair attempts to acquire SLIIT by some politicians

SLIIT originated with the foresight of one individual, without Government support, had to face disturbances by subsequent politicians, but managed to reach high, with the support of likeminded directors

The demand of the Communist Party MP at the SLPP meeting in the presence of President that Minister Bandula Gunawardena should take the lead in regaining the SLIIT divested through fraudulent means. His demand was supported by COPE Chairman Prof. Charitha Herath. It is clear the MP and the Chairman of COPE have no clear understanding of the creation of SLIIT and the changeover to a non-profit organisation on guarantee basis was accepted by the Cabinet and not by fraudulent means, as claimed

At a recent meeting chaired by President Gotabaya Rajapaksa, in the presence of Premier Mahinda Rajapaksa, Minister Bandula Gunawardane assured the SLPP Parliamentary group that action would be taken to take over the Sri Lanka Institute of Information Technology (SLIIT) divested through fraudulent means. At the meeting Committee on Public Enterprises (COPE) Chairman Prof. Charitha Herath, who wished taking over of SLIIT, was present at the meeting.

The Trade Minister’s remarks were in response to Communist Party MP Weerakumara Weerasinghe who demanded the Minister should lead in regaining Sri Lanka Institute of Information Technology (SLIIT), divested through fraudulent means. 

Unfortunately, the Minister’s boasted action may not succeed due to legal reasons.

Mahapola Higher Education Scholarship Trust Fund

The Mahapola Trust Fund was initiated by Lalith Athulathmudali in 1981, with the objective of financially assisting students undertaking higher education. The fund is controlled by a Board of Trustees chaired by the Chief Justice. The original funds were raised through a series of Mahapola fairs. The fund founded the Development Lotteries Board.

Auditor General’s Statement

The Auditor General’s Statement on SLIIT and Mahapola Higher Education Scholarship Trust Fund – 2017, available at http://www.auditorgeneral.gov.lk/web/images/audit-reports/upload/2017/Funds/3_VIII/Mahapola-Higher-Education, states under

4.3 Transactions in Contentious Nature

d. According to the Cabinet decision No. CP/17/0956/701/011 dated 04 May 2017, an approval had been given to recognise the State-owned assets of SLIIT as an independent decision-making entity, which does not belong to the Government and to remove the name of this institute from gazette notification, relating to assign duties of the ministers as it does not purview under any ministry.

COPE Chairman’s statement

According to newspaper reports COPE Chairman Prof. Charitha Herath made a statement in Parliament on 22 October based on COPE reports submitted to the House on 10 March and 6 April 2021.

According to the report on 6 April, the Government approved the establishment of the SLIIT through the Cabinet Memorandum (98/995/11/052) presented on 1 April 1998 under the Mahapola Higher Education Scholarships Trust Fund (MTF). It furthered that MTF agreed to offer Rs. 500 million and 25 acre land situated in Malambe as initial capital of the SLIIT.

Professor Herath pointed out, “This establishment was expected to stay a limited liability company which would not be profit oriented until it is solidified via an Act. It was expected to become a leading Government educational institution in the IT field. The expectation was to make SLIIT a part of the Moratuwa University. In 2015, Dr. Wickrema Weerasooria, a Director of Mahapola Board, made a move which paved the way to removing the involvement of the State in SLIIT campus. The representatives of the UGC, BOI and Moratuwa University who were in SLIIT Board of Directors were removed. This is an act of stealing Government resources in broad daylight.”

Professor Herath further said, “Then a Cabinet Paper was approved in 2017, totally removing the Government’s involvement in the SLIIT campus. A Special Gazette Notification was also issued in this regard. It is evident that a very systematic operation was carried out to remove the SLIIT campus from the purview of the Government. SLIIT belongs to the State. The COPE committee proposes to recall the Cabinet Paper and the Gazette notification aforementioned.”

SLIIT’s newspaper statement

SLIIT in a two page advertisement in number of newspapers presented ‘The true story of SLIIT’. According to the ad, the history is as follows. Quote:

In 1998, Professor Lalith Gamage, a Senior Lecturer and Director, Computing Services Centre at University of Moratuwa (UoM) foreseeing the enormous potential for Sri Lanka meeting the demand for IT skills, proposed the establishment of Institute of Information Technology to the Minister Kingsley T. Wickramaratne.

In June 1998, the Cabinet accepted the proposal in principle, however, the Finance Ministry raised concerns of availability of qualified teachers, also the burden on treasury. The Cabinet agreed the Mahapola Trust Fund (MTF) to fund capital expenditure and allocate the land from Malabe.

At a meeting in January 1999, with the Minister, Ministry officials and academics, it was agreed to form a company limited by guarantee. In March 1999, SLIIT was registered as a non-profit company limited by guarantee under the Companies Act. But neither the Government nor MTF had any ownership in the Company.

Prof. Sam Karunaratne was appointed Chairman and Prof. Gamage as Managing Director and CEO. The company commenced operations immediately with a grant from BOI. In September 1999, SLIIT commenced teaching with a two-year Diploma Programme, at the rented space in BOC Merchant Tower, Colombo 3. Of the 3,150 applicants received 400 were accepted and with their fees, SLIIT became financially sustainable. Due to student agitations in UoM, Prof. Gamage resigned cutting all ties with Moratuwa University.

In September 2000, MTF agreed to release a 25-acre land in Malambe, also to provide Rs. 500 million and construction began in 2001. Meanwhile, 600 new students were enrolled in Colombo Metro Campus (in Colpetty).

In 2001, with the change of Government, MTF suddenly stopped funding, by then Rs. 373 million had been released. The buildings were completed with a loan from DFCC. (End of extracts from SLIIT advertisement.)

Prof. Gamage’s press statement

According to SLIIT President/CEO Prof. Lalith Gamage, none of the State-owned or private companies supported him to establish the institution, which is now functioning well under a not-for-profit, guarantee company.

“In 2000, we came to an agreement with MTF, and they leased the land to SLIIT on a 60-year lease. According to agreement, SLIIT had to pay either Rs. 8 million, or 20% of its profits to Mahapola. Also, SLIIT to have four members from MTF on its board, including the Secretary and the Chief Accountant.

“Even though the initial agreement was to appoint a secretary and a chief accountant, several ministers did not understand the concept, and they appointed non-qualified people. Political interference and changes only delayed the institution’s development.”

In 2015, SLIIT’s management opposed the appointment of members without minimum standards of the institution, resulting in Minister of Trade Gamini Jayawickreme Perera deciding to end the agreement by asking SLIIT to pay the amount advanced by the fund.

“We paid the agreed amount of Rs. 408 million to Mahapola and took the total administration under the guarantee company. SLIIT had to renew its agreement with the fund, and a lease agreement on property, now paying Rs. 20 million a year.” 

Agreement between SLIIT and MTF

Two agreements were entered on 12 May 2015 between Mahapola Higher Education Trust Fund and Sri Lanka Information Technology (Guarantee) Company on behalf of the land.

(i) A sum of Rs. 408,500,000 will be given to Trust Fund for cover a sum of Rs. 373,579,392 as value of investments made by the Trust Fund, the value of scholarships given in the name of Mahapola and other incidental expenses. After that there will be no financial interest in between Mahapola Fund and the SLIIT. The SLIIT will be acting as independent organisation from Mahapola Fund.

(ii) Lease out the land of the Sri Lanka Institute of Information Technology (SLIIT) situated in Malabe for 60 years period since 15 May 2015 to 14 May 2075. Accordingly it will bind to be paid lease as Rs. 20 million annually for five years ended on 14 May 2020 and Rs. 40 million annually since 15 March 2070 to 14 March 2075.

Daily FT 13 January 2021

Under the heading ‘COPE directs CID probe into corruption in Mahapola Higher Education Scholarship Trust Fund,’ the article continued: “The Mahapola Higher Education Scholarship Trust Fund had not received Rs. 673 million from the sale of an online lottery of the fund, sold through an intermediary, COPE heard yesterday.”

In addition, due to insufficient capital gains on securities transactions of companies under the Mahapola Trust Fund in 2015 and 2016, Rs. 18 million and Rs. 102 million losses have been incurred.

A loss of Rs. 13 million had incurred in National Wealth Corporation in 2017. COPE Chairman Charitha Herath directed the Ministry of Trade Secretary to inform the Attorney General and CID for a formal inquiry as this was a large-scale corruption.

After a proper study on National Wealth Corporation and the National Wealth Securities Corporation, the institutions should be summoned before the COPE and the liquidation should be delayed until these irregularities are properly monitored.

The committee expressed its displeasure that even though the SLIIT had been summoned before the Committee, it had informed the COPE through Julius & Creasy law firm that it had not been legally obligated to do so. Thus, the COPE decided to summon Julius & Creasy officials first to resolve the matter.

The COPE committee further recommended that as SLIIT is an institution of national importance, after preparing an internal report and reporting it to Parliament, it would be appropriate to decide on the action to be taken in this regard.

Further, the institution does not have an internal auditor and an accountant. The COPE committee recommended that action be taken to fill this vacancy as soon as possible.

SLIIT today

Presently, SLIIT operates two campuses – the Colombo Metropolitan Campus at Kollupitiya, and the Malabe Campus. In addition it has regional centres in Matara, Kandy, Jaffna and Kurunegala with an undergraduate student population of over 7,000. Further 1,000 students follow master's degree programmes, postgraduate diploma and other professional development programmes.

SLIIT is a member of the Association of Commonwealth Universities and International Association of Universities and has several partnerships with international universities. The institute offers courses in collaboration with British and Australian universities with the option of moving over overseas, if needed.

The institute offers multiple courses in the fields of computer science, engineering and business, with faculties in computing, engineering, business, humanities & sciences and architecture and in addition post-graduates courses in Master of Science MSc, Master of MPhil and Doctor of Philosophy Phd.

NSBM Green University

Whilst presenting the Budget proposals for 2012, President Mahinda Rajapaksa informed that a ‘Green University’ would be established within a 26-acre land at Pitipana, Homagama.

The contractor MAGA was awarded the construction of South Asia’s first-ever ‘Green University Town’ with an estimated cost of Rs. 8.615 billion, with a loan of Rs. 8.1 million from Bank of Ceylon. The facility is expected to house 30,000 local and international undergraduates.

NSBM is registered as a 100% Government-owned, Private Limited Liability Company under the Companies Act, specialising in computer sciences, business, engineering and technology. The University was opened in 2016 and recognised as a degree-awarding institute in January 2016.

According to website of the university, course fees are around Rs. 1.6 million. Recently, the foundation stone was laid for the NSBM Phase II, for construction of a 12-storey building, a fully-equipped stadium, hostel facilities and an all-purpose auditorium.

Sri Lanka Technological Campus, Meepe

SLT Campus or SLTC is a private university founded in 2015 and owned by Sri Lanka Telecom, conducting engineering degree programs in electronics, telecommunications and computing. SLTC comes under the preview of the Ministry of Telecommunications. Its degree programmes are accredited by the Ministry of Higher Education and recognised by the University Grants Commission. Its main campus is located at the 36-acre former Satellite Station premises in Padukka.

In addition, there are over 20 private universities accepted by the University Grants Commission, but most of them offer one or two years locally and the students are directed overseas, who fail to return to the country.

Bandula Gunawardena proposes private universities

Minister of Higher Education, Technology and Innovation Dr. Bandula Gunawardena presented three separate Cabinet Memoranda, dated 24 December 2019 reference nos. HETI/HE/UD/2019/28, 29 and 30 proposing setting up of ‘Chartered Universities’.

The Cabinet Memorandum no. 28 proposes the introduction of ‘Chartered University’ concept with private-led ‘not for profit’ and any extra revenues earned be invested for educational development.

The Minister’s proposal included NSBM at Homagama, Sri Lanka Technology Campus at Meepe, University of Vocational Technology and two Buddhist institutions.

Summing up

The demand of the Communist Party MP at the SLPP meeting in the presence of President that Minister Bandula Gunawardena should take the lead in regaining the SLIIT divested through fraudulent means. His demand was supported by COPE Chairman Prof. Charitha Herath.

It is clear the MP and the Chairman of COPE have no clear understanding of the creation of SLIIT and the changeover to a non-profit organisation on guarantee basis was accepted by the Cabinet and not by fraudulent means, as claimed.

The MP’s demand is in line with other left parties as they expect university students to be unionised, make demands and go on strikes, which does not happen in SLIIT. The MP as well as Chairman, COPE failed to highlight corrupt revelations of SLIIT, if any, at the COPE meeting.

The FT article mentioned 1. The MTF had not received Rs. 673 million from the sale of online lottery. 2. MTF did not receive capital gains on securities transactions during 2015 and 2016 and lost Rs. 18 million and Rs. 102 million. 3. National Wealth Corporation lost Rs. 13 million in 2017. The only mention of SLIIT was its non-appearance when summoned before the Committee, claiming not legally obligated. The COPE decided to summon Julius & Creasy officials to resolve the matter, but were they called?

When Minister Bandula Gunawardena assured to take over SLIIT, he seem to have forgotten his Cabinet Memorandum in December 2019, proposing setting up of Chartered Universities.

When so many misdeeds happened under Mahapola Trust Fund, an organisation headed by the Chief Justice, it shows the CJ’s poor attention on affairs of MTF. Clearly, the Chief Justice is busy with other matters. Thus the MTF’s organisation structure needs changes. None of these were discussed at the party meeting.

MR’s proposal to establish the NSBM Green University with an investment of over Rs. 8 billion (obtained as a loan from BOC) was clearly following the success of SLIIT and indicated the demand for higher education and parents’ willingness to pay for quality education. Currently over 40,000 opportunities are available in NSBM, SLTC and SLIIT. The establishment will help to improve the IT industry and reduce students leaving abroad for higher education, most failing to return.

SLIIT originated with the foresight of one individual, without Government support, had to face disturbances by subsequent politicians, but managed to reach high, with the support of likeminded directors. NSBM received free land and Rs. 8.1 billion State support. Its target of 30,000 students is high, with students having to pay over Rs. 1.6 million for a course.

Meanwhile, SLIIT is a non-profit organisation running without an accountant or an internal audit. But the payback of advances from MTF and continuous expansion shows the profit-making nature. Professor Lalith Gamage is responsible for bringing SLIIT to current status while facing various setbacks. But how about afterwards?

SLIIT has made a pioneering contribution to IT education and created employment opportunities to local students. But some politicians who oppose student advancement wish to sabotage the situation. To rectify the situation the President needs to move in.

First, the land on which SLIIT standing is owned by Mahapola Fund and needs to be transferred to SLIIT. Also around two acres land from the proposed investment zone in Narahenpita to SLIIT to relocate its Colombo branch, currently located in BOC Merchant Tower. In return, the SLIIT administration needs to discuss with the President on stabilising the organisation, also to submit their annual accounts to the President, who would present same to the Parliament.