Close on the heels of a landmark Supreme Court judgment against the privatisation of Lanka Marine Service Limited (LMSL), Vasudeva Nanayakkara, an advisor to the President, has called on the Criminal Investigation Department (CID) to investigate the alleged involvement of former President Chandrika Kumaratunga and Opposition Leader Ranil Wickremesnghe in the transaction.

The former PA MP, who successfully moved the SC against the government-John Keells Holdings (JKH) deal, told The Island that a comprehensive investigation was needed to establish the involvement of politicians as well as private sector top guns. The investigation should go beyond Dr. P. B. Jayasundera, the then PERC (Public Enterprises Reform Commission) Chairman, he said. The investigation had to be part of the overall campaign against waste, corruption and irregularities, Nanayakkara said.

Jayasundera had been faulted by the Supreme Court for facilitating the sale of the LMSL, a profit making subsidiary of the CPC to JKH under questionable circumstances, he said. The Treasury Chief had been punished but that shouldn’t be the end of the case, he said.

Nanayakkara said Sisira Mendis, the DIG, in charge of the CID, would question Ms. Kumaratunga, UNP leader Ranil Wickremesinghe, K. N. Choksy, who had held the finance portfolio at the time of the transaction, the then Treasury Chief Charitha Ratwatte, the then Advisor to the Prime Minister R. Paskaralingham and Mrs Gunawardene of PERC.

Wickremesinghe, in an affidavit to the Supreme Court, took up the position that the institution of LMSL case amounted to a breach of the privilege of Parliament and its members. He went on to ascertain had he filed answer in this case he would be bringing Parliament before the jurisdiction of the Courts.

Vasudeva has reminded the CID Chief and IGP Jayantha Wickremaratne of their responsibility to question and record statements of the suspects in keeping with the Supreme Court ruling. The police would have to act in terms of the Offences against Public Property Act No 12 of 1982 and the Penal Code.

Nanayakkara’s missive has been copied to Ameer Ismail, Chairman, Commission to Investigate Allegations of Bribery or Corruption and Lalith Weeratunga, Secretary to the President.

Nanayakkara has also drawn their attention to the urgent need to investigate the failure on the part of the then administration to recover Rs. 1,199,362,500 for the transfer of an eight acre land at Bloemendhal Road from JKH. The Supreme Court has declared that the transfer of the land by President Kumaratunga had been carried out through a fraudulent process. Nanayakkara said that the relevant file at the Presidential Secretariat would reveal the persons responsible for the fraudulent transaction.

Meanwhile, Krisan Balendra, President-Corporate Finance Strategy said that legal opinion suggested that the JKH reversed the Bloemendhal Road land transaction as the acquisition of the land had been declared null and void by the Supreme Court, while the accounting opinion suggested a de-recognition of the land in the absence of criteria set out in SLAS 10 (ACCOUTING POLICIES, CHANGES IN ACCOUNTING ESTIMATES AND ERRORS). Balendra said, "Financial statements for the quarter ending September 30, 2008, which will be released next week, will be prepared on the basis of the legal opinion which states that LMSL cannot de-recognize an asset that did not exist in law. Accordingly, the financial statements will be restated to reflect the reversal of original entries. We will be approaching the Urgent Issues Task Force (UITF) of the Institute of Chartered Accountants of Sri Lanka for confirmation of this accounting treatment. A de-recognition will result in a non-cash impact to the consolidated income statement of Rs. 730 million and will not result in any additional impact on net assets per share, since an equivalent value would have been recognized as a reversal in the financial statements for the quarter ending 30 September, 2008."

The blue chip conglomerate has briefed the Colombo Stock Exchange on this development.