Politicians would have continued to turn a blind eye to the illegal privatization of Sri Lanka Insurance Corporation if the fundamental rights application against the deal had not been filed, Nihal Sri Ameresekere and Vasudeva Nanayakkara told journalists yesterday at a special media conference to discuss the recent Supreme Court judgment.

The landmark Supreme Court judgment that nullified the privatization of the Sri Lanka Insurance Corporation (SLIC) on the grounds that it was wrongful, unlawful and illegal was only possible because a Public Interest Activist and a senior politician decided to file a fundamental rights application.

This is a sad reflection of the state of affairs in which the government and parliament function as custodians of public property, where nothing was done even after a special Parliamentary report in 2006 exposed the fraudulent deal, and several others including the sale of Lanka Marine Services to John Keells Holdings.

Nothing was done until Ameresekere, a professional accountant and consultant, who believes in a free market economy and Nanayakkara, a left wing politician, joined forces and filed a fundamental rights application in the Supreme Court in 2007.

"Several years ago a COPE report to Parliament highlighted several irregularities in the privatization of SLIC and Sri Lanka Marine Services (LMS) but the Parliament did nothing about them. Had we not filed action against these deals before the Supreme Court, politicians would have continued to turn a blind eye to them," Ameresekere said.

The lengthy Supreme Court ruling could best be summed up in a single paragraph recorded on page 59 of the ruling: "It is sufficient to say this Court is shocked by the manner in which the senior public officers had handled the sale of a pivotal asset of the State which belongs to the people of this country."

Ameresekere and Nanayakkara said the case exposed how politicians, public officials and businessmen connived to fleece the public.

Milford Holding Pvt. Ltd of Singapore and its local agent Greenfield Pacific EM Holdings Ltd had bought a 90 percent stake of SLIC for about Rs. 6 billion and were not even incorporated when the Cabinet granted approval for the privatization to take place where Harry Jayewardene was signatory to the deal. It was Distilleries Company of Sri Lanka, headed by Jayewardene, which had submitted the successful bid ‘through the back door’.

Ameresekere said the 90 percent share will come back to the government and the government would issue Treasury bonds amounting to Rs. 6 billion redeemable in five years. The Director Board as already been removed.

Politicians and top public officials have either denied knowing of the privatization deal or challenged the fundamental rights application of Ameresekere and Nanayakkara on the grounds that it was the parliament’s decision to handle the issue.

Auditing firms PriceWaterHouseCoopers and Ernst and Young have been exposed by the judgment for unethical conduct of their senior partners.

"Now it is up to the government, the CID, the Bribery Commission, Securities and Exchange Commission and the Chartered Institute of Accountants to carry out investigations and penalise wrong doers," Ameresekere said.

"What we filed was a fundamental rights application. Now it is up to the government to take the matter up with the penal code where jail terms and fines will be the just deserves of those who let this fraud take place," he said.

Nanayakkara said it was not over.

"There are politicians who are in the ruling government and so it will be doubtful whether the CID, Bribery Commission or the Auditor General would take the matter further," he said.

Ameresekere plans to file another public interest case against the oil hedging deals of the Ceylon Petroleum Corporation. He said the government has to pay as much as US$ 900 million if the hedging contracts are honoured.