Kariyawasam

The Chairman of the Securities and Exchange Commission (SEC) Udayasri Kariyawasam said the commission has sought an opinion from the Attorney General’s department before commencing investigations into the sale of Sri Lanka Insurance Corporation.

"Being a state organisation, we decided to seek an opinion form the Attorney General before we commence investigations in to the privatisation of Sri Lanka Insurance Corporation (SLIC)," Kariyawasam told the Island Financial Review.

Kariyawasam is also the Chairman of the Insurance Board of Sri Lanka (IBSL).

He said he had signed a formal letter last Friday requesting the Attorney General’s opinion.

Late last month the Supreme Court accepted the government’s nominees to the new Board of Directors.

After the Supreme Court nullified the privatisation deal, the state had to issue 5-year Treasury bonds amounting to Rs. 6 billion to buy back the insurance company from Distilleries Company of Sri Lanka.

Although the government now owns the company, a senior lawyer said the Board of Directors should be careful when running the business and not allow any room for undue influence from public officials and politicians.

"Although the shares of SLIC were given back to the government it is not a public company. SLIC is governed by the Companies Act therefore the Board of Directors will be directly responsible for running the company," President’s Counsel Dr. Harsha Cabraal said addressing the Sri Lanka Economic Summit last week.

"The Board of Directors should be independent and the government and Treasury should leave it to them to make major decisions in the best interest of the company. According to the Companies Act the Board of Directors are not immune to accountability where as the government and Treasury cannot be held responsible for how SLIC would be run," he said.

Dr. Cabraal said the onus would be on Board of Directors to decide on SLIC’s share ownership of other listed companies, especially with regard to Lanka Hospitals, the owners of Apollo Hospital.

According to Treasury Secretary Sumith Abeysinghe, Pradeepa Kariyawasam heads the new SLIC Board.

Anura Meddegoda, R.A. Jayatissa, Chithral Amaratunga, Dr. Nalaka Godahewa, Ravi Abeysuriya, and A.P. Lekamge are the other members of the Board of Directors.  

Judicial activism...

Speaking at the Sri Lanka Economic Summit, three senior lawyers, President’s Council Parliamentarian Wijeyadasa Rajapaksha (author of the COPE report into mismanagement of 23 public institutions), Dr. Harsha Cabraal and J. C. Weliamuna (Executive Director of Transparency International), said judicial activism which resulted in the nullification of privatisation deals of SLIC and Lanka Marine Services Limited, may not be in the best interest of the country at a time when foreign investments are being attracted.

Nihal Sri Ameresekere, former Chairman of the Public Enterprises Reform Commission, and Vasudeva Nanayakkara, Advisor to the President, were responsible for taking the privatisation deal before the Supreme Court.

According to them, the case exposed how politicians, public officials and businessmen connived to fleece the public.

Abdeen Associates, on behalf of Nanayakkara, have sent letters of demand to the IGP, CID, Institute of Chartered Accountants, Securities and Exchange Commission (SEC) and Controller of Exchange to investigate and prosecute those involved in the fraudulent deal.

Ameresekere, an advocate of the free market, earlier said that exposing these deals would help strengthen the rule-of-law and promote transparency in the realm of public-private sector transactions and help attract better investments.

However, Rajapaksha, Dr. Cabraal and Weliamuna said the rule of law, transparency and accountability would need to be improved if bribery and corruption were to be minimised.