UNP to let urban voter decide its fate?    



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On Wednesday last week, the Joint Opposition made some startling allegations relating to conflict of interest and financial impropriety against the Minister of Development Strategies and International Trade Malik Samarawickrema and a trustee of the Mahapola Higher Education Trust Fund Dr Wickrema Weerasooria. On Friday, parliamentarian Mahindananda Aluthgamage tabled in parliament the documents that he and some other MPs in the Joint Opposition including Sisira Jayakody had handed over to the Bribery Commission last Wednesday with regard to these allegations. According to those documents, the conflict of interest allegation levelled against Weerasooria centers on that he is the Chairman of National Wealth Corporation which is owned by the Mahapola Higher Education Scholarship Trust Fund and that the National Wealth Corporation in turn owns 100% of National Wealth Securities – a state owned Primary Dealer.


 The Joint Opposition states that at the same time, Weerasooria is also one of the main shareholders of Wealth Trust Securities a private Primary Dealer of which his son Senaka Weerasooria is a director. Furthermore, SAFE Holdings and the Finco Group which also belong to Weerasooria and his family are among the other main shareholders of Wealth Trust Securities. The Joint Opposition states that the state owned primary dealer – National Wealth Securities is running at a loss of Rs. 188 million whilst the privately owned primary dealer – Wealth Trust Securities is running at a huge profit of Rs. 522 million. The Joint Opposition has pointed out another conflict of interest in that Weerasooria is the Chairman of National Wealth Corporation Ltd which is a SEC regulated Investment Manager and that he is at the same time Chairman of Asset Trust Management Pvt Ltd, which is also a SEC regulated Investment Manager and they pose the question as to how he can be the Chairman of two Companies, one owned by the state and one privately owned/chaired by him, where both companies are regulated by the SEC under the same Investment Manager category?


The Joint Opposition alleged that due to this conflict of interest relating to Dr Weerasooria, the state owned– National Wealth Securities is running at a loss whilst his privately owned company Wealth Trust Securities is thriving. They point out that National Wealth Securities is making losses when it was making profits in 2013 and 2014 during the past regime and they have questioned why Wealth Trust Securities is making huge profits when both Natwealth Securities and Wealth Trust Securities are in the same industry dealing in the same bonds? It was also pointed out by the Joint Opposition that the directors of National Wealth Corporation and National Wealth Securities were virtually the same with only Dr Weerasooria himself being omitted from the latter. The Directors of National Wealth Corporation are: Dr. Wickrema Weerasooria – Chairman, Gamini Wijesurendra, Shirantha Herath, Ms. Thusitha Senaratne, Buddhika Jayasinghe  and Chandimal Mendis.


The directors of National Wealth Securities are: Gamini Wijesurendra – Chairman,


Shirantha Herath, Ms. Thusitha Senaratne,  Buddhika Jayasinghe,  Chandimal Mendis. Among the documents tabled by the Joint Opposition in parliament last Friday were:


*  Two notes giving the narrative above and stating among other things that the Mahapola Higher Education Trust Fund had been under the Trade Ministry since its founding in 1980 and that it had been allocated to the Ministry of International Trade and Strategic Development in 2015.


*  A financial statement of Wealth Trust Securities showing profits of Rs. 359 million for 2015 and 522 million for 2016.


*  A financial statement of National Wealth Corporation indicating that they made profits of Rs. 560 million in 2014 and losses of Rs. 188 million in 2015.


*  A document from the Companies Registrar dated 15 June 2016 indicating that Wickrema Sena Weerasooria of No: 10 Classen Place Colombo 5 is a director of Wealth Trust Securities (Pvt) Ltd


*  Another document from the Companies Registrar indicating that the three largest shareholders of Wealth Trust Securities are Finco Holdings (Pvt) Ltd, Safe Holdings (Pvt) Ltd and Dr Wickrema Sena Werasooria in that order. In another document, the Joint Opposition has given a breakdown of the share ownership of Wealth Trust Securities as follows (in a situation where SAFE Holdings and Finco Holdings also belongs to Dr Weerasooria and his family.)


Dr Wickrema Sena


Weerasooria 6,025,601 shares         


SAFE Holdings


(Private) Ltd  6,819,200 shares


Finco Holdings


(Private) Limited     8,000,000   shares  


Last Thursday, Minister Malik Samarawickrema and Dr Wickrema Weerasooria held a press conference to explain matters and it was stated that both National Wealth Corporation and National Wealth Securities were formed by Ravi Karunanayake in 2003 when he was the trade minister. At that time too, Dr Weerasooria had been appointed a director of National Wealth Corporation by Minister Karunanayake. National Wealth Corporation cannot make investments because it is a holding company and the investments were handled by National Wealth Securities. Over the years, the Mahapola Fund had increased from Rs. 3 billion in 2003 to Rs. 8 billion in 2016. At this press conference, a document was distributed to journalists giving a breakdown of all the private companies in which National Wealth Corporation (of which Dr Weerasooria is Chairman) had investments and the names of Wealth Trust Securities, Finco Holdings, and SAFE Holdings were not on that list.


The total amount held by National Wealth Corporation in all these private institutions together was around Rs. 1.56 billion. The private institutions in which National Wealth Corporation has investments are - People’s Merchant Finance PLC, Melsta Regal Finance Ltd, Peoples Leasing & Finance PLC, Bank of Ceylon, Commercial Bank of Ceylon PLC, First Capital Holdings PLC, HDFC Bank, LB Finance PLC, Merchant Bank of Sri Lanka, Nations Trust Bank PLC, NDB Bank  PLC, Peoples Leasing & Finance PLC, Sampath Bank PLC, Senkadagala Finance PLC, Seylan  Bank PLC, Singer PLC and Siyapatha Finance PLC.


Dr Weerasooria explained that he was only the nominal Chairman of National Wealth Corporation and not responsible for the day to day running of that body and that once a month he would attend the board meetings of National Wealth Corporation – which was as far as his involvement with that body went. National Wealth Corporation and National Wealth Securities are separate entities but both are wholly owned by the Mahapola Trust Fund. As far as the National Wealth Securities, the primary dealer is concerned, Dr Weerasooria stated that he is not responsible for the day to day activities of that body and neither does he attend the board meetings of the primary dealer. At the press conference Dr Weerasooria said that there was no conflict of interest in his being the Chairman of National Wealth Corporation which is only a holding company and not a primary dealer.


The board of trustees of the Mahapola Higher Education Scholarship Trust Fund is made up of the Chief Justice as the Chairman, the Minister in charge of Trade, the Secretaries of the Ministries of Higher Education, Education and Trade, and two persons appointed by the Minister.  In its capacity as a primary dealer, National Wealth Securities can transact business with any other primary dealer including Wealth Trust Securities. However, the documents tabled by the Joint Opposition in parliament did not indicate any transactions between National Wealth Securities and Wealth Trust Securities, or allege an unusual volume of transactions between those two primary dealers.


This writer learns that the reason why the Mahapola Trust Fund is now with the Ministry of Strategic Development and International Trade is because Sections 19 and 3(1) of the Mahapola Higher Education Scholarship Trust Fund Act No. 66 of 1981, stipulates that the ‘administration, management and control’ of the fund will be with the Minister in charge of the portfolio of trade and in this cabinet the only minister with ‘trade’ as part of his portfolio is the Ministry of Strategic Development and International Trade. (Rishad Baithiudeen is the Minister of Industry and Commerce.) After the change of government in January 2015, the Mahapola Trust Fund had been under the Minister of Food Security Gamini Jayawickrema Perera until the parliamentary elections of August 2015 when it was gazetted under the Ministry of Strategic Development and International Trade.


Though playing a low profile role in the present government as an advisor to president Sirisena, Dr Weerasooria was one of the key figures and most colourful characters in the UNP government headed by J.R.Jayewardene between 1977 and 1988. An academic lawyer with a razor sharp mind he has written seminal books on subjects as wide ranging as banking and insurance law and the Buddhist Temporalities Ordinance and related litigation – the latter being considered the premier text on the subject. For many years he was an Associate Professor of law attached to Monash University in Australia. He is not only one of Sri Lanka’s most eminent legal academics, but in his role as the Secretary to the Ministry of Plan Implementation under president J.R.Jayewardene, one of the chief architects of the social and economic transformation of 1977. Dr Weerasooria has the rare attribute of being intellectually brilliant and at the same time having practical good sense which is why President J.R.Jayewardene would have found in him an invaluable advisor and  administrator.


Can the UNP fall back


on the urban vote?


Last week, parliamentarian Wimal Weerawansa told the media that the government was going to hold elections to the Municipal Councils and Urban Councils first because they feel that they – meaning the UNP and the SLFP Sirisena faction -  have a better chance of winning in the urban areas rather than in the rural areas covered by the Pradeshiya Sabhas. This is certainly a possibility given the fact that the government is thrashing around looking for survival strategies. Holding elections in the areas that are most favourable to them in the hope that early victories will have a domino effect on the elections to the Pradeshiya Sabhas when they are held, would certainly look like a good option for the government. Some ministers were mulling the possibility of avoiding the local government elections altogether and going in for the provincial council elections. But at PC elections, the urban as well as the rural electorates all come into play and that might be a disadvantage whereas at local government elections, it is possible to isolate the urban areas for the first round of elections.


 According to the results of the 2011 local government election on the Elections Dept. website, the following towns (outside the North and East) have either Municipal Councils or Urban Councils - the natural constituencies of the UNP: Anuradhapura, Bandarawela, Haputale, Badulla, Seetawakapura, Maharagama, Boralesgamuwa, Kaduwela Kesbewa, Colombo, Dehiwala-Mt Lavinia, Kotte, Kolonnawa, Ambalangoda, Hikkaduwa, Moratuwa, Galle, Wattala-Mabole, Peliyagoda, Katunayake-Seeduwa, Ja Ela, Minuwangoda, Gampaha, Negombo, Tangalle, Hambantoita, Panadura, Horana, Kalutara, Beruwela, Wattegama, Kadugannawa, Gampola, Nawalapitiya, Kandy, Kegalle, Kuliyapitiya, Kurunegala, Dambulla, Matale, Weligama, Hatton-Dickoya, Nuwara Eliya, Puttalam, Chilaw, Balangoda, Embilipitiya, Ratnapura. This is not an exhaustive list as some towns like Matara appear to have been omitted, but there are 48 towns here, and will suffice for the present.    


 Of the 48 Municipal and Urban Councils outside the North and East named above, the UNP won only 7 in 2011 - Bandarawela, Seetawakapura, Colombo, Kalutara, Kadugannawa, Gampola and Kuliyapitiya. That was when the UNP was on a weak footing. If the results of the 2011 local government elections are juxtaposed with the results of the 2015 August parliamentary election when the UNP was on a strong footing, it may be possible to extrapolate from that the number of Municipal and Urban Councils the UNP may be expected to win at the next election. If the UNP was able to win the electorate in which the MC or UC was situated, at the August 2015 parliamentary elections, then it may be safe to surmise that they will be able to win the MC or the UC in the area because the UNP generally tends to have more support in urban settings.


 Given the overwhelming majorities that the UNP got in all five electorates within the Colombo city at the last parliamentary elections, they should be able to easily carry the Colombo MC with a massive majority at the forthcoming LG elections. Even Though the UPFA won the Dehiwela-Mt Lavinia MC at the 2011 election, given the massive majorities that the UNP got in the Dehiwela and Ratmalana electorates, at the 2015 parliamentary election, they should be able to easily win the Dehiwela-Mt Lavinia MC as well.  The same could be said about the Kolonnawa UC and the Sri Jayawardenapura MC. Even though the UNP lost the Avissawella electorate in August 2015, they may still win the Seetawaka UC which has always been a bastion of support for the UNP. The UNP won the Moratuwa electorate by a slim majority at the 2015 parliamentary election and if this support holds they may win the Moratuwa MC as well even though they had lost it by a significant margin at the 2011 local government elections.


Moving onto the Gampaha district, the UNP won the Wattala electorate with a large margin so they should be able to carry the Wattala-Mabole MC with ease this time even though the UPFA won it in 2011 at the last local government elections. The same could be said about the Negombo MC. Even though the Ja Ela UC was won by the UPFA in 2011, since the UNP won convincingly in the Ja Ela electorate, they should be able to win the Ja Ela UC this time around as well. The Peliyagoda UC was won by the UPFA in 2011, however the Kelaniya electorate was won by a slim margin by the UNP in August 2015. Despite this, the probability is that the Peliyagoda UC will not be won by the UNP this time around.  Even though the UNP lost the Kalutara electorate by a slim margin at the last parliamentary elections, they still stand a good chance of winning the Kalutara UC because they were able to win it even in the midst of adversity in 2011.


Though the UPFA won the Beruwela UC in 2011, it is unlikely that they will be able to win it at a future local government election because of the large margin with which the UNP won that electorate at the 2015 parliamentary elections. Given the large majorities that the UNP got in almost all the Kandy electorates, the probability is that they will win all the MCs and UCs in the Kandy district including Wattegama, Kadugannawa, Kandy, Gampola and Nawalapitiya. Though the UPFA won the Matale MC in 2011, the UNP won the Matale electorate with a large majority in August 2015 which indicates that they will win the Matale MC at a future LG election. The Nuwara Eliya MC is a sure win for the UNP as is the Hatton-Dickoya UC.  Because of the large majority that the UNP got in the Galle electorate, they will be able to win the Galle Municipal Council this time around. The UNP won the Kuliyapitiya UC in 2011 and the Kuliyapitiya electorate in 2015 so there is the probability that they would be able to retain control of the UC in the future as well. The UNP won the Kurunegala electorate in 2015, but they may not be able to win the Kurunegala MC at a future LG election.


The UNP will win the Puttalam UC and the on balance the Chilaw UC as well because the UNP won both electorates in August 2015 - the latter with a smaller margin than the former. The Bandarawela and Badulla MCs and the Haputale UC will be won by the UNP. In Ratnapura, the Balangoda UC may go to the UNP.  Thus the UNP stands a good chance of winning 25 of the 48 MCs and UCs if they retain the same support they had in August 2015. If however the UNP’s traditional urban base has been eroded due to the falling out between supporters and politicians due to the non delivery of expected benefits, and the anger unleashed by the decision to impose VAT on the wholesale and retail trade then they may be in for a shock. The high taxes on vehicles also affects this particular urban constituency more than others. So if the UNP decides to hold the elections in the urban areas first, they will be falling back on their traditional base, but also running a risk at the same time. In the past couple of years, the UNP has been rubbing this urban constituency on the wrong side unlike any previous UNP government.


After shocks of the budget


True to form, the government has managed to complicate a simple matter like a traffic fine and turn it into an issue that precipitates a veritable uprising. A transport sector strike has been announced for December 1 unless the government backs down. The decision announced in the budget to increase the lowest traffic fine to Rs. 2,500 drew a storm of protest and due to the threat of a work stoppage by bus owners, lorry owners, trishaw owners etc. the government backtracked and desisted from increasing the minimum fine to 2,500. During the heated arguments over this matter, bus owners were heard saying that they don’t mind if the traffic fines are increased even to Rs. 25,000 for ‘serious offences’ without the minimum fine being increased to Rs. 2,500. The government taking them literally desisted from increasing the minimum fine but slapped a fine of Rs. 25,000 on seven traffic offences which were considered serious. One of the offences which was considered serious was driving above the speed limit.


It’s a different matter imposing a fine of Rs. 25,000 for an offence like driving without ever having obtained a driving licence. But to impose a fine of Rs. 25,000 for speeding was sheer insanity. In this country, other than on the few highways available, vehicles have to crawl along for the most part and when there is less traffic they have to try to make up for the lost time. On most roads you can’t travel at more than 50 kmph and if all vehicles stick to this rule all the roads will be clogged with slow moving traffic. Furthermore to get written up for speeding does not mean that you were driving recklessly. Driving just one or two km above the speed limit is enough to get you a fine and the cops wait behind bushes to pounce on unwary motorists. When you are on a long distance trip if you get booked and you are unable to interrupt your journey to pay the fine and retrieve your driving licence or if you are detected after the post offices close, then you have to travel all the way back to pay the fine and collect your driving licence. In such circumstances, to increase the fine for ‘speeding’ to Rs. 25,000 is a way of turning the day to day lives of a good number of people into a nightmare.  


 


 
 
 
 
 
 
 
 
 
 
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