Money from Panama and Latvia in Udayanga’s accounts

Rajapaksa govt.’s controversial MiG deal – Part III



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By C.A.Chandraprema


Today, anything that the public sees in the media about the MiG deal, would invariably centre around Udayanga Weeratunga. In the past months and weeks, the media has reported that Weeratunga had 16 bank accounts in Sri Lanka (which have since been frozen) with total deposits equivalent to about USD 1.5 million. According to a recent media report the FCID has claimed that money was credited to these accounts at various times from Panama and Latvia. In addition to involvement in the MiG deal, the yahapalana authorities have accused Udayanga of killing a subordinate and even stealing furniture from the residence of the Sri Lankan Ambassador in Russia. Weeratunga, for his part, has charged that a witch hunt is being carried out against him and publicly refused to make things easier for the hunters by presenting himself in Sri Lanka to be victimised.


Today, with an international arrest warrant hanging over him, Weeratunga is a fugitive from the FCID and it is through him that the MiG matter is being kept alive in the media. Weeratunga was, in fact, involved in the MiG deal as a facilitator. As Sri Lanka’s Honorary Consul in Ukraine at the time and later as the Ambassador to Russia, it was inevitable that he would play some role in facilitating a government to government deal between Sri Lanka and Ukraine. On 26 March 2015, the FCID first stuck to the parameters of the original newspaper reports about the MiG deal of 2006 and was all about the difference in the price between the MiG-27s bought in 2000 and in 2006, and the payment thereof being made to Bellimissa Holdings instead of direct to UKRINMASH.


However from laster things took a different turn. The FCID said that the 2006 contract for the supply of four MiG-27s and the overhaul of four other MiG aircraft had been signed in two different places with UKRINMASH and Bellimissa Holdings signing the contract at the official residence of Udayanga Weeratunga, the Sri Lankan Ambassador to Russia, with the contracts being thereafter brought to Colombo by Weeratunga to be signed by the Air Force Commander. From this point, the entire focus of the FCID investigation shifted to Udayanga Weeratunga. As the previous parts of this article would indicate, the facts do not allow for the allegations about the price difference or the payment of the purchase price to a party other than UKRINMASH to be sustained.


Weeratunga on the other hand would appear to provide much better grist for the mill. Even Weeratunga’s posture and body language during these ‘sightings’ received wide publicity. It was claimed in October 2016 that Weeratunga had brought the 2006 MiG contract in quadruplicate to be signed by the Air Force Commander after it had been signed by the representatives of UKRINMASH and Bellimissa Holdings in Russia.


Upon the Air Force Commander placing his signature on it, he had left one copy with the Air Force and had taken away the other three copies saying that they had to be given to UKRINMASH and Bellimissa Holdings.


How the contract became a forgery


Most importantly, the FCID said it had contacted the Ukrainian Justice Ministry through the Sri Lankan Justice Ministry and that the Ukrainian Attorney General’s Department had informed Sri Lanka by letter dated 24 June 2016 that no contract had been signed between the Sri Lankan Air Force and UKRIMNASH and that UKRINMASH had not signed any contract with Bellimissa Holdings either. Based on this letter, the FCID said the 2006 contract bearing No: SLAF/2006/07/AIR for the supply of four MiG-27 aircraft and the overhaul of four other MiG aircraft was a forged one, which Weeratunga had presented to the Air Force Commander and obtained his signature on it through misrepresentation.


To bolster the forgery charge, the FCID claimed that when examining the previous correspondence pertaining to this transaction the signature of UKRINMASH Director D. A. Peregudov in the contract appears different to his signature in other correspondence with the Air Force. The embassy official in Russia who had witnessed the signatures on the 2006 MiG contract had also told the FCID that he did not know the persons who had signed on behalf of UKRINMASH and Bellimissa Holdings and that there appeared to be a difference between the signature of D.A.Peregudov as it appears in the contract and his earlier correspondence with the government of Sri Lanka. On this basis, the FCID claimed that Weeratunga had committed the offence of forgery under Sections 454 and 457 of the Penal code.


Furthermore, the FCID said the money paid for the MiG aircraft had not been sent to the UKRINMASH account by the Sri Lankan government but to the account of Bellimissa Holdings Ltd and further that Bellimissa Holdings had not sent the money to UKRINMASH and, therefore, Weeratunga was complicit in preparing a forged document and defrauding money from the state which amounts to the offences of ‘cheating’ and the use of forged documents coming under Sections 400 and 459 of the Penal Code. The FCID is also investigating Weeratunga under Section 5 of the Offences Against Public Property Act No: 12 of 1982 which is about the dishonest misappropriation of public property through the falsification of documents.


The FCID claimed that the original contract No: SLAF/2006/07/AIR for the supply of four MiG-27 aircraft and the overhaul of four other MiG aircraft had been in the possession of the Air Force until 4 June 2009 when it was taken into the custody of now retired Air Vice Marshall Jayanath Kumarasiri to be produced as evidence and that it had been in the possession of this officer until 12 September 2014 when he retired but that there is no evidence to show that it had been handed over to the clerks in his department when he retired and that the original copy is now missing.


Thus, the investigation into the MiG deal has strayed very far from the original issues raised by a section of the press about the difference in the prices of the aircraft and the payment of the money to a party other than UKRINMASH.


It’s being said that there was no contract between UKRINMASH and the Air Force when four fully overhauled MiG-27s were delivered to Sri Lanka and four other MiG aircraft already in the possession of the Air Force were taken from Sri Lanka all the way to Ukraine for overhaul and brought back and all eight planes are still in the possession of the Air Force.


Other than the contract itself, there are many other letters exchanged between UKRINMASH and the Sri Lanka Air Force pertaining to this transaction. It was after perusing this documentation that the FCID claimed that the signature of UKRINMASH Director D. A. Peregudov on the contract and in other correspondence do not match. With regard to the alleged mismatch between Peregudov’s signatures, Weeratunga has said the contract for the purchase of four MiG-27s and the overhaul of four other MiG aircraft of 26 July 2006 had been signed by Gennadii Studenikin the then Deputy Director of UKRINMASH, who was authorised to sign on behalf of D. A.Peregudov, Director of UKRINMASH.


This Studenikin had come to Sri Lanka to negotiate the contract with the Air Force and it had been he who had taken Air Commodore E.G.I.P De Silva the head of aeronautical engineering of the Air Force and Air Vice Marshall W. D. R. M. J. Goonetillke at different times to inspect the UKRINMASH facilities and it was he who had also signed the final acceptance certificates for all eight aircraft along with E. G. I. P De Silva of the Air Force.


The Ukrainian AG’s department may have written back saying that they have no evidence of a contract between UKRINMASH and the SLAF but it has to be remembered that after the MiG transaction of 2006, Ukraine experienced a violent and disruptive political coup with an elected President being forcibly deposed and the country itself being dismembered.


The present holders of power in Ukraine are the mortal enemies of the previous powers that were. Control over UKRINMASH, a state owned enterprise has also obviously changed. This background has to be taken into account when evaluating the veracity of the letter received from the Ukrainian AG’s Department. The fact that the present authorities in Ukraine cannot find any contract between the SLAF and UKRINMASH does not mean that it did not exist. The FCID’s own reports indicate that the copy of the original contract is a genuine copy of the original. In any event, there are many other documents that prove that a contract existed between UKRINMASH and the SL Air Force.


Kickbacks and the Panama connection


For example, there is the ‘letter of guarantee’ dated 9 June 2006 written by Air Force Commander Donald Perera to UKRINMASH Director D.A.Peregudov guaranteeing that the contract for the supply of four MiG-27s and the overhaul of four other MiG aircraft will be signed before 30 June 2006. This letter guaranteed payment terms in the UKRINMASH letter of 26 April 2006 and requested them to begin the overhaul of the planes without waiting for the contract to be signed in view of the possibility of the resumption of war in Sri Lanka. This was sent off by the Air Force Commander without any intervention from Weeratunga. UKRINMASH had in fact started overhauling the aircraft on the strength of this letter and a team from the SL Air Force had been stationed at the plant in Ukraine to observe the overhaul process every step of the way.


Getting a government to government agreement signed by the foreign party at the Sri Lankan Ambassador’s premises in the presence of the Ambassador is also an accepted practice and is one of the purposes for which countries maintain embassies in foreign countries.


The FCID’s report stating that there was more than USD 1.5 million in Weeratunga’s Sri Lankan accounts was published in the media in a manner suggesting that this could be the kickbacks from the MiG deal. However, Weeratunga has said that this money represents his savings which he has remitted to Sri Lanka from time to time over the past two decades. His NRFC accounts in the Commercial Bank and HSBC had been started in 1990 and 1999 respectively. The factors that would give Weeratunga the benefit of the doubt in this regard is that he had been a businessman in Ukraine for many years and from the early 1990s, he had taken it upon himself to entertain visiting Sri Lankan ministers – an exercise that people of restricted means would not undertake. His appointment as Sri Lanka’s Honorary Consul in Ukraine after a personal interview with Lakshman Kadirgarmar in 1999 also indicates that he was deemed to have the means to hold such a position.


Recent media reports said that the FCID had found that money had been credited to Weeratunga’s Sri Lankan accounts from Panama and Latvia. The name ‘Panama’ automatically conjures up images of black money and kick backs. However, offshore companies and bank accounts in places like Panama are perfectly legal and those who provide banking services to these front companies are top European banks such as Credit Suisse, HSBC and Societe Generale. These mechanisms are used mostly by legitimate businesses with crooks also using them to stash away ill-gotten gains. Weeratunga has said that the money that has come into his accounts from places like Panama are the proceeds of his tea export business. In Ukraine and that he has been remitting money to Sri Lanka through the same channels as other Sri Lankan exporters of tea to Russia and Ukraine.


That our export trade receives payments through the offshore accounts of their buyers overseas is well known. If an exporter has money remitted to his account from Panama, that by itself is no indication that it has been illegitimately earned. Merely stating that Weeratunga had money remitted to his account from Panama is not going to get anyone anywhere unless it is specifically proved that the said money was the kickback received from the MiG deal. It is very unlikely that anyone trying to hide his money would get it openly remitted to his Sri Lankan accounts from an account in Panama. In any event all such remittances to Sri Lanka are scrutinized by the Financial Intelligence Unit of the Central bank and if there had been anything suspicious about these remittances, it would have come to the notice of the FIU long ago.


Concluded


 
 
 
 
 
 
 
 
 
 
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