Once the country’s most prestigious recreational and sports clubs, Gymkhana has fallen under the iron grip of a few shady officials who have been carrying out some corrupt activity for a long time at one of Colombo Seven’s most iconic landmarks to bring the club to its knees, while their latest unscrupulous adventure seems set to rob the country of a few billion Rupees.
Prasantha Wimalasena, none other than the secretary of the club has spilled the beans of a massive deal that is on the verge of robbing the government of potentially Sri Lanka’s most expensive piece of real estate.
Part of prime 6.5-acre State land in Colombo 7 worth Rs. Billions to be leased out by the club without government approval for apartment complex
Wimalasena, who had had enough of the corrupt activity perpetrated by a few top officials, made a bold move to become the whistle-blower of what is going on, and has been involved in a few costly legal battles for the past few months in the hope of purging the club of corrupt elements and restoring it past glory as one of Sri Lanka’s most elite sports clubs.
Gymkhana Club is housed at probably the most prominent Colombo Seven property which is owned by the State. The club obtained this priceless piece of land through the Land Commissioner’s Department, on a 30-year long-term lease from January 1, 1991.
The land which has a total extent of 6.5 acres and 10 perches has been leased to the club for its sports activities which includes a Cricket wing - CCC, Rugby wing - CH and FC, Tennis wing - Queens Club and several other disciplines like Hockey and Squash.
The lease is to expire in 2021, and it is obvious that the club has no claim for ownership or at least the right to occupy the premises beyond that. Wimalasena confirmed that he had verified with the land commissioner that no extension has been granted to Gymkhana beyond 2021 to occupy the land that they first occupied in 1957.
But on or about October 8 this year, the club president Shammi Silva and Treasurer Kapila Ranasinghe had entered into a questionable agreement with a company called Fairway Developments Limited to lease them a part of this state land at least for a period of 25 years for the construction of an apartment complex.
It had been done arbitrarily without the approval of the club members or informing the government which owns the land.
The Development company has already paid Rs. 15 million to the club and is ready to start the project pending the UDA Planning and Building approval. This payment had been made through two cheques, one for Rs. Ten million from the company’s subsidiary Fairway Galle (Private) Limited and another for Rs. 5 million from another subsidiary of the company called Fairway Elements (Pvt.) Limited.
Interestingly, this agreement had been executed by the club officials who are a law unto themselves whilst a stay order has been placed by the District Court of Colombo against a special General Meeting of the club that was scheduled to be conducted on March 19, 2016 in order to obtain the approval of the club membership for the project. The stay order is still in place and will remain till January 9, 2017.
In addition to the above action by club members, Wimalasena who is the incumbent secretary of the club has initiated action against Silva and his committee members for significant irregularities and corrupt practices carried out against the interests of the club.
On June 11, 2008 Sri Lanka Survey Department had resurveyed the state land occupied by the club and issued a fresh survey plan 8924 to the club.
However, club president Shammi Silva who is also the Treasurer of Sri Lanka Cricket (SLC) and his committee had sub-divided the land through a private survey for the controversial apartment project.
Wimalasena pointed out that there is no legal provision in Sri Lanka for anyone to carry out an exercise to sub-divide a state land through a private survey.
The section two of the club’s constitution states that it should be a “Private Members” Club established for sports recreation and social amenities. It is quite obvious that the club is not allowed to operate as a business enterprise and the government did not allocate the prime state land to run businesses but for the club’s proclaimed objectives.
The club has been winning domestic championships on a consistent basis in rugby and cricket. It was in the peak of sports activities and also in its reputation as a prominent social club by the time this prime state land was allocated to it, so no one would have had second thoughts about it as the club was obviously one of the most prestigious, if not the most, sports establishment of the country ever since the colonial era.
But things started to change in 2005, when Shammi Silva first became president of the club and told his committee that the club needed urgent remedies to its flagging financial state.
Under the guise of carrying out a gymnasium project, the club built a massive commercial building on the state land. Presently the land houses businesses like a Pub, two night clubs, a Bank, A hairdressing salon, a pharmacy and a retails shop. Additionally, on the land the government had given to the club to promote sports, there is another Karaoke club and an up-market social escort service. Wimalasena said that despite all these commercial ventures, the club was still very much in the red mainly due to the shocking commercial agreements that had been signed with the occupants at unbelievably low rentals for the buildings. A square foot in Colombo 7 usually costs Rs. 150-200 but occupants at Gymkhana premises only pay Rs. 15-20 per square foot according to Wimalasena. He added that most of the occupants strangely were either Silva’s close relatives or friends.
Wimalasena also revealed that the club has defrauded the state in several other ways. He said the club had defrauded around Rs. Six million in VAT (Value Added Tax), NBT (Nation Building Tax) and ESC (Economic Service Charge) which resulted in a recent raid by the Inland Revenue Department. It was preceded by a raid by the excise department which sealed the club’s bar. The club has defaulted land tax to the UDA to the tune of Rs. Eight million while defaulting EPF and ETF dues to the tune of Rs. Six million. (Channaka De Silva)