More foreign investors may be confronted by corruption dilemma
The recent incident where President Maithripala Sirisena’s Chief of Staff, Dr I.H.K. Mahanama and Chairman of the State Timber Corporation P. Dissanayake were arrested and remanded on the charges of soliciting a bribe of Rs. 20 million from an Indian investor, not only made headlines but has become the talking point within many sections of the society. The businessman, who had purchased a block of land at the Kantale Sugar Factory, had wanted to purchase machinery and building space to commence operating the factory.
Then, the suspects had allegedly solicited a bribe of Rs.540 million from the businessman promising that they would provide him with the approval needed to obtain the machinery and building space for the purpose. However, after negotiations were held between the two parties, it was said to have decided to reduce this bribe to Rs.100 million. The two officials were to receive a bribe of Rs. 100 million, but they were allegedly caught red-handed while accepting Rs. 20 million as an advance payment.
The investor has said in a statement to the Bribery Commission that Dr. Mahanama again demanded US $ 3 million in May 2017. The payment was to be made at the car park of a restaurant in Wattala. On September 2017, State Timber Corporation Chairman P. Dissanayake also allegedly approached the investor and demanded a bribe during a meeting at a luxury hotel
The alleged incident can be viewed in two ways. One is that the Good Governance is plagued by bribery or corruption. The other is the question as to how these types of actions would adversely affect investors who wish to invest in Sri Lanka?
A query also needs to be raised as to how these types of suspected unscrupulous state officials like Mahanama and Dissanayake managed to survive while serving in top administrative ranks.
Let’s first start with the history of Mahanama allegedly attempting to take a bribe from the Kantale sugar investor.
Long history of attempted extortion
The proposal to recommence the operations at the Kantale Sugar Factory was first brought forward in 2006 during the Mahinda Rajapaksa regime. Subsequently, international bids were called for in 2010 to find a suitable investor for the project.
One of the most powerful secretaries under the Rajapaksa administration attempted to ensure that an investor, who was the third in the list, was suitable to receive the tender. The tender was given to him. Due to the controversy which transpired after details were exposed, the deal was shelved.
On February 14, 2015, a month after the Good Governance assumed power, the approval to recommence operations at the Kantale Sugar Factory was given. This was to be one of the first large scale Foreign Direct Investments under the administration. The selected investor received the green light by the Cabinet Committee on Economic Management (CCEM) and by the Cabinet on June 17, 2015. Accordingly, an agreement was signed between M G Sugars Lanka (Pvt) Ltd and the Board of Investment (BOI). One of the conditions of the agreement was that MG Sugar must deposit US $ 10 million with the Sri Lankan Government and on August 08, 2015 the company met the requirement.
However, the Ministry of Lands kept on delaying what was to be done on its part. It placed many hurdles to prevent the investment from taking place. Dr I.H.K. Mahanama, who was the then secretary to the Ministry of Lands, said to have informed the investor that he could prevent the delays from the AG’s Department and that nothing could be done without his approval.
The Minister of Lands at that time was M. K. A. D. S. Gunawardana. He represented Trincomalee District and wanted to develop Kantale, which is a part of Trincomalee District. However, the Minister, who passed away on January 2016, was replaced by John Amaratunga, who had a lot on his plate. Taking advantage of the lack of interest on the part of the Minister, Dr. Mahanama has allegedly administrated the Ministry according to his wishes.
He is said to have informed the investor that he needed US $ 3 million to ensure that the deal went through. However, at this point the investor had in fact deposited US $ 10 million with the Government.
The head of the BOI then was Upul Jayasuriya. He had said that although he approved investments, the Secretary to the Ministry of Lands, Dr. Mahanama and Secretary to the Ministry of Power, Suren Batagoda placed constant obstacles, which delayed the investments. After this revelation, Prime Minister Ranil Wickremesinghe and Minister of Development Strategies and International Trade, Malik Samarawickrama made life difficult for Jayasuriya, which eventually led to his resignation.
The investor has said in a statement to the Bribery Commission that Dr. Mahanama again demanded US $ 3 million in May 2017. The payment was to be made at the car park of a restaurant in Wattala. According to the statement, on September 2017, State Timber Corporation Chairman P. Dissanayake also has allegedly approached the investor and demanded a bribe during a meeting at a luxury hotel. Between October 2017 and February 2018 Mahanama and Dissanayake had demanded a bribe from the investor on four separate occasions and threatened that they wouldn’t allow the project to take place unless the bribe is paid (The meeting place was the chairman’s office at State Timber Cooperation).
At this point Mahanama had allegedly threatened the investor that unless he received his bribe, he would retake the land earmarked for sugar cane planting. By this time, the investor had brought his British and South African partners to Sri Lanka.
Bribery Commission approached
Thinking that he had no other choice, the investor approached the Bribery Commission in February 2018. According to what has been revealed, Dr. Mahanama is said to have told the investor that he had to take a bribe because he would have no income after his retirement. Mahanama has claimed that he had planned to construct a building near the University of Kelaniya and rent it out.
Dissanayake, was also the Secretary to former President Chandrika Kumarakunga.
However, the irony was that the two men didn’t know that the investor had already lodged a complaint with the Bribery Commission following the initial threats and accordingly, the Bribery Commission officials had been keeping an eye on this case for a while.
Speaking to the Daily Mirror, Executive Director of Centre for Human Rights (CHR) and Campaign for Free and Fair Elections (CaFFE) Keerthi Tennakoon, said that he had received information regarding this case in early 2016 and had exposed this on various occasions using the platform of Anti Corruption Front and the Centre for Human Rights.
CHR Executive Director Tennakoon said that this Indian national is a businessman who had been working in Sri Lanka since 1994 and was well connected.
Negative impact on investors
There is a negative impact on investors who wish to invest in Sri Lanka following the news of this incident. Tennakoon said that this incident is a huge blow on investors who are hoping to invest in Sri Lanka.
“Now, investors would not think twice, but thrice before they arrive in Sri Lanka. They would show little interest to invest in Sri Lanka. It is not easy to restore credibility once lost. Hence, the Government should look into this matter seriously and not be hesitant to take effective steps to win the hearts of investors,” Tennakoon opined.
He said that the Indian businessman is receiving deaths threats and he is not safe at this stage. Therefore, the BOI should take strict measure for his safety.
‘Good name tarnished’-Dr.Mahanamahewa
Meanwhile, Colombo University Law Faculty Senior Lecturer and Former Human Rights Commissioner Dr. Prathiba Mahanamahewa told Daily Mirror that this incident had tarnished the good name of the country.
“This is an action of contravention. This act would have direct impact on the investors. Both the President and Prime Minister have kept Sri Lanka on false pedestal during their official visits to foreign countries and extended invitations to these officials to invest in Sri Lanka, showcasing the island as a peaceful country. But now according to what has transpired, the investors are in a two minds whether to come to Sri Lanka. This would vastly affect the country’s economy,” Dr. Mahanamahewa warned.
“When thinking about as to how these alleged state officials survived while serving in top ranks, it seems that the Government has been maintaining a zero-tolerance policy with regard to bribery cases. If the Government had carried out formal investigations against such alleged individuals, these types of wrongdoings would have been nipped in the bud,” Dr. Mahanamahewa added.
He added that the setting up of High Courts would not be sufficient in order to solve cases like these and added that the Protection of Victims of Crime and Witnesses Act should be amended.
He further suggested that if bribery is to be eradicated from the society, the seeds for such a purpose should be strewn at the school level. He said that students must be educated regarding the gravity of a bribe.
“Culprits associated with bribery cases should be blacklisted and exposed to the general public,” he added.
Now, investors would not think twice, but thrice before they arrive in Sri Lanka. They would show little interest to invest in Sri Lanka.
Government’s stance on the issue
Nobody likes to apply cinder on his or her face. It is certain that no one in the Government dares to criticize the incidents that occur within the regime. But let’s see what the Government’s stance on this is.
Speaking to the Daily Mirror, Minister of Public Administration and Management and Law and Order Ranjith Madduma Bandara said that this is an incident which had showed that the law is applicable to anybody.
“Unlike the previous regime, our Government is treating everyone equally irrespective of position and possession. The ambition of this Government is to form a country which is against bribery and corruption,” Madduma Bandara said.
“During the previous regime, if anybody went against the Rajapaksas, he or she was abducted or killed. No investigations were carried out against the alleged officials then. But, we have been able to conduct a transparent investigation into this recent incident and bring the wrongdoers to book,” Minister Madduma Bandara affirmed.
Repeated complaints against Mahanama
“The point to consider is how Mahanama became the Chief of Staff of the President when there were allegations levelled against him. A number of other organisations and I have repeatedly complained against Mahanama and raised concerns about his behaviour. However, despite all this, he was appointed as the President’s Chief of Staff. I have also raised concerns about seven other state officials, but there have been no investigations against them. This makes the public desperate in watching the activities of the Government. These happenings can only benefit the Rajapaksas,” Executive Director of Centre for Human Rights (CHR) and Campaign for Free and Fair Elections (CaFFE) Keerthi Tennakoon said.
“We have been so democratic that we were able to bring even Prime Minister Ranil Wickremesinghe to the Presidential Commission of Inquiry in connection with the alleged bond scam that took place in the Central Bank,” the Minister added. These types of questionable actions can’t be accepted. The culprits should be perpetrated under the law following a proper investigation. At the same time, the Government must be commended for taking the initiative to unearth these incidents and act independently, in a democratic manner. On the other hand, the Government should take remedial measures to prevent such incidents from happening again.