Privatisation (Volume IV)


  • IMF, World Bank & ADB Agenda On
  • Privatisation (Volume IV)
  • Sri Lanka Insurance Privatisation
  • Annulled as unlawful & illegal by Supreme Court handled by PricewaterhouseCoopers & Ernst & Young, Chartered Accountants
  • By Nihal Sri Ameresekere
  • Published: April, 2011
  • Format: Perfect Bound Softcover(B/W)
  • Pages: 588
  • Size: 8.25×11
  • ISBN: 9781456778088
  • Our Price : $84.00 ($64.00 + Shipping $20.00)

IMF, World Bank & ADB Agenda On Privatisation (Volume IV)

Annulled as unlawful & illegal by Supreme Court handled by PricewaterhouseCoopers & Ernst & Young, Chartered Accountants

This shockingly explosive Book deals with the manipulative privatization of Sri Lanka Insurance, under a privatization program, pushed by IMF, World Bank and ADB; questionably mishandled by PricewaterhouseCoopers and Ernst & Young, contravening governmental procedures and professional standards; involving a consortium of leading corporates, controlled by one individual, portrayed as a close associate of former US President Bill Clinton. This dubious deal was annulled as wrongful, unlawful and illegal by the Supreme Court, the highest judiciary, observing that it `shocked the conscience of Court’, asserting that public assets are held in trust on behalf of the people. This Book exposes those holding elected and selected influential and powerful public office unabashedly compromising national and public interests, in the disposal of an invaluable national asset, at a ridiculous price, to parties, who had not even been pre-qualified, with one party incorporated in Gibraltar after the completion of the process, and whose source of funds channeled through a leading Bank remained a mystery. This Book appallingly reveals how pontificating professionals retrospectively manipulated the financials of Sri Lanka Insurance, facilitating a fraudulent demand for a refund from the Government. It reveals the unashamed condoning of fraud and corruption, and bestowing on corrupt miscreants even more recognition, shunning the `rule of law’; and the absence of law and the duplicitous stances of the Chamber of Commerce and the Institute of Chartered Accountants. This book is an `eye opener’ on socio-political realities, and is invaluable to those dealing with privatization, public finance and commerce, fraud and corruption, forensic accounting, and to legal academics and professionals, and public interest activists.

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President Chandrika Bandaranaike Kumaratunga kept her word, and never did she interfere in the work I performed, as Chairman, Public Enterprises Reform Commission. On the contrary, she endorsed and complimented my actions. When I tendered my resignation in November 2005, as Chairman, Public Enterprises Reform Commission, in the circumstances of her respecting a Supreme Court Ruling, having had to prematurely vacate Office, as President of Sri Lanka, in November 2005, in her Letter of acceptance of my resignation she stated thus – ‘I take this opportunity to place on record my appreciation of the tremendous amount of work done by you as Chairman, PERC, during your short tenure of office. I thank you for rendering an excellent and professional service in finalizing a large number of complex assignments coming within the purview of PERC’

I, as former Chairman, Public Enterprises Reform Commission, who had dealt with the post privatization issues during 2004/2005 pertaining to the privatization of Sri Lanka Insurance Corporation Ltd., and other public officers, who had been involved with the privatization of Sri Lanka Insurance Corporation Ltd., and the sale in April 2003 of its Shares to the Consortium led by Distilleries Co. of Sri Lanka Ltd., were summoned to be examined by the Sub-Committee of the Parliamentary Committee on Public Enterprise.  

‘Extract’ from Report to Parliament

“Ernst & Young Auditors and PWC Consultants were directly involved in the said fraudulent conduct.”

‘Extracts’ from the Supreme Court Judgment

“It is sufficient to say that the conscience of this Court is shocked by the manner in which the senior public officers had handled the sale of a pivotal asset of the state, which belongs, to the people of this country.”

When a new foreign company brings foreign funds into the country for a transaction with the Government relating to Government property, it is necessary to ascertain the details of the beneficial ownership of such foreign money. This is necessary to ensure that the bringing of such money does not contravene any domestic law or foreign law and that the acceptance of such money by the Government is not a contravention of any international obligation of the State. The beneficial owner of the money brought into the country by Greenfield Pacific Ltd is concealed behind a series of corporate veils, thereby making it difficult to ascertain the real beneficial owner of such money.

The 24th to 21st respondents have submitted that Milford Holdings is a company formed by and owned by three parties which figured in the Distilleries Consortium. Greenfield Pacific EM Holdings Ltd is a total stranger. There is only one contract and when it is void due to illegality the whole contract is null and void. I accordingly hold and declare that the Share Sale and Purchase Agreement executed by the 5th respondent Acting Secretary to the Treasury on behalf of the Government of Sri Lanka and by Milford Holdings (Pvt) Ltd and Greenfield Pacific EM Holdings on 11.4.2003 was and is illegal and null and void ab initio. “

Curiously, the provisions of the Offences Against Public Property Act No. 12 of 1982, had been conveniently ignored, revealing that such law is enforced only against the hapless poor, and perhaps in instances of political expediency.

This potent Statute to protect public property provides for a 300% fine and imprisonment up to 20 years, even for an attempt of mischief to and/or theft of and/or robbery of and/or misappropriation and/or criminal breach of trust of public property, and/or cheating and/or forgery and/or falsification in relation to public property. Let alone that the main transaction was annulled, as illegal by the highest judiciary, there was disclosure that an attempt had been made by the Distilleries Consortium to fraudulently obtain Rs. 2,059 Million from the State of public monies, by retrospectively unauthorizedly re-classifying and/or falsifying the Annual Accounts of the Sri Lanka Insurance Corporation Ltd.  If proven guilty in Criminal Courts, then the fine would be 3 times i.e. Rs. 6,177 Million. Clearly, the Government of Sri Lanka and its law enforcement authorities did not and/or could not enforce the law, raising the question why ?

The US Secretary of State and former first Lady Hilary Clinton sent an Independence Day message to Sri Lanka on 4th February 2011, hoping for a ‘just and democratic Sri Lanka’. Harry Jayawardena, who headed the Distilleries Consortium, which acquired the Sri Lanka Insurance Corporation Ltd., which was annulled by the Supreme Court, as illegal, had been portrayed in the media, as a close associate of former US President Bill Clinton.  

With sheer disrespect to the highest judiciary of the country, worst still was the appointed Milinda Moragoda, as Minister of Justice, who was portrayed in the media to be fraternizing in such official capacity, with the new Chief Justice, J.A.N. De Silva and other senior members of the judiciary.

Vasudeva Nanayakkara visited me subsequently, and was visibly very disturbed about the foregoing. I believe this was since he won at the General Elections of April 2010 upon the nationwide credibility he had gained by being the Petitioner in both the above Supreme Court Fundamental Rights Applications, which restored to the people, the defrauded public properties of colossal values.

I amusingly told him that it was a big ‘tragi-comedy’, revealing the reality of the pathetic plight of the hapless poor of our country; the very large segment of society, that he right throughout his political career, had represented.

The ‘Core Values’ of The Ceylon Chamber of Commerce, include maintaining the highest ethical standards and promoting good corporate governance in the public interest. The Ceylon Chamber of Commerce have published booklets of its standards on ‘Corporate Governance’, ‘Business Ethics’ and ‘Transparent Disclosure Through Accounting Standards’.

Given such ‘Core Values’, The Ceylon Chamber of Commerce, publicly held out, that they were committed and bound to ensuring, in the public interest, good corporate governance, with transparency, disclosure and accountability, and the practice of  the highest standards in business ethics, particularly by and among its Members.