The Sunday Leader Online - Spotlight Page 1 of 14

24th November 2002 Volume 9, Issue19

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Politics A question of integrity

Issues By Frederica Jansz

Editorial The tenure of the United National Front (UNF) Spotlight government these last 11 months though dotted with a few successful forays has also been riddled with Sports controversy and misjudgment. Chief amongst the latter, is this government's apparent subjugation to former Foreign Business Minister, Lakshmanathan Kadirgamar.

Review The government believed misguidedly that by showering Nutshell attention on Kadirgamar and keeping him happy with all the perks of high ministerial office despite being an Interviews ordinary MP, he would persuade President to be more accommodative towards the Fashion government's peace initiative.

Archives Last week Prime Minister received a resounding slap for his efforts politically, from the suave Kadirgamar who tore the UNF's peace process to shreds.

The UNF government has allocated a sum of Rs. 10 million per annum to pay for security contingents both from the army and Ministerial Security Division to protect the life of the former Foreign Minister as well as provide with state funds 14 vehicles, six telephones and a gamut of other assets at Kadirgamar's disposal.

Projecting himself as a man of the highest integrity and principles, Kadirgamar has on more than one occasion proved he is primarily a politician to whom objectives and principles play second fiddle. The infamous Tawakkal issue is a case in point. The sad saga of 's foremost diplomat Jayantha Dhanapala is yet another.

Now questions have arisen whether Kadirgamar is misusing the security provided to him by the state.

In a damning letter to Messers F. J. & G. de Saram, Mahinda Ellepola, a former close friend and associate of Kadirgamar as well as senior counsel for Aislaby Estates Limited has accused Kadirgamar of abuse of power, with regard to the misuse of security no less, as well as of unseemly conduct not expected from a gentleman. It is pertinent to note here that Kadirgamar's wife, Suganthi Kadirgamar is a senior partner at F. J. & G. de Saram.

The matter came to a head following the Kadirgamars' purchase of a house at Bullers Lane for Rs. 58.5 million. The house at No. 36, Bullers Lane named 'Sweden Bank,' was owned by Aislaby Estates Limited and was previously occupied by the late Mark Bostock, managing director John Keells Holdings Limited.

The house on September 28 this year was to have been purchased and paid for in full by the Kadirgamars. Instead, the former Foreign Minister paid an initial deposit of Rs. 10 million and paid another Rs. 26,500,000 only on October 25. The balance was paid on October 28, a month later.

Ellepola handled the sale of this house on behalf of Aislaby Estates Limited, while F. J. & G. de

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Saram dealt with the legal matters in relation to this purchase on behalf of the Kadirgamars.

The house is being bought in the name of Suganthi Kadirgamar nee (Wijeysuriya). Chamari de Silva, an assistant at F. J. & G. de Saram, attested Deed No: 236 on October 28, 2002. Payments were made through bank cheques issued by Hatton National Bank on behalf of .

When Kadirgamar delayed by one month to make full payment for this house, Ellepola on behalf of his client requested a sum of Rs. 240,625 as interest. This Kadirgamar had originally agreed to pay in the event of a delay. So charges Ellepola.

Kadirgamar however flatly refused to pay this amount stating that it is unconscionable to seek the recovery of interest for one month. Instead, Kadirgamar in a misguided twist, offered to pay a token sum of Rs. 40,000 with a personal cheque as a recognition of the contribution made by the late Mark Bostock to commerce and sports in Sri Lanka.

Ellepola refused to allow this payment advising Kadirgamar not to be patronising and that in any event Bostock had nothing to do with the property in question other than having occupied the same during his tenure as managing director, John Keells Holdings Ltd.

Illegal transaction

Ellepola instead suggested that Kadirgamar pay Rs. 40,625 to his client - while Ellepola personally agreed to pay the balance due Rs. 200,000 to his client as he states his professional integrity was at stake. Aislaby Estates Limited which was founded by the late Mark Bostock continues to belong to his two sisters, who agreed to deduct the balance Rs. 200,000 that was due from Kadirgamar from Ellepola's professional fee.

Kadirgamar in the meantime had also suggested to Ellepola that the stated consideration or value of the house and property be placed at Rs. 40 million and not Rs. 58.5 million so he could thereby save a substantial amount on stamp duty. This suggestion too, Ellepola vetoed, asserting the transaction would then be deemed illegal and improper. This allegation in Ellepola's letter, Kadirgamar has not refuted in writing. Contacted by The Sunday Leader, Ellepola declined to comment on his letter, stating it was a professional communication.

Ellepola further reiterates that after paying an initial deposit of Rs. 10 million, Kadirgamar had inquired if his books and bookshelves could be moved in together with his security staff. Ellepola had clearly stated that the state provides security for his person and not to look after a property he intends to purchase. He further cautioned him that the misuse of his security staff would constitute abuse of power.

Despite this advice, Kadirgamar apart from going ahead and shifting his books and bookshelves to the house, also installed some of his security staff provided for by the state at this house.

(We are producing in full Mahinda Ellepola's letter to F. J. & G. de Saram so there can be no allegations leveled against The Sunday Leader that we are distorting the contents of this damning missive.)

More damning or shocking than this property transaction is the conduct of the UNF government as far as maintaining Lakshman Kadirgamar is concerned.

Apart from continuing to provide an entire contingent of security personnel at state expense to guard the former Foreign Minister, the UNF has also allocated Rs. 10 million from the Treasury solely to maintain Kadirgamar, his security and other capital assets, for this year alone.

The government in fact pays approximately Rs. 12,000 including batta, per soldier every month to guard the former Foreign Minister. Kadirgamar's present security of more than 20 soldiers are provided by the Sri Lanka Army with a separate contingent from the Ministerial Security Division.

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Each time Kadirgamar travels he is preceded by an advance duty guard and a backup vehicle separate from those doing guard duty at the government owned residence at Wijerama Mawatha, 7, where he continues to reside at state expense. Despite the government having removed all road blocks in the city, a road block continues to be in place at Wijerama Mawatha as a protective security measure for Kadirgamar.

According to Mahinda Ellepola the payment of Rs. 10 million for the house at Buller's Lane was also delivered to him by a security officer provided for by the state for his (Kadirgamar's) personal security. Kadirgamar also uses state security to travel to and from the Institute of Commercial Law Practice where he conducts a private legal practice.

Doubtless, Kadirgamar faces a very real threat to his life given that as a Tamil he has both locally and internationally lobbied hard against the LTTE and should be given adequate security. However what is puzzling is why Kadirgamar is allowed to keep 14 vehicles, six telephones and a host of other material assets including his official residence - all at state expense.

The government also foots the bill for the 14 vehicles in Kadirgamar's possession. These include three Mercedes Benz cars of 1998, two Nissan Primera cars of 1998, two bullet proof Mercedes Benz cars, two Mitsubishi Pajero jeeps of 1995, one Nissan vehicle of 1998, one double cab, one Bajaj of 1999 and two motorcycles.

In addition, the state continues to pay for 11 navy drivers retained as security personnel for Kadirgamar and three other civilian drivers. This is in addition to nine telephones Kadirgamar stated he requires, of which six are paid for by the government. Two lines, 673353 and 682692 are paid for by the secretary general of parliament, another two lines, 689775 and 682691 are paid for by the Presidential Secretariat, while another two telephone lines, 676630 and 673867 are paid for by the Defence Ministry.

Budgetary allocations

A cabinet minister of the UNF government in contrast is allocated only two official telephones at his or her residence and two other official telephones at the ministry.

The budgetary allocations to the People's Alliance stalwart earlier this year were divided into two components. Treasury officials said Rs. 5 million has been handed over to the Defence Ministry to spend on recurrent expenses of the former Foreign Minister and another Rs. 5 million for acquisition of capital assets.

In the recent budget for the year 2003 the financial expenditure for Kadirgamar has been halved to Rs. 5 million - for recurrent expenses. There is no allocation for capital expenses.

This Rs. 5 million provision which has been made in the new budgetary estimates will be passed on December 9 when the Defence Ministry votes are taken up.

When asked why the allocation for Kadirgamar has been halved for next year, Treasury officials laughed stating, "It has probably been cut down because his capital requirements are over."

This issue however, is far from funny. Apart from these ludicrous expenses to maintain Kadirgamar who is after all at present, merely a member of parliament, Prime Minister Ranil Wickremesinghe's Secretary, Bradman Weerakoon in January this year visited Kadirgamar's official residence at Wijerama Mawatha and agreed that several items purchased by the state during his tenure as foreign minister which includes a conference table, a satellite multi channel receiving system and a hi-fi sound system remain there.

All this while the present Foreign Minister was deprived of vehicles and office furniture as a result of Kadirgamar continuing to function in his former capacity - enjoying official perks - of that of Sri Lanka's foreign minister.

In fact the government has had to separately fork out Rs. 25 million to purchase another two jeeps and three cars for the official use of Tyronne Fernando as well as another Rs. 5 million to http://www.thesundayleader.lk/20021124/spotlight.htm 11/24/02 The Sunday Leader Online - Spotlight Page 4 of 14

purchase new office equipment for the present foreign minister.

In a letter to Secretary, Finance Ministry, Charitha Ratwatte on January 24 this year, Secretary, Foreign Ministry, G. Wijayasiri and Director General Administration, Foreign Ministry, C. S. Poolokasingham, wrote requesting for the above Rs. 25 million in order to facilitate the administration of the present Foreign Minister Tyronne Fernando and his staff.

The government also has to incur an additional expense and renovate another official residence at Gregory's Road that will accommodate the present foreign minister as a result of Kadirgamar not budging from the official residence of the foreign minister.

In fact, due to Prime Minister Ranil Wickremesinghe cradling the former foreign minister, the duties of the present foreign minister has been seriously compromised. Kadirgamar has in fact in writing to the Premier outlined the UNF government's commitment to maintain his present level of security.

Kadirgamar asserts that this government's commitment to maintain his present status would be the payment for required fuel and maintenance of 14 vehicles, payment of batta for 11 navy drivers, payment of overtime and batta for three civilian drivers, payment of water and electricity bills as well as payment of bills for the telephones used by the security personnel.

Luxurious lifestyle

In addition, Kadirgamar asserts the government must pay for the maintenance and repairs of the security lighting system, maintenance and repairs and supply of fuel for two generators, maintenance and repairs of the internal telephone system of security personnel and maintenance and repairs of ancillary equipment already in the building which includes air conditioners, solar heating, TV antennae, computers, fax machine and photocopier. The government is even paying for the maintenance of the garden and house in which Kadirgamar continues to reside.

It is these payments that the Foreign Ministry refused to pay after Kadirgamar was voted out of office. The Prime Minister however designated the task to the Defence Ministry and as a result, it has been granted the necessary financial allotments from the Treasury to maintain Kadirgamar in a luxurious and elaborate lifestyle which even cabinet ministers of the present government are not privileged enough to enjoy.

Wickremesinghe's reasoning as far as Kadirgamar is concerned, is of course deeply appreciated by the former minister. In a letter to the Premier, Kadirgamar writes, "Allow me to say Prime Minister, that I deeply appreciate your expressed concern for my security."

And despite the purchase of a house down Bullers Lane, Kadirgamar is not about to shift anytime soon and bear the expenses. Even though the security will be provided free.

Attorney Ellepola's damning letter

Messrs. F. J. & G. de Saram

Attorneys at law

No. 216, de Saram Place,

Colombo 10.

RESIGTERED POST

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Dear Sirs,

Sale of house called Sweden Bank on Buller's Lane, Colombo 7.

Having received your letter of 25 instant, by facsimile, I now respond thereto. I did not want any matter to intervene as would cause any delay in the sale of the above property. Further my client had instructed me on the matter in issue, following on your client having sought the intervention of a businessman who figured prominently in a recent seedy transaction.

You would have observed and noted, that in the correspondence, with you, nowhere did I refer to your client's husband by name. Before I deal with the distorted placement of facts by Mr. Lakshmanathan Kadirgamar in the instructions given by him to you, it is relevant that I quote to you one of his letters to me, which demonstrates the closeness of the association he has had with me.

"My dear Mahinda,

As the saga has finally ended it is time for me to express my gratitude to you for all the work you have done over the case, in particular for your sound advice and your tactful handling of the matter. You took a great burden off my shoulders. Yet again you have come to my aid at an important juncture of my life. I am truly and deeply grateful to you. I cannot say more.

Sincerely

Lakshman "

I have known Mr. Kadirgamar from the mid 1940's and not at all flattered with his patronising attitude. He was and is a self-centered individual concerned only in his personal glory, to achieving some of which I too supported. He is quick to forget people when he considers they are no longer of use to him. Promises of support for education of a child consequent on the death of another child in such family caused by a member of his (Mr. Kadirgamar's) family have all been forgotten. A cold individual. He never was and is not a TEAM MAN.

Reverting to your letter, let me tell you, he is not the gentleman he has tried to make out himself to be with a halo over his head. He is a politician to whom what matters is OBJECTIVES not PRINCIPLES.

Mr. Kadirgamar has been in communication with me on the purchase of a house from 28 September, 2002. He was looking to me to attend to the legal matters, for I assisted him in the purchase and the sale of premises No. 23 Anderson Road, Colombo 00500 and the purchase of premises No. 3/3, Havelock Road, Colombo 5. I told him, I do not want to have a conflict of interest and in any event he would have no legal expenses since his wife is a member of your firm.

For Mr. Kadirgamar to state that the payment of the sum of Rs. 240,625.00 was for a notional loss of income of five days, is ludicrous. Please see my letter of 3rd instant to your client in the instant correspondence. It took him one week to pay the deposit of Rs. 10 million. It was delivered to me by a security personnel provided by the state for his personal security. On the 3rd instant, when he spoke to me, he was confident that he would complete the purchase in the following week (7th to 12th instant). I had to correct him on your capacity to fulfill such target. His contention of the ability to complete the purchase in the aforementioned week was but a ploy for delay and not to pay the deposit.

On the deposit of Rs. 10 million, he inquired whether upon his books and bookshelves being moved in, I could permit his security staff to move in. I clearly stated, the state provides security for his PERSON and not to look after property he intends to purchase. I cautioned

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him that the misuse of his security staff would constitute ABUSE OF POWER but I had no objection to a private security service being deployed.

Both Mr. and Mrs. Kadirgamar have abused the confidence I reposed in them, for apart from the books and bookshelves being moved in, domestic household furniture has been moved in and the security staff provided by the state installed therein. - The conduct of a Lady and Gentleman.

There is another matter you compel me to allude to. The draft of the Deed of Transfer transmitted on 14th instant, did not have stated therein the consideration of Rs. 48,500,000.00. I incorporated the same and called for another draft with this and other corrections. Your client calls me to inquire whether the stated consideration could not be Rs. 40 million, for then he would have the benefit of a substantial saving of the stamp duty payable. I refused to accede to it and stated that now the stamp duty is not payable prior to the execution of the Deed, and could be paid within one week of the execution of the Deed to the People's Bank to the credit of the Western Provincial Council.

I reiterate, your client Mr. Kadirgamar agreed to pay the sum of Rs. 240,625.00 for the delay was one month. I quote his words of the acknowledgment to pay such sum. "Well, I quite understand. They are hardheaded businessmen. I will have to manage it somehow" (The tone of his voice rings in my ears.) I confirmed it to my client and thereafter to you. On the 23rd evening Mr. Kadirgamar had called, in my absence. I returned the call on the 24th morning. On my inquiry on the purport of his call he stated "I don't recall what it is about but everything should be in place for the 28th." Later on in the day he called with his contention that the delay was five days, it is unconscionable to seek the recovery of interest for one month and that he would pay a token sum of Rs. 40,000-00 with his personal cheque as a recognition of the contribution made by the late Mr. Mark Bostock to commerce and sports in Sri Lanka. I advised him not to be patronising and in any event Mr. Bostock had nothing to do with the property other than having occupied the same during his tenure of managing director of the owner company. I was not under any circumstances prepared to prejudice my client and suggested to him to pay Rs. 40,625-00, to which he agreed. I called the client and informed him of the change and that the shortfall of Rs. 200,000-00 would be met by me personally, for my professional integrity was at stake. This payment was to be made in your presence at the execution of the Deed of Transfer. The director stated that it could be deducted from the fees payable to me. I rejected such course for then my professional fees would not be correctly reflected.

On the 26th instant I had a telephone call from one of the directors, stating events and conversations that had taken place, which reflects another character of Mr. Kadirgamar of "Heads I WIN tails you LOSE." Here emerged the businessman in the seedy transaction. It is now a common factor throughout the world, that politicians have their arms over the shoulders of businessmen. It is now also common for businessmen to extend their patronage to politicians, as the story your client related to me of the chairman of a finance company recommending to the other members of the board of directors a loan to a minister who did not make money whilst in office.

The son of the first president of the Central YOUNG MEN'S CHRISTIAN ASSOCIATION and THE LAW SOCIETY OF CEYLON came into politics with much expected of him by persons with a sense of moral and ethical values. He has failed them and the family and joined the queue.

Yours faithfully,

Mahinda Ellepola

From the PM with luck

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At state expense. The vehicles and items not returned by Lakshman Kadirgamar, former Foreign Minister.

Vehicles

02 Bullet proof Benz cars

03 Benz cars

02 Nissan Premera cars

02 Mitsubishi Pajero jeeps

01 Nissan sunny car

01 Double cab

01 Three wheeler

02 Motorcycles.

Cell phones

02 cellular phones

Computers

04 IBM computers

01 Dell computer

04 HP laser jet printer

01 Epson colour printer

01 scanner

Other main equipment

01 Sony colour TV 41 inches

01 Stereo music system with 6 speakers

01 Thompson set up

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01 Satellite receiver

01 Sony video deck

01 Pioneer VCD/CD player

01 Pioneer audio video multi channel receiver

01 Gestetner photocopier

01 Canon photocopier

Office Furniture

A large number of office and other equipment such as tables, chairs, conference tables, fans, cupboards, racks etc., issued to the former foreign minister's room and bureau other than those issued to his residence.

"Wild allegations" - Kadirgamar

Former Foreign Minister, Lakshman Kadirgamar admitted that his close friend Mahinda Ellepola "wrote a very nasty letter to our lawyers making a lot of wild allegations against me."

He asserted that he purchased the house at Buller's Lane for Rs. 48 million and not Rs. 58 million - he said he got the money after selling his former residence at Havelock Road - and has put his wife's property also on the market. "We have also taken a huge loan - which my wife will pay over the next 10 to 15 years as she is young enough to continue working and is of course a senior partner at F. J. & G. de Saram's - as far as I am concerned my earning capacity is over," Kadirgamar said.

Kadirgamar admitted he offered Rs. 40,000 as a token towards the memory of Mark Bostock and his contribution to sports and commerce in Sri Lanka after Ellepola demanded he pay over Rs. 200, 000 as interest against the delay over making final payment to the seller. "The delay was only a matter of five days and no more, - it was unconscionable that he demands over Rs. 200, 000 as interest," Kadirgamar asserted.

Kadirgamar maintained he continues to live at the government's official residence at Wijerama Mawatha after Prime Minister Ranil Wickremesinghe, a day after last year's election ordered that he should remain there together with a full complement of security personnel both from the army and the Ministerial Security Division (MSD).

Kadirgamar denied he is abusing state security by ordering them to do private work. He asserted that even while he was minister, security personnel from the MSD guarded his private residence as well. This time around too, he asserted on the orders of the Premier his new private residence at Buller's Lane is being guarded by officers from the MSD.

He maintained that he has not solicited any favours or special privileges from the Prime Minister. "That is entirely the Premiers business - I did not solicit anything - the Prime Minister on December 6th, even before all the election results were out telephoned me and said, I am calling to say your security must remain exactly as it is and you must stay where you are - I had no part to play in it at all," Kadirgamar claimed.

Asked why the PM chose to grant special privileges to him only, Kadirgamar responded

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saying, "I assume my life is in danger - I am no longer privy to intelligence reports - however the PM must know something and that is why he decided to maintain me in this manner."

Kadirgamar further recounted what the late leader of the TULF, Sivasithambaram said when he came back to parliament in January this year. "The first and only thing he said to me when I greeted him was, 'I don't want to alarm you but I have information that you are still very much a target."'

"He must have known something, that the Premier is also now privy to," Kadirgamar said, explaining why this government continues to maintain him at state expense in the same manner as that of a foreign minister of Sri Lanka.

De Saram's on interest payment

On October 25 this year, F. J. & G de Saram wrote to Mahinda Ellepola stating his request that Lakshman Kadirgamar pay a notional loss of Rs. 240,625 as interest for the postponement of full payment for the house in question is unwarranted.

The letter was written before Ellepola responded with a damning reply questioning the integrity of Kadirgamar. In this letter, lawyers appearing on behalf of the Kadirgamars' assert that the delay in final execution of the deed was a matter of only five days and therefore Ellepola cannot demand one month's interest from their client - Lakshman Kadirgamar.

The law firm nor Kadirgamar have responded to Ellepola's last missive where he has in detail outlined the various irregularities involved in the transaction and sale of the house called 'Sweden Bank' at Buller's Lane, Colombo 7, including an allegation that a request was made to understate the sale price to avoid paying the full stamp duty.

Shady deals that bounced Pramuka

By Frederica Jansz

MILLIONS of rupees misapp-ropriated by Chairman and Founder, Pramuka Savings & Development Bank, Rohan Perera has resulted in the Central Bank ordering the closure of the bank following damning evidence that the bank from its birth on July 17,1997 has been straddled with financial fraud.

An investigation by The Sunday Leader has found irrefutable evidence supplied to the Central Bank which proves that Perera has illegally and unethically financed friends and associates which has now finally resulted in the closure of Pramuka Bank.

Property for shares

To begin with, Pramuka Bank in 1997 violated Central Bank stipulations and accepted property in exchange for shares at the bank. This transaction, authorised by Chairman Rohan Perera, allowed even his former Personal Assistant and Assistant General Manager, Pramuka Bank, Arjuna Dissanayake to offer 213.25 perches of land situated at Walala, Kandy in exchange for shares at the bank.

The property in 1997 was valued by Ridley Peiris at a market value of Rs. 5.3 million at the rate of Rs. 25,000 per perch. Peiris incidentally is a relation of Rohan Perera. Ridley Peiris was previously removed from Seylan Bank's panel of valuers in 1996 for having submitted inflated valuation reports.

Arjuna Dissanayake meantime was paid Rs. 5.3 million for his land of 213.25 perches at Walala,

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