BUSINESS TIMES ON SUNDAY 5 Sunday December 27, 2009 YEAR-ENDER

January YEAR IN REVIEW and Avissawella. These companies have already in- Petroleum import costs fall formed the Labour Commissioner that they had no sharply in 1H09 Government unveils economic alternative other than to reduce staff to face the he total expenditure on petroleum imports fell by stimulus package economic crisis, politicians and labour union lead- T52.6% during the first half of 2009 to US$866 ers said. million compared to US$1,825 million spend in the he government un- same 2008 period, according to the External Sector Tveiled an economic June Performance for June 2009 released by the Central stimulus package aimed Bank (CB). at revitalizing several key THE GOOD, FR case filed on oil hedging deals Top investor Jim Rogers visits Sri Lanka industries including tea, fresh fundamen- rubber, cinnamon, appa- Atal rights petition ell-known investor rel, leather, tourism and was filed on the oil WJim Rogers, who construction. In a news- hedging crisis this founded the Quantum Fund paper advertisement the Thursday seeking an with billionaire investor government outlined its THE BAD AND interim order from George Soros, was in Sri plan, drawn up by a presidential task force on eco- the Supreme Court to Lanka on a ‘quiet’ 3-day trip nomic development. restrain the Ceylon which included meetings Leade Editor Gunned Down Petroleum Corpora- with top government offi- tion (CPC) and the cials. unday Leader Editor Lasan- Treasury Secretary Stha Wickrematunga was THE UGLY from participating in September gunned down in broad daylight any arbitration pro- on January 8th and succum- The following is a summary of the main business and economic ceedings or litigation Top UN official expelled bed to his injuries after being developments for the year with a few other key developments: with any of the banks he government ordered James Elder, a senior of- taken to hospital. An investi- involved in the hedg- Tficial with the United Nations Children’s Fund gation into his murder is still ing contracts until a final determination is made on (UNICEF) to leave Sri Lanka. A UN official said no ongoing. stones, witnesses said. The depositors said they April the application. The petitioner, public interest acti- formal reason had been given for the move by the MTV/MBC Studio attacked had been promised an appointment with Mr. Kotela- vist Nihal Sri Ameresekere filed a petition in May Sri Lankan government. However, Foreign Office wala to discuss their plight but when they turned 2009 on the hedging issue in the Supreme Court sources, who did not wish to be identified, said the he MTV/MBC Studio in Pannipitiya up, the Ceylinco Chairman and none of the directors but in this week’s petition says that he was only Government was concerned over repeated remarks Twas attacked where reports of were present in the office. This angered the group aware of the intentions of the banks, namely Citi- he had made to the media about Internally Dis- claymore mines were found in the who pelted stones at the office on Duplication bank, Deutsche Bank and Standard Chartered Bank, placed People (IDPs) in particular the conditions of wreckage. Road. to enter into arbitration or litigation after the May children in camps. Golden Key Auditor remanded application was filed. March F&G depositors allowed to he Golden Key Credit Card Co auditor was re- Tmanded by the Mount Lavinia Chief Magistrate proceed with FR case while all the directors in the company, including he fundamental rights Ceylinco Chairman Lalith Kotelawala, were ordered UN call for pause in Tpetition filed by the Fi- to give statements to the police. fighting rejected nance & Guarantee (F&G) Govt.says nine journalists Depositors Association United Nations move for a pause in the was given leave to pro- killed since 2006 Afighting in the northern Wanni battle ceed in the Supreme midst the alarming in- zone – a prelude to a sea-based evacua- Court. The case was first Acrease in attacks tion operation of trapped civilians – was filed by the Association on 27 April 2009 in an against the media in the met with stiff opposition from the attempt to get their money from the troubled country, Parliament was told More arrests in Golden Key case Government. Ceylinco company through court interven- that nine journalists have ore arrests are expected to be made over Economic woes mount tion and a Central Bank (CB) moni- been killed, 27 assaulted and another five abducted Mcriminal misappropriation of funds of the tored payment plan. Depositors say since January 1, 2006. Golden Key (GK) Company after the fraud case took as war winds down most interest payments stopped in De- Golden Key depositors storm a different turn with the detention of powerful Cey- overnment troops are cember 2008 and January 2009. linco Chairman Lalith Kotelawala. Mr. Kotelawala closing in on the last rem- company headquarters G SLIC privatization annulled, was remanded by the Mount Lavinia Chief Magis- nants of Tamil Tiger resistance in PBJ returns to public office he crisis of the collapsed trate Harsha Sethuga while an open warrant was northern Sri Lanka as an upsurge reverts to state TGolden Key Credit Card issued for the arrest of his wife, Sicile who has of more than two years of fight- day after the ormer Treasury Secretary P.B. Jaya- Company reached a new high been in Singapore since the inception of the case. ing winds down but the coun- ASupreme Court Fsundera was cleared by the Supreme when hundreds of angry de- The Magistrate rejected the medical certificate try's economic woes aren't over annulled the privati- Court to return to public office. positors staged another mas- submitted on behalf of Mrs Kotelawala. The Attor- yet as revenues and a shortage of zation of Sri LankaIn- sive protest in front of the ney General (AG)’s Department sources said the cash continue to plague the govern- surance Corporation October company’s head office at Du- CID has been instructed to carry out in-depth inves- ment. (SLIC) over a fraudu- Vote on Account, no Budget plication Road and tigations into GK affairs to arrest all those involved All directors of GK companies lent deal, the Fi- forced themselves into the of- in misappropriation of public money. nance Ministry took over he government announced it would restricted from overseas travel fice. They stormed into the of- Trouble for Ceylinco Group finance firms the management and con- Tpresent a vote-on-account instead of fice and demanded officers to ore than two dozen directors of the failed trol of the company and a budget in view of pending parliamen- refund their deposits or to give a date of repayment. epositors at Ceylinco finance companies have MGolden Key and its affiliated companies were said the SLIC will continue tary elections. They also chanted slogans against Golden Key Dbeen flooding the phone lines with complaints restricted from traveling overseas by the Mount its operations under the ex- Average turnout at Southern management including Chairman Ceylinco Consoli- of late interest payments, no interest payments al- Lavinia Chief Magistrate Harsha Setunga when the isting management headed dated Lalith Kotelawela while pasting and display- together and several difficulties in getting their cap- Golden Key (GK) misappropriation case was taken by the Chief Executive Offi- polls ing posters and placards carrying slogans accusing ital back. up. cer. he Southern Provincial Council polls the directors of fraud and mismanagement. JKH cleared: No violation of CCC Code No halt in operations: Gotabhaya Tended amid an average voter turnout Call for realistic exchange rates July and large-scale violations of the election laws, offi- he main committee of the Ceylon Chamber of he Government strong- cials and observers said. usiness leaders in key local exporting industries TCommerce (CCC) on Thursday by a narrow 1- Tly rebutted claims by ‘Small Miracle’ puts Tourism Bsuch as apparel and tea said they are facing se- vote margin decided that John Keells Holdings Indian leaders that Sri Ministry in muddle vere difficulties in the wake of the global economic (JKH) hadn’t violated the CCC Code of Ethics. This Lanka would stop the war ri Lanka’s Tourism Ministry is re-considering the crisis with high production costs and unreasonable came after the CCC’s Standing Committee was un- against the LTTE. “There Snew logo ‘Sri Lanka Small Miracle’ launched exchange rates. able to decide on the findings of a Panel of Inquiry was no call by the two with a big bash on June 23 after questions were into the ethics issue and then put forward the mat- visiting Indian emissaries raised over the word ‘small’ when ‘big’ things are February ter to the main committee for a vote, according to for a cessation of hostili- happening or seen in this country, officials said. sources close to the committee. The matter of ties,” Defence Secretary Mixed reaction to IMF loan Accounting Watchdog wants more teeth whether JKH violated the Code of Ethics arose after Gotabhaya Rajapaksa, he national accounting and auditing standards the Supreme Court in mid-2008 cancelled the priva- told The Sunday Times. He said the Indian emissa- he US$2.5 billion International Monetary Fund Twatchdog says it needs more legal teeth, to tization of Lanka Marine Services (LMS), a former ries – National Security Advisor M.K. Narayanan T(IMF) loan has brought mixed reactions from all avoid a repetition of the Golden Key type of mega- state company, on the grounds of serious irregulari- and Foreign Secretary Shivshankar Menon – had quarters from politicians to economists and Central Raj’s arrest triggers panic in Sri Lanka public scam in future. ties in the transaction. LMS, a fully-owned subsid- explained to President Rajapaksa the pressure ap- Bank (CB) officials. Although the stock market reac- Rs. 4 billion bailout plan iary of JKH, was ordered to pay all taxes from the plied by Tamil Nadu on the central Government in ted to the news, of the loan being approved on July ri Lankan-born billionaire businessman Raj Ra- date of privatization. New Delhi. 24, with healthy trading levels, some economists jaratnam's arrest in the United States on Friday for finance companies S Going after the IMF and opposition leaders feel the CB and the govern- on an alleged US$20 million insider trading charges he Central Bank (CB) an- May ment must do more has hit Sri Lanka like a thunderbolt with not only the Tnounced a Rs 4-billion bail- he government last week announced it was ne- to correct and Colombo Securities & Exchange Commission (SEC) out package for ailing finance Tgotiating an IMF standby facility of up to $1.9 strength- here scrambling to check whether his million-dollar and leasing companies, billion to fund post-war development in the country en the dealings bordered on any illegality, but also high- caught up in the Golden Key and shore up Sri Lanka’s dwindling foreign ex- macro- level politicians under a cloud for involvement with and Sakvithi debacles and change reserves. It was The Sunday Times that economic him. aimed at restoring public confidence. CB Governor was off the blocks on a possible return of the IMF, fundamentals Ajith Nivard Cabraal told reporters that the fallout in an exclusive story headlined “Devaluation or IMF and improve the November from the collapse of unauthorized financial institu- bailout: Economists sound warning as reserves Balance of Payment tions has created the difficulties companies face plummet to lowest level, but CB confident” on Jan- (BOP) position. which includes a severe liquidity uary 18, 2009. The story quoted economists and Police release astrologer shortage. exporters as urging the government to devalue the Supreme Court terminates rupee or seek an IMF bailout package as foreign re- n astrologer who was serves had sunk to never-before levels. CB Gover- Adetained by the CID for oil hedging case nor Ajith Nivard Cabraal was also allegedly making political he Supreme Court this month vaca- quoted in the same story as say- predictions unfavourable to Tted (withdrew) all the interim or- ing that there was no need for LTTE defeated the present government was ders issued in the controversial oil such measures, saying “the released from police custo- hedging cases and terminated the situation is under con- resident declared that the dy. Chandrasiri Bandara, case since the government had trol,” and that they PSri Lankan armed forces had “finally defeated who writes a regular astrol- failed to comply with earlier court were confident in the LTTE militarily” on May 16, 2009. The Presi- ogy column for the inde- orders. The interim orders relate to raising enough dent said that many in the world believed that pendent Sinhala-language the suspension of Ceylon Petrole- cash from the the LTTE was invincible, but the govern- newspaper “Irudina”, was um Corporation (CPC) Chairman Sri Lanka Dia- ment with the total commitment of the held in police custody for two weeks following re- Asantha de Mel, CPC Deputy General spora through Armed Forces, had in an unprecedented ports that he had said that Prime Minister Ratnasiri Manager (Finance) Lalith Karunaratne, the investments in humanitarian operation, finally defeated Wickremanayaka would become President and Op- CPC foreign exchange payments due to five com- bonds and the LTTE militarily. position leader would be- Ceylinco Chief freed under mercial banks and fuel pricing. treasury bills. come Prime Minister, in September. Prabhakaran killed strict bail conditions Some 4,000 Pramuka Global crisis rips garment industry Prabhakaran’s secrets dug out he Army declared fter spending nine months in remand at the We- depositors get refunds n estimated 40,000 workers have been laid off Tthat LTTE leader Vel- he slain LTTE Chief Velupillai Prabhakaran’s Alikada magazine prison in connection with the mall depositors, numbering 3927, of the col- Aand some 50 garment factories have put up lupillai Prabhakaran was Tplans for suicide attacks, arms purchases and alleged misappropriation of the deposits of failed Slapsed Pramuka Bank have been paid shutters in the past six months. But trade union found dead near Vellai- measures to develop the movement are outlined in Golden Key (GK) Credit Card Co., Ceylinco Chairman Rs.100,000 each by the Sri Lanka Savings Bank leaders claim that unscrupulous apparel industry el- mullivaikal following re- vital documents found by the police at Vellamulli- Lalith Kotelawala was wheeled out a free man and (SLSB) set up to resurrect the defunct bank, SLSB ements were blowing up the global recession to ports that he was trap- vaikkal in the Mullaitivu district, a top official said. immediately transferred to a private hospital in Co- officials said. trim down on concessions given to the workers. ped in the No Fire Zone. Colombo Crime Division Superintendent Vass Guna- lombo. Angry depositors pelt stones at Military Spokesman wardena said the documents in some 272 files Opposition’s Common Candidate: Udaya Nanayakkara were found buried underground in barrels. The de- Kotalawala’s office said Prabhakaran was tection was made after information was given to security officer at the office of Ceylinco Con- found dead after 250 other guerrilllas had been kil- the CCD by a close associate who worked with the onstituent parties Asolidated Chairman Lalith Kotelawala was led as soldiers captured their last enclave, the No- LTTE leader for more than ten years. Cof the newly slightly in- Fire or Civilian Safety Zone on the Mullaitivu formed-United Na- jured when coast. August tional Front (UNF) a group of At Least 50,000 workers lose reached consensus about 100 Mere 18% turnout at Jaffna poll that General Sarath protesting jobs since January nly a few voters went to the Fonseka should be depositors t least 50,000 workers have lost their jobs Opolls in the northern town of their common candi- of the col- Asince January from factory and company clo- Jaffna where elections to the date in the event of a lapsed Gold- sures plus retrenchment owing to the current Municipal Council were held Presidential Election. en Key economic crisis triggered by the global uncer- for the first time in 11 years– The major players of Credit Card tainty. Unofficial figures show that the layoffs with election officials saying the Front are the (UNP), the Co turned have come from more than 30 companies in Co- only 18,336 voters or 18.26% Sri Lanka Muslim Congress (SLMC), the Sri Lanka unruly and lombo, Kegalle, Kurunegala, Kalutara, Gampaha of the 100,417 eligible voters Freedom Party-Mahajana Wing and the National threw Monaragala, Embilipitiya, Galle, Matale, Chilaw had cast their ballots. Democratic Front.