* Former managing director of SLIC, Piyadasa Kudabalage and former commissioner of Samurdhi, Neil Bandara Hapuwinna also remanded
* FCID says EPF funds misappropriated
* Defence Counsel said EPF money not invested in Hambantota Hotel Project
By Shehan Chamika Silva
Former presidential secretariat's chief of staff, Gamini Sedara Senarath and two others, who surrendered to Court, were torday remanded till November 15 by Fort Magistrate Lanka Jayaratne on charges of misusing Rs.4 billion in government funds.
Sri Lanka Insurance Corporation's former managing director, Piyadasa Kudabalage and Samudhi's former commissioner Neil Bandara Hapuwinna were also remanded.
They were charged with misusing government funds by illegally investing Rs.4 billion in the Hambantota Hyatt Regency Hotel project from the Rs.18.5 billion approved by the Cabinet in 2012 as an allocation for the Kollupitiya Grand Hyatt Regency Hotel to be constructed by a company affiliated to the Sri Lanka Insurance Corporation.
The FCID filed charges under the Public Property Act and the Criminal Procedure Code.
In 2012, with Cabinet approval, the assets belonging to Ceylinco Homes International was acquired on the basis of under-performing and underutilization.
The Cabinet approved these properties to be used for a hotel complex and for this purpose private and State entities including Sri Lanka Insurance Corporation Limited (SLIC) formed a company with these entities as shareholders.
Thus the Sri Lanka Insurance Corporation incorporated Sino Lanka Hotels & Spa Pvt Ltd., and Helanco Hotels & Spa Pvt. Ltd as immediate subsidiaries of SLIC. (Later another company called Canwill Holding Pvt. Ltd., had been also incorporated as the holding company of these two subsidiaries)
The suspects were also directors of this subsidiary company.
In mid 2012 the Grand Hyatt, began construction work in Colombo by obtaining capital requirements from SLIC – Rs.5 billion, Litro Gas – Rs.4.5 billion and from the EPF – Rs. 5 billion, a total of Rs.18.5 billion.
The FCID alleged that out of this total funds, Rs.4 billion was allocated to launch a Grand Hyatt Hambantota Hotel Construction in February 2014 through the subsidiary company named as Helanco. (It was revealed that this Hambantota project was later stopped by the current authorities and by then Rs.312.2 million had been already utilized for the project)
The prosecution said when the EPF was allocating its money, the Monetary Board had put a condition not to invest in any other projects and hence the suspects had violated that condition and misused government funds.
However, President’s Counsel Anil Silva, President’s Counsel Ali Sabri and Counsel Nalinda Indatissa who appeared on behalf of the three suspects contested the applicability of sections of the Public Property Act to the offences.
They said while Sino Lanka Hotels & Spa Pvt was carrying out the Colombo hotel project the Hambantota Hotel Project was carried out by the other subsidiary company called Helanco Hotels & Spa Pvt Ltd.
The initial capital requirements were provided to the Hambantota project by Litro Gas Lanka Limited – Rs. 500 million and SLIC – Rs.3.5 billion with the respective Board approvals for the investment.
“The EPF’s money was never invested in the Hyatt Regency, Hambantota project,” Ali Sabri PC said. The Counsel also said the EPF had been issued with shares in terms of its investment in the Colombo Hotel projects without any shortfalls.
The Counsel argued deeply about the applicability of the Public Property Act in the matter as the SLIC was not a public company under the prevailing law. They also contested that even if the SLIC is regarded as a public Corporation, the money had been allocated through a Private Company (Canwill Holding Company) and therefore considered the origin of the money has to be ceased afterwards.
They also said the FCID was not going beyond the fact of the Monetary Board decision with regard to the EPFs investment, therefore, the allegations were clearly baseless as the inclusion of the sections of the Public Property Act was erroneous.
Considering all the lengthy legal and factual submission of the defense counsel, Fort Magistrate Lanka Jayaratne directed both Defense Counsel and the Attorney General to file written submissions in due course so as to make an order with regard to this magisterial inquiry.
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