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Harry Loses SLIC

Thursday, 4 June 2009 - 4:08 PM SL Time

***SLIC privatisation null and void-SC
2009-06-04 14:25:16

The Supreme Court on Thursday ruled that the 2003 privatisation of Sri Lanka Insurance Corp (SLIC) was `null and void`. -

The 3-judge bench headed by Chief Justice Sarath N Silva and including Justices P. Sripavan and G. Amaratunga, said the (privatisation) process was flawed and that the petitioner`s fundamental rights had been violated.

The judgment read by by Justice Amaratunga ordered the Treasury Secretary to take over the management and control of the SLIC and to appoint a new board of directors in two weeks time. It said the sale of 90% of the shares to a consortium of companies controlled by Mr Jayawardena was null and void.

Source(s)
ST

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Rapaport
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Joined: Oct 2005
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4 Jun 2009 09:10:53 GMT Report for Abuse

The fundamental rights petition was filed in 2007 by politician cum public rights activist Vasudeva Nanayakkara who asked the Court to probe the 2003 SLIC privatization transaction and to consider annulling the same, due to several irregularities in the process which caused massive losses to the government and the public.

Around 38 respondents were cited in the case including Mr Jayawardena whose companies, Milford Holdings (Pvt) Ltd, Greenfield Pacific EM Holdings Ltd, Distilleries Company of Sri Lanka (DCSL) and Aitken Spence Insurance (Private) Ltd, entered into an agreement on the sale and purchase of the entire issued share capital of SLIC on April 11, 2003.

Other respondents include former Minister of Economic Reform Milinda Moragoda, former Secretary to the Treasury Charitha Ratwatte and the former Treasury Secretary and former Chairman of the Public Enterprises Reform Commission (PERC) P.B. Jayasundera.

A damning report by the Committee on Public Enterprises (COPE) released in 2007 by then COPE Chairman Wijedasa Rajapakse, detailed that the steering committee appointed in 2002 by Mr. Moragoda to oversee the SLIC sale had been done so without Cabinet approval. The report also noted that the steering committee has appointed PricewaterhouseCoopers (PwC) Indonesia to act as financial advisors to the government in collaboration with PwC Sri Lanka, without Cabinet approval and for a lucrative contract.

The Attorney General, according to case records, has noted that the SLIC made considerable profits between 31 March 2002 and the date of sale and that Mr. Jayawardena dictated the purchasing price and has not submitted proper audited accounts through Ernst & Young. (NG)

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Harry Loses SLIC