Former President’s Chief of Staff, Gamini Sedara Senarath and two officials were yesterday ordered to be released on bail by the Colombo Fort Magistrate.

The Magistrate observed that the suspects cannot be charged under the Public Property Act.

They are charged for allegedly misusing public funds by illegally investing Rs.4 billion from the Rs.18.5 billion approved by the Cabinet for a hotel project in 2012.

The three suspects, Gamini Senarath, former Sri Lanka Insurance Corporation Managing Director Piyadasa Kudabalage and former Samurdhi Commissioner Neil Bandara Hapuwinna were released on a cash bail of Rs. 50,000 with two sureties of one million rupees each by Fort Magistrate Lanka Jayaratne.

The Magistrate further observed that so far there is no sufficient facts brought before court to institute criminal charges against the three suspects. The first and second suspects were barred from leaving the country.

In her bail order, the Magistrate maintained that Sri Lanka Insurance Corporation is a company registered under the Company Act and thereby it does not come under the Public Property Act. However, the Magistrate observed that there is no obstacle for the Attorney General to initiate legal action against the suspects following the conclusion of investigations.

According to a B report filed before the Colombo Fort Magistrate’s Court, they have been accused of misusing government funds by illegally investing Rs.4 billion from the Rs.18.5 billion approved by the Cabinet in 2012.

The funds in question had been the allocated for the Kollupitiya Grand Hyatt Regency Hotel, to be constructed by Canwill Holdings, a company affiliated to Sri Lanka Insurance Corporation, but had been invested in the Hambantota Hyatt Regency Hotel project.

It is revealed that Canwill Holdings formed two subsidiaries, Sinolanka Hotel and Spa, which was implementing the Hyatt hotel project in Kollupitiya and Helanco Hotels and Spa to carry out the proposed Hyatt hotel in Hambantota.

The reconstruction work of the partly build Celestial Residencies building of the failed Ceylinco Group was then transformed, during the past three years, to build the Hyatt hotel in Colombo. The land was leased for 99 years from the Urban Development Authority (UDA) after the former Ceylinco property was expropriated by the previous government in 2011, in terms of the provisions in the Revival of Underperforming Enterprises and Underutilised Assets Act No.43 of 2011.

The prosecution maintained that the Canwill Holdings Ltd is a state-owned public enterprise, set up during former regime, with Rs. 18.5 billion in equity, secured from its major shareholders, Sri Lanka Insurance Corporation, which has invested Rs. 8.5 billion, and Litro Gas and the Employees Provident Fund (EPF) with Rs. 5 billion each.

On November 9, the three suspects appeared before Court as per an undertaking given to the Supreme Court. However, at that time, the defence counsel appearing on behalf of the suspects told Court that their clients were not surrendering to Court, but merely appearing for the purpose of making a statement to the FCID.

Senarath and two others had filed three Fundamental Rights petitions in the Supreme Court seeking an order preventing the FCID from arresting them in connection with a magisterial inquiry, under the Public Property Act and Prevention of Money Laundering Act.

This petition is to be taken up for support on November 24.

President’s Counsel Ali Sabry with Anil Silva PC, Sampath Mendis and Counsel Nalinda Indatissa appeared for the suspects. Chief Inspector Anura Premaratne appeared for the FCID.

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