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Lycamobile faces winding-up petition over £51m VAT dispute amid financial struggles and scrutiny

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The Guardian: Lycamobile, a telecoms company that has given more than £2m to the Conservative party, has been issued with a winding-up petition by HM Revenue and Customs, amid a long-running VAT dispute.

The company, founded by businessman Allirajah Subaskaran in 2006, sells pay-as-you-go sim cards that are popular with low-paid workers wanting to make cheap phone calls to family overseas, as well as in the UK.

While the company generated revenues of more than £145m in 2022, it is now loss-making. Its accounts have repeatedly been filed late and have at times confounded its own auditors.

Successive accounting firms have raised concerns about the opacity of Lycamobile’s books, while the company has also been locked in an eight-year tussle with HMRC over its treatment of VAT on phone “bundles” sold to customers over seven years.

The amount in dispute is £51m, according to a tax tribunal that ruled in favour of HMRC last month. In accounts filed earlier this year, Lycamobile estimated the potential cost to the company at £99m.

A winding-up petition is a formal legal process that creditors can use against a company that owes them money and is unable to pay its debts. HMRC regularly issues such petitions, which can result in assets being forcibly sold, against companies that have not paid their tax bill.

HMRC issued the winding-up petition against Lycamobile UK Ltd on Monday, according to a court filing seen by the Guardian and first reported by City AM. Identical petitions were served against sister companies Lycatel Services Ltd and, a week earlier, against Lycamoney Financial Services Ltd. All are ultimately owned by Subaskaran, a British-Sri Lankan entrepreneur who is Lycamobile’s founder and chair.

Lycamobile was one of the Tory party’s most generous donors between 2011 and 2016, giving more than £2.1m. It also supported Boris Johnson’s successful attempt to become London mayor.

It came under scrutiny in 2015 when an investigation by BuzzFeed revealed that Lycamobile employees were depositing rucksacks full of cash, some containing up to £250,000, at the Post Office.

There is no suggestion of any connection to the VAT dispute and Lycamobile said at the time that its cash deposits were part of “day-to-day” banking sanctioned by the Post Office.

Lycamobile has repeatedly filed its accounts late, putting it at risk of being struck off the corporate register. In 2016, the auditor KPMG said it was unable to account for £134m of assets, citing an arcane corporate structure including offshore entities.

The company’s latest auditor, PKF Littlejohn, said in June that it could not sign off Lycamobile’s accounts because it had “not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion”.

Those results, for the year to the end of December 2022, showed a £24m loss, compared with an £8m profit the previous year.

In the subsequent financial year, for which accounts are not yet available, the company suffered a malware attack that reportedly prevented customers making calls or topping up their accounts.

The Guardian has approached Lycamobile for comment.

HM Revenue and Customs said it could not comment due to rules regarding taxpayer confidentiality.

Judicial Independence, Public Mandate, and the Debate on Extending the Retirement Age of Judges: A Constitutional Perspective

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The recent debate surrounding the proposal to extend the retirement age of judges in Sri Lanka has generated intense public discussion. Some critics argue that such an extension could undermine judicial independence by enabling the Executive to influence judges through the prospect of prolonged tenure. However, some argue that the proposal should not be viewed solely through the narrow lens of judicial independence. Instead, they argue that it should be examined within the broader constitutional framework of ensuring an efficient, accountable, and independent judiciary capable of giving practical effect to the sovereignty of the people.

This debate deserves careful analysis because both judicial independence and judicial accountability are indispensable pillars of constitutional democracy. Neither should be sacrificed in favour of the other.

The People’s Mandate for Good Governance.

The presidential and parliamentary elections of 2015 marked a significant turning point in Sri Lankan politics. The principal issue before the electorate was not merely a change of government but the eradication of corruption, strengthening the rule of law, and establishing good governance.

The overwhelming electoral victory of the coalition that campaigned on these principles constituted more than a political success. It represented a democratic mandate from the people demanding accountability, transparency, and equal application of the law.

Under the Constitution, sovereignty resides in the people. Legislative power, executive power, and judicial power are all exercised on behalf of the people. Accordingly, every organ of government bears a constitutional responsibility to ensure that the people’s sovereign will, expressed through the Constitution and the law, is effectively implemented.

The implementation of that mandate, however, depended not only on the Executive and Parliament but equally upon the judicial system.

Political Will Alone Cannot Achieve Constitutional Objectives.

Although the government elected in 2015 publicly committed itself to combating corruption, numerous allegations subsequently emerged suggesting that certain members of the 2015 administration had compromised that objective through political arrangements with individuals associated with previous administrations.

Recent criminal investigations involving persons connected with that administration have once again revived public discussion regarding whether opportunities to address corruption were lost because of political compromises.

Whether those allegations are ultimately established through judicial proceedings is a matter for the courts. Nevertheless, they illustrate an important constitutional reality: political promises alone do not produce constitutional outcomes.

Even where there exists genuine political commitment, the successful implementation of anti-corruption measures depends upon independent investigations, efficient prosecutions, and timely judicial determination.

Without those institutional mechanisms, electoral mandates remain unrealised.

The Present Government’s Democratic Mandate.

The constitutional debate cannot be confined to the events of 2015 alone. The present Government has likewise been elected on an unequivocal public mandate to combat bribery and corruption, strengthen the rule of law, and restore public confidence in State institutions. The electorate once again expressed its expectation that corruption would be investigated impartially, prosecuted effectively, and determined by the courts without undue delay. That democratic mandate imposes a constitutional obligation upon the Government to take all lawful and appropriate measures necessary to ensure that the people’s expectations are translated into practical reality.

A responsible government is not expected merely to repeat the approaches of its predecessors. It is expected to learn from past experience, identify institutional shortcomings that hindered the effective implementation of earlier anti-corruption initiatives, and introduce corrective measures within the framework of the Constitution and the law. If experience has demonstrated that weaknesses in institutional administration, prolonged delays in judicial proceedings, or deficiencies in case management have impeded the effective enforcement of the law, it is both legitimate and necessary for the Government to consider appropriate reforms to address those shortcomings.

Such reforms should not be misunderstood as attempts to interfere with the judicial process. The Government has neither the authority nor the constitutional right to influence the outcome of individual cases. However, it has both the authority and the duty to create the legislative, administrative, and institutional conditions that enable the judiciary to function independently, efficiently, and effectively. Measures designed to preserve institutional stability, strengthen judicial administration, reduce unnecessary delays, and improve the overall administration of justice are capable of serving that legitimate constitutional objective.

Accordingly, if the proposal to extend the retirement age of judges is genuinely intended to preserve the continuity of judicial leadership, consolidate ongoing institutional reforms, and strengthen the efficient administration of justice, it should be evaluated on those constitutional considerations rather than on speculation regarding political motives. The decisive question is not whether the proposal originates from the Government, but whether it serves the public interest, respects constitutional safeguards, preserves judicial independence, and ultimately assists in giving practical effect to the sovereign will of the people as expressed through democratic elections.

The Judiciary’s Constitutional Responsibility.

Judicial independence is frequently described as freedom from executive or political interference. That description is correct but incomplete.

Judicial independence also carries with it a constitutional responsibility. An independent judiciary must administer justice efficiently, fairly, and without unnecessary delay. Delayed justice can weaken public confidence in the legal system and diminish the practical effectiveness of judicial remedies.

Following 2015, many corruption cases involving matters of considerable public importance progressed slowly. Several proceedings continued for years without final determination. The reasons for those delays undoubtedly varied. Some arose from procedural complexity, extensive legal argument, constitutional litigation, or limitations within investigative and prosecutorial institutions. Nevertheless, prolonged delays inevitably created public concern.

Lengthy proceedings may allow witnesses to become unavailable, influenced, memories to fade, documentary evidence to deteriorate or misplaced, and public confidence to diminish. Such consequences are inconsistent with both effective criminal justice and sound judicial administration.

Recognising these institutional challenges does not require criticism of individual judges. Rather, it highlights the importance of improving judicial administration so that justice is delivered within a reasonable time while fully preserving procedural fairness.

Giving Effect to the People’s Sovereignty.

It is sometimes suggested that courts should remain completely insulated from public expectations. Certainly, courts must never decide cases according to political popularity or governmental preference. Their duty is to decide every case according to law. However, there is an important distinction between responding to political pressure and fulfilling constitutional responsibility.

The Constitution vests judicial power in courts as an expression of the sovereignty of the people. Consequently, courts are expected to administer justice efficiently so that constitutional rights and legal obligations are practically enforceable.

Giving effect to the people’s sovereignty therefore does not require judges to favour the government. It requires judges to ensure that the law functions effectively and without unnecessary delay. Efficiency in judicial administration strengthens judicial independence rather than weakening it.

The Importance of Judicial Leadership.

Every institution requires effective leadership. Within the judiciary, the Chief Justice and the Judicial Service Commission occupy positions of exceptional constitutional importance. Their responsibilities extend beyond adjudication.

They include maintaining discipline, ensuring institutional integrity, supervising judicial administration, allocating judicial resources, addressing delays, responding to complaints against judicial officers, and promoting public confidence in the administration of justice.

A modern judiciary cannot rely solely upon the independence of individual judges. Institutional independence must be accompanied by institutional accountability, professional administration, and effective leadership. These objectives are entirely consistent with judicial independence.

Recent Institutional Improvements.

There is increasing public recognition that significant administrative reforms have recently occurred within the judiciary. Cases that remained pending for extended periods are reportedly being listed more actively.

Greater emphasis appears to have been placed upon continuous hearings, case management, reduction of unnecessary postponements and digitalization.

Allegations concerning judicial misconduct have reportedly been investigated more actively, and disciplinary mechanisms appear to be functioning with increased effectiveness.

These developments suggest an institutional commitment towards improving efficiency while preserving judicial independence. Although considerable work remains, the direction of reform appears positive. Institutional reforms of this nature generally require continuity of leadership before their full benefits become visible.

Continuity of Judicial Administration.

Against this background, the proposal to extend the retirement age of judges deserves objective consideration. Opponents argue that such an extension may create an appearance that judges receive personal benefit from the Executive.

However, the constitutional validity or desirability of an extension cannot be determined merely by assumptions regarding governmental motives. The central question should instead be whether the reform serves a legitimate constitutional objective and whether appropriate constitutional safeguards remain intact.

If an extension applies generally to all judges through constitutional amendment and amendment to Judicature Act as general application, rather than selectively benefiting particular individuals, it can reasonably be argued that the measure concerns institutional policy rather than personal favour.

Where judicial administration is undergoing significant reforms, continuity of experienced judicial leadership may contribute to consolidating those reforms. Institutional memory, administrative experience, and ongoing reform programmes may justify maintaining existing leadership for a limited additional period.

Continuity alone cannot justify every legislative change. Nevertheless, continuity pursued for legitimate institutional purposes differs fundamentally from interference designed to influence judicial decision-making.

Understanding the Nature of the Opposition.

Public debate surrounding the proposed constitutional amendment should not be viewed as consisting solely of a disagreement over judicial independence. Although concerns regarding judicial independence have understandably occupied the centre of the discussion, there are other institutional and practical considerations that have also influenced the opposition to recent reforms within the judiciary.

One such concern relates to the significant changes introduced in the day-to-day administration of courts. In recent years, greater emphasis has been placed on active case management, continuous hearings, minimising unnecessary postponements, and ensuring that cases proceed without avoidable delay. These administrative reforms have inevitably required judges, court staff, and legal practitioners to adapt to a more demanding working environment.

It has been observed that, in some courts, judges and court officials have been expected to work beyond traditional working hours in order to reduce case backlogs and improve the disposal of cases. Many members of the legal profession have also found it necessary to adjust to stricter scheduling and reduced opportunities for adjournments. For some practitioners, these changes have created practical difficulties and have been perceived as placing additional pressure upon them.

It must be noted that meaningful reform often requires changes to long-established working practices. Administrative systems that have existed for decades cannot be modernised without some degree of adjustment and temporary inconvenience. The ultimate objective of these reforms is not to burden legal professionals but to ensure that litigants receive timely justice and that public confidence in the administration of justice is strengthened.

At the same time, it would be unrealistic to assume that every criticism of the proposed constitutional changes is motivated solely by concern for judicial independence or the efficient administration of justice. Sri Lanka continues to witness the investigation and prosecution of numerous cases involving allegations of bribery, corruption, and abuse of public office. Some political actors who face such proceedings, or whose political interests may be affected by their expeditious determination, have openly criticised recent developments within the justice system and the proposed constitutional reforms.

Whether such criticism is genuinely motivated by constitutional principle or influenced by personal or political considerations is ultimately a matter for public evaluation. Nevertheless, it would be equally mistaken to assume that every opponent of the proposed reforms acts solely out of concern for judicial independence. As with any significant constitutional debate, a variety of interests and motivations are likely to exist simultaneously. Some objections may arise from sincere constitutional concerns, others from institutional resistance to change, and still others from political or personal interests.

For that reason, the present debate should not be reduced to a simple conflict between those who support judicial independence and those who oppose it. Rather, each proposal should be evaluated objectively on its constitutional merits. Genuine concerns regarding judicial independence deserve careful consideration and appropriate safeguards. Equally, criticism motivated by resistance to administrative reform or by personal political interests should not prevent the State from implementing lawful measures that strengthen the administration of justice and give practical effect to the people’s constitutional mandate.

Delay in Judicial Proceedings as a Political Issue.

Court delay is frequently viewed as merely an administrative problem. In reality, it has wider constitutional consequences. Delayed justice affects economic development, investor confidence, public administration, protection of fundamental rights, and public trust in democratic institutions.

When corruption prosecutions remain unresolved for years, public confidence in both democratic governance and judicial institutions inevitably suffers.

Consequently, ensuring timely judicial proceedings inevitably acquires political significance, not because judges should become political actors, but because effective justice is indispensable to democratic governance.

In this sense, monitoring delays and improving judicial performance inevitably involves public policy. That does not constitute political interference. Rather, it reflects responsible constitutional governance.

Political Support Is Not Political Interference.

The term “political” often carries negative connotations in discussions concerning judicial independence. Yet every constitutional reform originates through political institutions.

Constitutional amendments, judicial budgets, recruitment of judges, court infrastructure, procedural legislation, and administrative reforms all require political decisions made through democratic processes.

Political support for strengthening judicial institutions should therefore not automatically be equated with political interference.

The distinction lies in purpose. Political interference seeks to influence judicial outcomes. Political support seeks to strengthen judicial institutions so that they may independently administer justice more effectively. That distinction is fundamental.

A democratic government has not only the authority but also the constitutional obligation to provide adequate institutional support to enable courts to function efficiently.

Independence Must Be Matched by Accountability.

Judicial independence is one of the greatest safeguards of liberty. However, independence cannot become institutional isolation. The judiciary exercises sovereign power belonging to the people. Like every public institution exercising sovereign authority, it must strive continuously to improve efficiency, transparency, integrity, and public confidence.

Judicial accountability does not require judges to answer for the substance of their decisions. Their decisions remain subject only to appellate review. Institutional accountability instead concerns the effective administration of justice, timely disposal of cases, ethical conduct, and efficient management of judicial resources.

An independent judiciary that also demonstrates institutional accountability commands greater public confidence than one that relies solely upon formal guarantees of independence.

Conclusion

The present debate concerning the extension of judges’ retirement age should not be reduced to a simple question of whether the Executive seeks to influence the judiciary. Such an approach risks overlooking broader constitutional considerations. The more fundamental issue is whether Sri Lanka can preserve and strengthen the positive momentum presently visible within its judicial administration.

If genuine reforms are underway reducing delays, strengthening discipline, improving case management, and enhancing institutional efficiency there may be legitimate constitutional reasons for preserving administrative continuity for a limited period, provided that appropriate constitutional safeguards protecting judicial independence remain fully intact.

Ultimately, judicial independence and judicial efficiency are not competing values. They are complementary constitutional principles. The people expect courts that are independent enough to decide cases without fear or favour, yet efficient enough to ensure that justice is neither delayed nor denied.

The true objective of constitutional reform should therefore be neither executive control nor judicial isolation. It should be the creation of a judiciary that faithfully exercises the people’s judicial power according to law, free from improper influence, efficiently administered, and fully capable of realising the constitutional promise of good governance and the rule of law.

Commonwealth Lawyers’ Association Chief Urges Caution Over Proposed Judicial Retirement Age Amendment

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July 05, Colombo (LNW): President of the Commonwealth Lawyers’ Association, Steven Thiru, has cautioned that Sri Lanka could face a serious erosion of public trust in its judiciary if proposed changes to the retirement age of superior court judges are introduced without a transparent and inclusive consultation process.

Speaking at a public forum hosted by the Bar Association of Sri Lanka (BASL) on Saturday (04), Thiru stressed that the central concern was not whether judges should serve for longer, but how and when such constitutional changes are introduced, particularly if they affect judges currently holding office.

Referring to developments in Zimbabwe, Thiru highlighted the constitutional amendment enacted in 2021, which increased the retirement age of senior judges from 70 to 75 while the country’s Chief Justice was approaching retirement. He noted that the amendment was passed through an expedited legislative process, triggering widespread public debate and legal challenges.

He explained that Zimbabwe’s High Court initially ruled that the revised retirement age should not apply to judges already in office. Although that decision was later overturned by the Constitutional Court, Thiru said the episode left lasting concerns over judicial independence and reinforced public perceptions that the Executive had exerted undue influence over the judiciary.

Drawing parallels with Sri Lanka’s current debate, he warned that the country is at a pivotal constitutional moment and should avoid adopting reforms that could be viewed as benefiting incumbent judges or reshaping the composition of the higher courts.

Thiru emphasised that any constitutional amendment affecting the judiciary should be developed through a broad-based public consultation process, ensuring openness, accountability and public confidence. Reforms of such significance, he said, must not only uphold constitutional principles but also preserve the appearance and reality of judicial independence.

His remarks were made during a BASL forum convened to discuss the proposed constitutional amendment seeking to raise the retirement age of judges serving on the Supreme Court and the Court of Appeal.

Government Plans Skills-Focused Education Overhaul to Better Prepare Students for the Future

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July 05, Colombo (LNW): Prime Minister Dr. Harini Amarasuriya has reaffirmed the Government’s commitment to transforming Sri Lanka’s education system by placing greater emphasis on practical skills, creativity and critical thinking, ensuring students are better equipped to meet the demands of a rapidly changing world.

Speaking at the opening of the ‘Arumasiya’ student exhibition and the foundation stone-laying ceremony for a new three-storey academic building at Balangoda Vidyaloka Central College yesterday (04), the Prime Minister outlined the Government’s long-term vision for education reform.

After officially opening the exhibition, Dr. Amarasuriya toured displays featuring a range of student-led innovations and creative projects. She praised the students for showcasing talents that reflected problem-solving abilities, originality and practical knowledge beyond the traditional classroom curriculum.

Addressing students, teachers and parents, the Prime Minister said the Government is preparing to introduce a comprehensive education reform programme from 2027. The proposed changes are intended to move away from an education system heavily centred on examinations and instead promote learning that develops practical competencies, innovation and real-world skills.

She said the reforms are designed to ensure that every school leaver has opportunities to pursue vocational or technical education that matches their abilities while meeting the evolving needs of the country’s economy and employment sector. She also stressed that vocational education should be recognised as an equally valuable pathway alongside university education, helping to remove long-standing social perceptions surrounding career choices.

Dr. Amarasuriya further commended the principal, teachers, students and parents of Balangoda Vidyaloka Central College for their efforts in organising the exhibition, describing the event as an excellent example of how schools can encourage innovation and holistic learning.

According to the Prime Minister’s Media Division, the event was attended by Ratnapura District Members of Parliament Wasantha Pushpa Kumara and Sunil Rajapaksha, the Mayor of Balangoda, members of the Municipal Council, the Zonal Director of Education, the school’s principal and teaching staff, as well as parents and students.

Interpol Fugitive Arrested at BIA Over Alleged Role in Akuregoda Double Murder

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July 05, Colombo (LNW): A 23-year-old suspect sought in connection with the fatal shooting of an attorney-at-law and his wife in Akuregoda earlier this year has been taken into custody after being extradited from the Maldives and arriving at Bandaranaike International Airport (BIA).

Police said the suspect, a resident of Ethulgama, was returned to Sri Lanka on July 04 under the supervision of a Criminal Investigation Department (CID) team. Upon his arrival, he was identified through the airport’s automated biometric E-gate system and immediately arrested before being transferred to the Western Province South Crime Division for further questioning.

The suspect had been the subject of an Interpol Red Notice issued following his departure from the country after the killings.

According to investigators, the man is believed to have played a significant role in the double murder that took place on February 13, 2026 within the Thalangama Police Division. The victims, a lawyer and his wife, were travelling in their vehicle when they were ambushed and shot dead. Detectives allege that the suspect was responsible for driving the escape vehicle used by the gunmen after the attack.

Police further revealed that the suspect has a history of criminal offences and was on strict bail in relation to two separate cases when the murders were allegedly carried out. He had previously been arrested by the Malwathuhiripitiya Police in October 2025 for allegedly possessing a T-56 assault rifle without lawful authority before being granted strict bail by the Minuwangoda Magistrate’s Court.

He was later arrested again by the Welikada Police in December 2025 over the alleged possession of heroin and was also released on strict bail by the relevant Magistrate’s Court.

Investigations are continuing as officers from the Western Province South Crime Division seek to establish the full extent of the suspect’s alleged involvement in the Akuregoda murders and his suspected links to the organised criminal group believed to have orchestrated the attack.

Dengue Infections Surge Past 59,000 as Nationwide Control Measures Intensify

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July 05, Colombo (LNW): Sri Lanka has recorded more than 59,000 dengue infections so far in 2025, highlighting the continued spread of the mosquito-borne disease across the country, according to the National Dengue Control Unit (NDCU).

Official figures show that 59,638 cases have been confirmed since the beginning of the year, with June emerging as the worst-affected month after registering 21,546 infections. The upward trend has continued into July, with 4,251 cases reported during the first four days of the month alone.

The Western Province remains the country’s hardest-hit region, accounting for 31,249 reported cases. The Southern Province has recorded 9,507 infections, while the Sabaragamuwa Province has reported 5,172 cases, making them among the areas most affected by the outbreak.

In response to the escalating situation, authorities have launched a special dengue prevention and eradication drive from today (5), targeting 23 high-risk locations across the Western Province.

The campaign will cover several identified hotspots in the Colombo District, including Maharagama, Kaduwela, Homagama, Gothatuwa, Battaramulla, Piliyandala and the Colombo Municipal Council area. Similar operations will also be conducted in the Gampaha District, encompassing Biyagama, Kelaniya, Seeduwa, Ja-Ela, Mahara, Wattala, Negombo and Minuwangoda, as well as in the Kalutara District, where Panadura, Bandaragama, Horana, Ingiriya and Kalutara have been identified for intervention.

The large-scale initiative is being coordinated under the Clean Sri Lanka Programme on the instructions of the President’s Office. Health authorities, the tri-forces, the police, District and Divisional Secretariats, local government bodies, voluntary organisations and other state and community stakeholders are working together to eliminate mosquito breeding sites, strengthen public awareness and curb the spread of dengue.

2025 A/L Re-scrutiny Results Now Available Online

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July 05, Colombo (LNW): The Department of Examinations has officially published the re-scrutiny results for the 2025 General Certificate of Education (G.C.E.) Advanced Level (A/L) Examination, enabling candidates to access the outcome of their applications.

Students who requested a review of their examination results can now view the updated outcomes through the Department’s official online portals.

https://www.doenets.lk/

http://www.results.exams.gov.lk/home.htm

The Department has also advised candidates who require further clarification or encounter any issues relating to the re-scrutiny process to contact the School Examinations and Results Branch for assistance.

Support is available via the 1911 hotline or by calling 011 2784208, 011 2784537, or 011 2785922 during official working hours.

A Few Provinces to Witness Showers: Strong Winds Expected (July 05)

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July 05, Colombo (LNW): Several spells of showers will occur in Sabaragamuwa province and in Kandy and Nuwara-Eliya districts, the Department of Meteorology said today (05).

A few showers will occur in Western and North-western provinces and in Galle and Matara districts.

Strong winds about (40-50) kmph can be expected at times over Western slopes of the Central hills, Northern, North-central and North-western provinces and in Rathnapura, Hambantota and Trincomalee districts.

Marine Weather:

Condition of Rain: A few showers will occur in the sea areas off the coast extending from Chilaw to Galle via Colombo.

Winds: Winds will be south-westerly. Wind speed will be (30-40) kmph. Wind speed can increase up to (55-65) kmph at times in the sea areas off the coast extending from Kankasanthurai to Puttalam via Mannar and from, Matara to Pottuvil via Hambantota. Wind speed can increase up to 50 kmph at times in the other sea areas around the island.

State of Sea: The sea areas off the coasts extending from Kankasanthurai to Puttalam via Mannar and from, Matara to Pottuvil via Hambantota will be very rough at times. The other sea areas around the island will be fairly rough at times.

The wave height may increase about (2.0 – 2.5) meters in the sea areas off the coast extending from Chilaw to Pottuvil via Colombo, Galle and Hambantota.

When Fear replaces Governance

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By: Joseph G.

July 05, Colombo (LNW): A dangerous culture is quietly taking root in Sri Lanka’s public administration: the culture of fear.

It’s now rampant across ministries, departments, and State institutions, decisions are being delayed, deferred, or avoided altogether. Files move slowly, procurement stalls, projects remain suspended, and public grievances pile up.

This is no ordinary bureaucratic inefficiency. It is a deeper and more troubling phenomenon – governance by self-preservation.

Many public officers today appear less concerned about solving problems than protecting themselves from future investigations, commissions, or court proceedings. In their minds, the greatest risk is no longer a failed policy, but being personally held responsible years later for a decision taken in good faith.

The result is paralysis.

The recent controversies surrounding coal procurement, financial irregularities, and institutional accountability have sent a chilling message through the public sector: act, and you may be punished; delay, and you are safer. This has had a cascading effect. Officials now seek multiple approvals, endless circular references, and excessive legal and administrative cover before taking even routine decisions.

The damage to the country is immense. Hospitals face shortages because procurement is delayed. Infrastructure projects remain incomplete. Welfare allocations are slowed. Investment approvals drag on. Educational reforms are postponed. In each case, the public pays the price for official hesitation.

This problem is compounded by the erosion of trust in the State itself. When governments publicly disown the very officials expected to implement policy, or selectively prosecute past decisions with the benefit of hindsight, they create an atmosphere where caution becomes the only rational strategy.

But nations cannot be run on caution alone.

A public servant must, of course, be accountable. Corruption must be punished. Abuse of office must be exposed. But there must also be room for judgment, discretion, and honest error. Not every wrong outcome is a crime. Not every difficult decision is misconduct.

If every signature becomes a potential indictment, soon there will be no signatures at all.

That is the real danger.

Sri Lanka’s economic recovery, social stability, and administrative credibility depend not merely on policy announcements, but on the ability of institutions to act. A government that cannot make decisions – or whose officers are too afraid to make them – cannot govern.

Sri Lanka – An Upper Middle Income Country?

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By: A Special Correspondent

July 05, Colombo (LNW): In 2025, Sri Lanka’s per capita income was estimated at US$5003. Accordingly, the World Bank has again designated the country as an upper middle income country. It appears that the country’s gross domestic product in 2025 was estimated at US$108.8 billion and the mid-year population was 21.756 million.

When examining this, the following points should be noted.

  1. The mid-year population used to calculate per capita income was estimated at 21.756 million in 2025. However, it was 21.916 million in 2024. Accordingly, the mid-year population in 2025 has decreased from 2024. Such an occurrence has not been reported in recent history. At the same time, according to the Central Bank report, the population at the end of 2025 has increased by 0.6% compared to 2024, and the birth rate per 1000 population in 2025 is stated to be 9.9 and the death rate is stated to be 7.9.
  2. Although the GDP in 2025 showed a growth of 5% in Rupees, its growth showed a growth of almost 10% in dollars. Also, the Rupee has only appreciated by less than 1% in 2025.
  3. The huge increase in Omissions and Errors (E&OE) value in the Balance of Payments – namely, US$ 808 million, which has never been seen in history – may be a tactic used to change these macroeconomic data as needed.

AKD Reward to Hulangamuwa after the NDB 13 B Fallout and USD 2.5M Cyber Heist from FM

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By: Adolf

July 05, LNW (Colombo):

New Board minus the previous lot 

Sitting in Europe reading all the social media post surrounding the ex EY managing partner Duminda Hulungamuwa I was surprised when President Anura Kumara Dissanayake officially appointed Duminda Hulangamuwa as Chairman of the Board of Investment (BOI) on June 30, 2026, along with four other board members. The appointment placed one of the most controversial Tax and business advisers at the helm of Sri Lanka’s primary investment promotion agency. However, the decision has ignited intense controversy, with critics questioning the suitability of a figure so closely associated with major financial scandals and policy failures. For a government that rose to power on a wave of anti-corruption sentiment, the move appears contradictory at best and dangerously compromising at worst.

The NDB Fraud and Audit Failures

The most serious concerns center on Hulangamuwa’s tenure as Country Managing Partner of Ernst & Young (EY), the external auditor for National Development Bank (NDB) during a massive internal fraud. The fraud, first disclosed in April 2026, was initially estimated at Rs. 380 million but was shockingly revised to Rs. 13.2 billion just days later. It was reportedly executed through electronic transfers over an extended period, causing “massive anomalous balance sheet inflation” that went completely undetected by internal controls.

A derivative action has been filed against NDB’s board, directors, and external auditors, including EY and its partners. The petition argues that the abnormal spike in financial asset balances “should have been a glaring red flag for both the directors and auditors,” representing a “colossal failure of basic risk and compliance audits.”Critics argue EY’s failure to identify these red flags enabled NDB to raise approximately Rs. 16 billion through sustainable bonds from investors who were unaware of the fraud. As one commentary noted, “professional negligence is as damaging as subversion or mischief.” Several individuals have been arrested, Interpol is assisting the investigation, and Deloitte India has been appointed for an independent forensic review.

The question that haunts this appointment is simple yet damning: if Hulangamuwa’s firm could not detect a fraud of this magnitude under its own watch, what confidence can investors place in his oversight of billions in foreign direct investment?

The Treasury $2.5 Million Cyber Heist

Additionally, Hulangamuwa served as an advisor in the Ministry of Finance when US$2.5 million in Treasury funds was diverted to a rogue account through a cyber-enabled financial fraud. The fraud involved compromised communication channels, with officials failing to verify account details before transferring the funds. Four senior Finance Ministry officials were interdicted, and one official was found dead in an apparent suicide. While a Cabinet spokesman stated the Ministry would issue a clarification, the incident further raises questions about oversight during Hulangamuwa’s advisory tenure.For a position that demands credibility, these two episodes—totaling nearly Rs. 13.2 billion in undetected fraud and US$2.5 million in stolen public funds—represent a track record that would disqualify most professionals from any public office, let alone the chairmanship of the nation’s premier investment agency. But the Sri Lankan Investment Agency has seen so many pathetic political appointees like Hemasiri Fernando , Thilan Wijesighe who was prosecuted and later exonerated Saliya Wickramasuriyawho was remanded and released 

Policy Failures and Governance Concerns

Hulangamuwa’s track record as a policy advisor has also drawn scrutiny. During the previous administration, he championed a self-assessment tax system for Gotabaya intended to streamline revenue collection. The policy reportedly “proved disastrous,” with the government losing billions in potential revenue and being forced into a “humiliating policy reversal.”Furthermore, conflict of interest concerns have been raised, while heading EY, he served in the Ministry of Finance advising on Tax Matters, questions emerged about tenders being awarded under “dubious circumstances.” The overlapping roles blurred ethical lines and raised legitimate concerns about whether private-sector influence was being leveraged for undue advantage.

Political Motives and Internal Tensions

Analysts suggest the BOI appointment may be an attempt to distance Hulangamuwa from the Treasury amidst growing criticism. By relocating him to a high-profile but operationally distinct agency, the administration could be seeking to insulate him from further scrutiny while retaining his counsel. However, political sources indicate the hardcore JVP faction within the government views him as a “liability for the next election” and resists attempts to shield him from accountability. For a coalition that prides itself on transparency and grassroots integrity, keeping a figure with such baggage in a position of influence risks alienating the very base that propelled AKD to power. The internal friction suggests the appointment is far from unanimously supported, and the fallout could reverberate through future electoral contests.

A High-Stakes Gamble

The administration, acknowledging its limited experience in economic management, appears to view Hulangamuwa as a strategic injection of private-sector expertise. Yet as one commentary observed, this creates a paradox: “if the economic strategy is being shaped by the same individuals who advocated for failed policies in the past, is the nation merely setting itself up for a repeat of previous mistakes?”

With Sri Lanka navigating stringent IMF targets and the urgent need for foreign direct investment, the appointment demands rigorous oversight to ensure the BOI’s leadership is defined not by past controversies but by genuine national revival. The President has staked considerable political capital on this decision. Whether it proves to be a masterstroke or a miscalculation will depend not on the appointment itself, but on the accountability and performance that follow.