President Anura Kumara Dissanayake announces he has instructed the IGP and the CID to formally investigate the 2019 Easter Sunday attacks: criticises efforts by certain political individuals to suppress the investigation and committed to a fair inquiry: Ex-MP Udaya Gammanpila threatened to release two related reports if the President does not: Political analysts point out that Gammanpila’s so called ‘confidential reports’ are the ‘Imam Report’ and ‘Alwis Report,’ in which information pertaining to the ‘Channel 04 Documentary’ about the attack, and its connections to certain government officials are preserved, in a bid to politically smother the NPP-led government ahead of the General Election by cornering DIG Ravi Seneviratne and Shani Abeysekara, who currently serve as the Secretary to the Ministry of Public Security, and the Director of the Central Criminal Intelligence Analysis Bureau, respectively: claim the two individuals had previously been speculated to have acted as whistleblowers to international channels about the attack, and them being part of the NPP-regime thus to be demonstrated as an act of failure to serve justice for the victims of the attack for Gammanpila’s political benefit.
SJB leader Sajith Premadasa expresses confidence in his party’s ability to secure a parliamentary majority, stating there are no issues in collaborating with President Anura Kumara Dissanayake: emphasises the SJB has assembled a strong team with a clear vision for the country’s development, positioning the party as the most suitable choice for leadership in the current political climate.
Ex-MP Manusha Nanayakkara criticises the current government for implementing reforms without proper understanding and relying on loans, contrasting it with Ranil Wickremesinghe’s administration, which he claimed managed finances wisely: accuses the JVP of using deceit to gain power and warned that their influence would decline: further criticises JVP candidates for lacking local connections and practical leadership skills.
The Sri Lanka Podujana Peramuna (SLPP) establishes a strategic committee to support candidates and guide future decisions ahead of the general and Provincial Council elections: aims to strengthen the party’s position in the elections: SLPP national organiser, Namal Rajapaksa, announces the decision, emphasising the importance of leadership and correct guidance.
The Election Commission receives over 400 complaints related to the upcoming parliamentary election, with 58 complaints filed the day before, bringing the total to 401: These complaints pertain to violations of election laws, with no reports of election-related violence: The commission has resolved 309 of the complaints thus far, ensuring smoother conduct of the election process.
Foreign Minister Vijitha Herath highlights the immense potential in trade between India and Sri Lanka, noting India’s key role as one of Sri Lanka’s largest trading partners: emphasises growing bilateral cooperation, Indian investment in key sectors, and increasing tourism: praises India’s support during Sri Lanka’s economic crisis and debt restructuring efforts.
Sri Lanka faces high poultry feed costs due to import duties and trade controls on maize, which are driving up egg and meat prices: This policy benefits local maize farmers but hurts small poultry producers and worsens child malnutrition: Despite issuing maize import licenses, prices remain high: Vietnam’s free-trade policies contrast with Sri Lanka’s protectionism, improving nutrition and exports.
A private secretary of former State Minister Lohan Ratwatte was found dead with gunshot injuries in a house in Katugastota: The 50-year-old is suspected to have shot himself near Ratwatte’s office in Mahaiyawa and died after being admitted to Kandy’s National Hospital: Katugastota Police are investigating to determine if it was suicide or not.
The Kandy Division Criminal Investigation Bureau seizes a BMW and Prado jeep worth Rs. 60 million from former Minister Rohitha Abeygunawardena’s son-in-law’s residence in Aniwatta: The vehicles were confiscated after no legal ownership could be established: Authorities suspect they were illegally released from the port, and further investigations will be conducted by the Government Analysts.
Sri Lanka secure a five-wicket victory over West Indies in the rain-affected first ODI in Pallekele, chasing a revised target of 232 in 37 overs: Captain Charith Asalanka (77) and debutant Nishan Madushka (69) combined for a 137-run partnership after early trouble: West Indies posted 185 for 4 before rain intervened, with Sherfane Rutherford top-scoring with 74*.
October 20, Colombo (LNW): Amid claims of irregularities and favoritism in film distribution, Sri Lanka’s Media Minister, Vijitha Herath, announced plans to establish clear guidelines for releasing films.
He emphasized that the current government is committed to transparency and fairness, aiming to modernize the National Film Corporation (NFC) to better compete with the private sector.
Speaking at the appointment of new boards for the NFC and the Sri Lanka Foundation Institute, Herath highlighted the need to address past issues where films were allegedly released based on personal favors and rectify irregularities in bank loans to the film industry.
W. Prince Senadeera was appointed as the new Chairman of the NFC. Stakeholders in the local film industry criticized the NFC for inefficiency and malpractices since its inception in 1971, suggesting that these issues have hindered the sector’s growth.
Although the, 1971, 1987-1889 insurrections, three decade North East war and other minor revolts including Easter Sunday bomb attacks exerted impact on the industry, NFC’s monopoly in distribution and import of films has caused the down fall of the industry , they alleged.
As corporation was the sole distributer of films no good content was provided to cinemas resulting in patrons moving away from film going culture that was once very vibrant in the country.
When distribution partially liberalized in 2001 ., four private film distribution circuits Lanka Film Distributors Ltd. (LFD), E.A.P. Films and Theatres Ltd. (EAP), Movie Producers and Importers Ltd. (MPI), Cinema Entertainment Ltd. (CEL) entered the market in addition to the NFC have been permitted to import and distribution of films .
They urged the government to limit the NFC’s role to a regulatory body and to fully liberalize film distribution, allowing for private sector involvement without bureaucratic constraints.
The stakeholders also called for restructuring the NFC to support private exhibitors, producers, and distributors.
They argued that NFC’s past monopoly on film distribution negatively impacted the industry by failing to provide quality content, which discouraged the film-going culture. With partial liberalization in 2001, private distributors entered the market, boosting investments and revenue.
However, despite some progress, the NFC’s control over film distribution persisted, as indicated by a 2019 gazette notification that reaffirmed its dominant role. Stakeholders noted that this monopoly deterred major foreign studios from engaging with the Sri Lankan market.
They proposed that cinema hall owners be allowed to diversify their business operations to sustain profitability.
Calls were made to the Committee on Public Enterprises (COPE) to reform the NFC into a more efficient regulatory body, focusing on improving its staff’s effectiveness while reducing its direct involvement in film distribution.
October 20, Colombo (LNW): The Criminal Investigation Department (CID) has reopened the investigation into a massive sugar tax fraud that allegedly took place during the regime of former President Gotabaya Rajapaksa.
The scam, which reportedly involved manipulating import taxation in 2021, resulted in losses amounting to millions of rupees. The investigation was ordered to resume by the current President, Anura Kumara Dissanayake, following his government’s commitment to addressing this case.
The initial complaint regarding the sugar tax fraud was lodged on 21 July 2022, and the investigation started soon after. A second complaint was filed under President Dissanayake’s administration on 9 October 2023, leading to a renewed and more comprehensive investigation.
CID Director SSP Mangala Dehideniya has recently asked for the personal and official phone numbers of the President’s secretaries up to 13 October 2022, to be handed over to the Financial and Commercial Crime Investigation Division of the CID. This request aims to gather additional evidence to clarify the involvement of key individuals in the alleged fraud.
According to a high-profile CID official, who spoke to The Sunday Morning on condition of anonymity, investigations into the scam had been ongoing but faced delays.
However, a fresh probe has been launched to conduct a thorough investigation following the new complaint. The focus is to determine whether officials responsible for revising the tax rates had received any benefits from the suppliers involved.
The controversy began in October 2020 when the government eliminated import duties on several essential items, including sugar, with the intention of lowering the price to Rs. 85 per kg. Despite this move, sugar prices in the market did not drop as expected, leading to public pressure on the government to regulate wholesale and retail sugar prices.
Subsequently, the Consumer Affairs Authority (CAA) set the Maximum Retail Price (MRP) for white sugar at Rs. 90 per kg on 10 November 2020, but sugar remained unavailable at that price.
A Special Audit Report by the National Audit Office (NAO) revealed that by July 2021, sugar prices had soared to Rs. 130.52, and later to Rs. 133.24, prompting the government to reimpose price controls in September 2021.
The report highlighted that the tax reduction had caused significant financial losses to the government while benefiting a few major importers.
During the period from October 2020 to February 2021, a total of 277,715 metric tons of sugar was imported, with one company alone importing 45% of that amount, enjoying a tax benefit of around Rs. 6.23 billion.
Despite the intended relief through tax reductions, the market price of sugar continued to rise, with no government action to address the alleged sugar scam. In November 2021, tax hikes led to a sugar shortage, which some speculated was artificially created.
The CAA’s efforts to regulate prices were short-lived due to the ongoing market issues after the Special Commodity Levy (SCL) on imported sugar was raised.
Sri Lanka’s annual sugar production accounts for only 9% of its total consumption, with the majority of sugar being imported. The private sector manages sugar imports from countries like India, Turkey, China, and Vietnam.
Recently, on 2 November 2023, the Finance Minister ordered an increase in the SCL on imported sugar from 25 LKR cents per kilogram to Rs. 50, marking the first price revision since the tax reductions in 2020.
The reopening of the investigation signals a renewed focus by the government to identify the individuals responsible for the manipulation of sugar import taxes and to address the economic losses suffered due to the scam.
October 20, Colombo (LNW): Over 200 audit reports presented by the Auditor General in Sri Lanka, highlighting instances of corruption, financial misappropriation, and irregularities in state institutions, have been discarded without any action taken against the involved perpetrators.
According to sources within the department, these reports have effectively been sent to the recycle bin, leaving the wrongdoings unaddressed and the financial losses to the state unrecovered.
The reports included findings on significant financial irregularities in recent high-profile transactions, particularly in the importation of essential commodities, resulting in a loss of more than Rs. 40 billion to the government.
Despite these substantial losses to the state coffers, no steps have been taken to punish the officials responsible or to recover the misappropriated funds, as noted by several senior officials of the Auditor General’s Department.
One of the main reasons for this inaction, according to a high-ranking official and member of the Sri Lanka Audit Service Association (SLASA), is the department’s lack of legal authority to enforce its recommendations.
The official, speaking on condition of anonymity, emphasized that without the power to initiate legal proceedings, the Audit Service’s efforts to identify and report financial irregularities remain ineffective. The absence of enforcement capabilities means that their hard work often goes unrecognized, with their findings relegated to the backburner.
While the audit reports are intended to be reviewed by Parliamentary committees like the Committee on Public Enterprises (COPE) and the Committee on Public Accounts (COPA), there has been no substantial follow-up action to address the findings.
The implementation of these committees’ recommendations falls under the purview of Ministry Secretaries, who serve as the Chief Accounting Officers. However, due to their need to align with the interests of political authorities, these officers often fail to take concrete action on audit recommendations, according to department insiders.
The situation has deteriorated further since the disbanding of the National Audit Service Commission, which was established under the 19th Amendment to the Constitution and functioned from 2016 to 2020.
Although the commission did not have strong constitutional safeguards, it did possess limited authority to take disciplinary action against corrupt officials. Its dissolution has left a significant gap in the oversight and accountability framework for state financial practices.
In light of these challenges, the Sri Lanka Audit Service Association has called for urgent legal reforms to empower the Auditor General’s Department and restore the functions of the National Audit Service Commission.
They suggest either amending the existing outdated laws or introducing a new audit bill in Parliament to grant these institutions the necessary powers to combat economic crimes effectively.
The absence of an independent and empowered auditing body means that significant financial mismanagement within state institutions goes unpunished, undermining public trust in the government’s ability to maintain financial integrity.
Addressing these gaps in the legislative framework is seen as crucial to holding corrupt officials accountable and recovering state assets lost to misappropriation and fraud.
October 20, Colombo (LNW): A surge of 58 new complaints has brought the total number of grievances related to the forthcoming parliamentary elections to over 400, the Election Commission has confirmed.
Between September 26 and October 19, 401 complaints have been officially lodged.
Of these, 158 were registered with the National Centre for Election Complaint Management, whilst the remaining 243 were submitted through District Centres.
All of the reported incidents have been categorised as breaches of election laws, with no instances of electoral violence recorded so far.
The complaints cover a range of issues, including potential breaches of campaign finance regulations, misuse of public resources, and irregularities in the election process.
The Election Commission stated that it is committed to addressing each case swiftly, ensuring the integrity of the election is upheld.
Further measures to enhance monitoring and law enforcement during the campaign period are expected to be put in place to minimise further violations.
October 20, Colombo (LNW):A private secretary to former State Minister Lohan Ratwatte was discovered dead in a residence in Katugastota earlier today (20), police confirmed.
The body of the 49-year-old man, a resident of Werellagama, was found with gunshot wounds, and a firearm was located near the scene.
Authorities have yet to determine whether the death was the result of suicide or if foul play is involved.
Investigations are currently underway to clarify the circumstances surrounding the incident.
The deceased had served as a private secretary to Lohan Ratwatte during his tenure as a state minister.
The local police are expected to release further details as the inquiry progresses, with forensic analysis and witness statements forming a critical part of the investigation.
October 20, Colombo (LNW): As the final negotiations for the Global Plastics Treaty approach, the United Nations is expected to focus on tackling plastic pollution from maritime disasters, such as the devastating Xpress Pearl incident.
The final discussions will take place in November in Busan, South Korea, as part of efforts to establish the first comprehensive global treaty aimed at addressing plastic waste.
UN Environment Programme (UNEP) Executive Director Inger Andersen, speaking ahead of the negotiations, indicated that the treaty would prioritise measures to “prevent” nurdle spills, a type of microplastic pollution that has wreaked havoc on marine ecosystems.
Nurdles, which are small plastic pellets used in manufacturing, were heavily released into Sri Lankan waters during the Xpress Pearl disaster, causing significant long-term damage to the marine environment.
Although Andersen clarified that the treaty may not directly address specific past incidents like the Xpress Pearl, she noted that its language would target broader concerns related to “legacy plastics” and “accidental releases.”
This signals a strong commitment from the United Nations to preventing future plastic pollution from maritime sources.
The Global Plastics Treaty will mark a milestone in international environmental policy, bringing together member states to confront the growing threat of plastic pollution.
It is expected to include measures aimed at reducing plastic waste across global supply chains, as well as addressing accidents like nurdle spills, which have previously lacked international regulation.
Environmental advocates hope that the treaty’s outcome will lead to stricter preventive measures and greater accountability for industries contributing to plastic waste.
With global awareness of plastic pollution on the rise, the upcoming treaty discussions represent a crucial step towards safeguarding marine environments and promoting sustainability.
I happened to read the attached article (Read the Article here) titled “Bondholders could make $14bn from emerging market restructurings, says Debt Justice” published in the UK Financial Times, yesterday, based on research findings by Debt Justice, a UK debt campaigner.
These findings are made on expected risks and returns of foreign bond restructuring of several countries including Sri Lanka mediated by the IMF under its bailout programmes.
Therefore, the purpose of this article is to share the highlights of the research, mainly on undue restructuring profit to bondholders, as published in the Financial Times as this research provides a good eye-opener to assess the benefits of the ongoing debt restructuring methodology to the country.
However, no attempt is made to comment on Sri Lankan debt restructuring progress or profit/loss as relevant official agreements or facts approved by the Parliament are not yet available.
Highlights of the article
An estimated debt relief of $30 bn in the years ahead for the countries in debt crisis.
An estimated profit of $14 bn to bondholders from restructuring of same debt.
Assumptions for $ 14 bn profit estimation to bondholders are as follows.
Present bondholders comprise 50% in original investment at face value and other 50% who bought bonds at lower market prices pending default.
Restructured bonds will be repaid. Therefore, profit is a theoretical estimate.
Estimated profit reflects both high interest payment before default and benefit of buying bonds at low market prices after default.
Profit will be as low as $1.9 bn if all restructured bonds had been bought at the face value and attracted no upside payments.
Profit will be as high as $ 26 bn if all restructured bonds had been bought at low market prices and attracted the maximum possible upside payment.
A further sizable gain to investors/bondholders over time if governments avoid further defaults in years ahead.
Such profits to bondholders could be more than a third of original bondholders’ investment value (generally the face value).
Therefore, defaulted countries are not receiving a sufficient debt relief or reduction in their borrowing.
These countries do not have enough negotiating powers to get sufficient relief to avoid restructuring in future.
Therefore, there are dangers of having to restructure bonds again in future.
Bondholders have got a substantial upside from deals with Sri Lanka and Zambia.
Provision of contingent payments to bridge disagreements over official projections of post-restructured path of economies and to continue negotiations.
Rewarding bondholders with higher interest payment if their economies outperform targets in the years ahead.
Some of countries such as Sri Lanka to reduce interest payments in the event of future economic troubles.
Remarks
Country authorities have been painting a rosy picture of debt sustainability to be achieved through ongoing debt restructuring gains, especially foreign debt, under the IMF loan programme.
However, research findings listed above show substantial costs as well as dangers of having to restructure debt again in future. Therefore, it is doubted whether those who hanled debt rework genuinely assessed and balanced the risks and returns to respective countries in long-term interests.
Serious concerns are already raised by some political leaders of Sri Lanka over a possible re-default in 2028 when repayments start under the restructured terms.
Another public concern is that those who raised debt under unsustainable terms and mismanaged debt are dealing with default and restructuring of same debt that accrues further benefits to creditors (see above highlights). Therefore, debt restructuring governance faces serious lapses.
Warren Buffet, a well known, global investor, once stated that creditors who lent unsustainably must bear the loss and managers who borrowed unsustainably must be sacked. This view made irrelevant to business companies is also applicable to any debt whether private or public.
Grave mismanagement of public debt in Sri Lanka is popular at political platforms. However, no leaders seem to commence investigating and addressing relevant public concerns, other than continuing to borrow in rising amounts under same systems that have made debt unsustainable and unproductive. The fact that debt is a heritage in succession is a great relief to those who govern the country and is a great privilege to them to compete for gaining the government power.
Restructuring of debt alone without restructuring or replacing of systems and managers that raised and mismanaged debt to default is the very source of the danger of the default again in the years ahead. Therefore, talks over re-emergence from the the bankruptcy immediately after debt restructuring would be futile.
(This article is released in the interest of participating in the professional dialogue to find out solutions to present economic crisis confronted by the general public consequent to the global Corona pandemic, subsequent economic disruptions and shocks both local and global and policy failures. All are personal views of the author based on his research in the subject of Economics which have no intension to personally or maliciously discredit characters of any individuals.)
P Samarasiri
Former Deputy Governor, Central Bank of Sri Lanka
(35 years of staff grade service in the Central Bank, a former Director of Bank Supervision, Assistant Governor, Secretary to the Monetary Board and Compliance Officer of the Central Bank, Former Chairman of the Sri Lanka Accounting and Auditing Standards Board and Credit Information Bureau, Former Chairman and Vice Chairman of the Institute of Bankers of Sri Lanka, Former Member of the Securities and Exchange Commission and Insurance Regulatory Commission and the Author of 13 Economics and Banking Books and a large number of articles published.)
October 20, Colombo (LNW): Over the past 24 hours, four individuals, including a woman, tragically lost their lives in separate road accidents across different regions of Sri Lanka, Police said.
The incidents occurred in Moronthuduwa, Kopai, Karandeniya, and Kadawatha, marking a concerning rise in fatal road crashes.
In Moronthuduwa, a 21-year-old motorcyclist lost his life after losing control of his bike on the Moronthuduwa-Horana road.
The young man collided with a culvert, sustaining severe injuries. Despite being rushed to Gonaduwa Hospital, he succumbed to his injuries shortly after.
In another incident in Jaffna’s Kopai area, a three-wheeler struck a 68-year-old woman from Kattapirai while she was crossing the road.
The victim was immediately transported to Jaffna Hospital, where she was treated for critical injuries.
In Borakanda, tragedy struck when an 81-year-old cyclist was involved in a fatal head-on collision with a motorcycle.
The elderly man sustained life-threatening injuries and passed away at the scene of the accident.
Meanwhile, on the Kandy-Colombo main road near Kadawatha, a 74-year-old motorcyclist lost his life when a lorry struck his vehicle.
The collision caused the man to fall under the rear wheels of the lorry, resulting in his death on the spot.
The Police have urged motorists to exercise caution and adhere to traffic regulations to avoid such tragic accidents, especially given the recent increase in road fatalities across the country.
October 20, Colombo (LNW): The closing ceremony of a three-month STEM teacher-training initiative, funded through Indian grant assistance, was recently held at the Ministry of Environment, Wildlife, and Plantation Infrastructure in Sri Lanka.
The programme was designed to improve the quality of education in plantation areas by equipping teachers with advanced knowledge in key STEM subjects.
The event saw the participation of several distinguished figures, including the Indian High Commissioner to Sri Lanka, Santosh Jha, and senior officials from the Ministry of Education and Science and Technology, as well as the Ministry of Environment.
This initiative, a response to a request from the Sri Lankan Government, was part of India’s multi-sectoral grant of INR 750 million, commemorating 200 years since the arrival of the Indian-origin Tamil community in Sri Lanka.
The programme commenced in July 2024 with the arrival of 19 Indian educators specialising in STEM (Physics, Chemistry, Mathematics, English, and Biology).
After an orientation hosted by Sri Lanka’s National Institute of Education, these teachers began their work in plantation schools, offering training to over 2,000 local teachers across 40 centres in Central, Uva, Sabaragamuwa, and Western provinces.
Spanning 10 weeks, the initiative aimed to modernise teaching approaches and enhance the quality of STEM education in under-resourced schools.
The trained teachers and schools expressed great satisfaction with the programme’s impact and called for its continuation in the future.
During the closing ceremony on 18th October 2024, Secretary of the Ministry of Education, Mrs. J.M. Thilaka Jayasundara, praised the effectiveness of the programme, noting its significant contribution to improving the education system in the region.
She extended heartfelt thanks to the Indian Government for its support.
Indian High Commissioner Santosh Jha remarked that this teacher-training initiative further strengthened the historic ties between India and Sri Lanka, adding to a long list of India-supported development projects in sectors such as education, housing, healthcare, and renewable energy.
He highlighted that such collaborations reflect India’s commitment to supporting Sri Lanka’s national priorities and positively influencing the everyday lives of its people.
