The Government Accountability Project (GAP), a 30-year-old nonprofit public interest group in the US that promotes government and corporate accountability based in Washington D.C, and has published reports on unlawful privatizations in Sri Lanka, this week wrote on the ‘shocking decision’ handed down on September 24 by the Supreme Court of Sri Lanka, allowing former Treasury Secretary P.B. Jayasundera to return to public office. The GAP report states that the Supreme Court overturned its own previous ruling allowing Jayasundera to return to public office despite his orchestration of the unlawful privatization of the former public enterprise Lanka Marine Services (LMS) in August 2002.
The report states that in the wake of the decision handed down by former Chief Justice Sarath N. Silva on July 21st 2008, Jayasundera filed an affidavit with the Court in which he promised to refrain from taking any government position in the future. The court accepted this commitment after ruling that Jayasundera had been party to an alleged fraud that awarded 90% of the shares of LMS to John Keells Holdings (JKH).
At the time of the sale, the report states that Jayasundera had been the Chairman of the Public Enterprises Reform Commission (PERC) of Sri Lanka and the Court ruled that his conduct had been systematically biased in favour of JKH. In its 2008 decision, the Court reversed the privatization of LMS and declared that Jayasundera had colluded with S. Ratnayake, the current Chairman of JKH to provide the corporation with financial advantages that were contrary to the public interest. The GAP report states that evidence clearly shows that the value of LMS was artificially lowered to the advantage of the buyer, JKH and the disadvantage of the seller, the government.
A year after committing himself to refrain from serving again in government, Jayasundera filed a motion with the Supreme Court requesting that he be allowed to return to a high-level position in the public service. He had been requested by the President to accept the post of Secretary to the Treasury and Secretary to the Ministry of Finance.
The report states that on July 27th 2009, Nihal Sri Ameresekere, former PERC Chairman, filed an affidavit with the Court showing that at no time had Jayasundera contested the allegations that he had operated as Treasury Secretary and Chairman of PERC in a manner contrary to the public interest. Ameresekere pointed out that Jayasundera’s own affidavit contained only vague assertions of his integrity and ethics and that Jayasundera’s commitment to ethical conduct was factually contradicted by transactions to which he had been a part in the privatization of LMS.
In its September 24th ruling on Jayasundera’s motion, the GAP report states that the Supreme Court did not contest the facts in Ameresekere’s affidavit, which still stands. Nor has the fine paid by Jayasundera for misconduct been refunded.
On September 25th, Ameresekere filed a motion requesting that the Court prevent Jayasundera from returning to public office until the criminal investigation of the privatization of LMS is concluded. The GAP report states that if and when Jayasundera assumes his new public position, it will mean that no government official responsible for the unlawful sale of a revenue-producing public asset at an artificially low price to a private corporation has been meaningfully penalized for his conduct. Only the minimal fine paid by Jayasundera remains as a symbolic sanction.
Jayasundera argued that his services are required by the government to help to implement new development projects in the north of the country. Such an assignment returns him to a position where it is difficult to monitor the use of public funds and the potential for abuse of the public trust is high.
GAP said it ‘gratefully acknowledged the research and contribution to this report of Consultants21 Limited, Colombo, Sri Lanka.”