The lawyers of Vasudeva Nanayakkara have served notice on the AG, IGP, Deputy IGP, Chairman of the Commission to Investigate Allegations of Bribery and Corruption and the Director General of the Securities and Exchange Commission for failing to take appropriate action according to the law after the Supreme Court ruled against the Privatisation of Lanka Marine Services Ltd (LMS). The Supreme Court (SC) last week gave JKH time till 10 September to hand over its operations to the Sri Lanka Ports Authority. However, public officials named by court are yet to be brought to book and Nanayakkara’s lawyers have asked the AG, IGP, Deputy IGP, Chairman of the Commission to Investigate Allegations of Bribery and Corruption and the Director General of the SEC requesting them to take necessary action irrespective of the personalities involved. His lawyers said that the SC ruling warranted immediate action in terms of Offences Against Public Property Act No. 12 of 1982 where ‘mischief to public property, theft and robbery of public property, misappropriation or criminal breach of trust of public property, Cheating, forgery or falsification in relation to public property and attempting to commit any of these offences’ are punishable offences. They said that the SC judgment issued in July stated that all parties to the proceedings had to take necessary action on the basis of the court’s findings. The SC ruled that Dr. P. B. Jayasundera, Secretary to the Treasury and JKH had worked in collusion to give illegal advantages to JKH against the public interest and that he had acted arbitrarily and exceeded his authority. The lawyers said that if the above officials continued to be indifferent to the findings of the SC and its Judgment and failed to take action, they would, on behalf of Nanayakkara, initiate contempt proceedings in the SC. Director General of the SEC, Channa de Silva told the Island Financial Review, that the SEC had sought advice of the Attorney General as to how the SEC should proceed. Chitta Ranjan De Silva P.C., the Attorney General, said that the Bribery Commission was still investigating the LMS privatisation deal. Ameer Ismail, Chairman of the Commission to Investigate Allegations of Bribery and Corruption said that investigations to the LMS deal began after the parliamentary Committee on Public Enterprises (COPE), headed by Wijeyadasa Rajapakse, released its first report in 2007, even before the matter was taken before the SC by Nanayakkara. He told the Island Financial Review that the investigation was ongoing. The SC also ruled that JKH had received unlawful tax concessions. Last week JKH released a statement where it said a tax liability amounting to Rs. 750 million based on a normal tax rate was calculated by the Department of Inland Revenue. "Based on opinions from independent legal counsel and tax consultants, it is LMS’ view that the supply of bunkers to foreign vessels is an export and therefore income is liable for tax at 15 per cent as provided in the Inland Revenue Act. At the 15 per cent rate, the additional tax liability is Rs. 384 million against the IRD intimation. A further Rs. 137 million of income tax at 15 per cent falls due for the year 2007/08," it said. Additional customs duty, asset impairment (if LMS does not continue in business) and other costs associated with the vacating of the premises is estimated at Rs. 187 million. JKH said that the impact on the consolidated income statement and / or reserves of the group as a result of the additional tax liability, additional customs duty, asset impairment (if LMS does not continue in business) and other costs associated with the vacating of the premises is estimated at Rs. 704 million (consolidated at 99.44 per cent). "If LMS’ export status is not immediately accepted, then a further Rs. 606 million will have to be treated as a contingent liability till the matter is finally resolved in terms of the Inland Revenue Act." Meanwhile, the government said last week that eight companies will be able to conduct bunkering operations where LMS held a virtual monopoly. |
