Socio-Political Realities Hilton Hotel Fiasco & Ad Hominem Legislation Expropriation Law: Fraud on the State & the People ! Lame Duck Political Leaders ? Abuse of Legislative Process ! Judicial Independence & Bias ?

By Nihal Sri Ameresekere

`Socio-political realities' at the highest levels in society are lucidly revealed by the Author documenting real life experiences, in interacting with Presidents, Prime Ministers and Ministers, demonstrating their subservience to international pressures by influential powerful countries, and their shameless shielding of fraudulent/corrupt Ministers/Officers. Author discloses non-enforcement of the rule of law, even by Attorney Generals, against those affluent and powerful, eventhough the rule of law is the cornerstone of democracy. There is shocking revelation, of how Japanese Government, through Diplomats, pressurized to settle and cover-up a colossal fraud, blatantly perpetrated on a country and impoverished people, to prevent criminal prosecution thereof; even inducingly offering to negotiate with a terrorist organization, to resolve the issue of armed terrorism, ironically created by social injustice, including economic terrorism. Constitutional Minister, President's Counsel, charged for fraud utters blatant falsehoods. Justice Minister and Foreign Minister, President's Counsel, both scholarly alumni of Oxford University, camouflages to whitewash fraud, taking duplicitous stances. This Book is in two Sections, one dealing with `Political and Diplomatic Hypocrisy', and the other on an `Ad Hominem Legislation - Expropriation Law', enacted in violation of UN Universal Declaration of Human Rights, and ultra-vires the Constitution. How the country's highest judiciary deals with challenges to the perverse legislative process is revealing, with shocking disclosure of the Chief Justice's husband being given plum political office, with a scandalous controversy exploding in the public domain; just as the Author applies for a review of the pre-enactment Determination by Chief Justice for such Statute, as having been made per-incuriam and ultra-vires the Constitution, adducing additional grounds of perceived bias, upon which Their Lords of Appeal exercising inherent jurisdiction, in similar circumstances, rescinded a previous Judgment of the House of Lords in extradition proceedings re - Chilean President Pinochet.

• Language: English
• Publisher: AuthorHouse UK
• Release date: Jul 3, 2012
• ISBN: 9781477213940

Nihal Sri Ameresekere

Nihal Sri Ameresekere, F.C.A. (Sri Lanka), F.C.M.A. (United Kingdom), C.M.A. (Australia), C.F.E. (United States), is a Member, International Consortium on Governmental Financial Management and a Member, International Association of Anti-Corruption Authorities. Former Advisor, Ministry of Finance and Chairman, Public Enterprise Reforms Commission Sri Lanka. Has functioned as Senior Consultant on World Bank and USAID funded public sector economic reform projects. A multi-disciplinary professional, exposed to private and public sectors, and a public interest activist, with wide international exposure. Not a legal professional, yet has appeared in person before the Supreme Court, successfully advocating public interest litigations. He is a forensic accounting investigative specialist. Has dispassionately spoken out on matters of national and public interest. Ardently upholds the sacred precept, that public property is solely of the people, and managed in fiduciary trust by governments; transgression of which he has committedly combated. Has published exposés into transactions carried out, under the aegis of IMF, World Bank and ADB privatization agenda, incisively analyzing real case studies, exposing the shockingly dubious manner, in which privatizations have been perpetrated by the highest levels, disclosing the alarming indifference of international developmental agencies, completely eroding public confidence, crucial for meaningful privatization, to foster a free economy, characteristic with transparency. He emphasizes that `economic terrorism' germinates `armed terrorism', resulting in violation of human rights. `Concerns of humanity, transcends interests of nationality', he propounds; and that poverty alleviation schemes merely replace, at the cost of the poor, their own resources pillaged and plundered by socio-politically influential. Politicians vigorously campaign on election platforms, vociferously decrying fraud and corruption, vowing stringent action thereon. However, upon assuming office of government, get bogged down in the very quagmire of fraud and corruption, invariably peddled by powerful multinationals - as lucidly demonstrated through a series of other publications on his real life experiences thereon.

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SOCIO-POLITICAL

REALITIES

HILTON HOTEL FIASCO

&

AD HOMINEM LEGISLATION

EXPROPRIATION LAW

FRAUD ON THE STATE & THE PEOPLE!

LAME DUCK POLITICAL LEADERS?

ABUSE OF LEGISLATIVE PROCESS!

JUDICIAL INDEPENDENCE & BIAS?

Nihal Sri Ameresekere

Image2888.JPG

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© 2012 Nihal Sri Ameresekere. All rights reserved.

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Published by AuthorHouse 6/28/2012

ISBN: 978-1-4772-1393-3 (sc)

ISBN: 978-1-4772-1394-0 (e)

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Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

Contents

DEDICATION

Chapter 1 JULY 1983 RIOTS ‘PUSHED’ PRESIDENT J.R. JAYEWARDENE TO EXPEDITE COLOMBO HILTON HOTEL

Chapter 2 PRESIDENT R. PREMADASA DIRECTED ACTION ON FRAUD AGAINST THE STATE, BUT LATER MADE A VOLTE-FACE

Chapter 3 JAPANESE DIPLOMACY-QUID PRO QUO WITH TERRORISM !

Chapter 4 CONSTITUTIONAL MINISTER K.N. CHOKSY P.C. M.P. CHARGED FOR FRAUD AGAINST THE STATE

Chapter 5 POLITICAL DISASTER COMPELS PRESIDENT D.B. WIJETUNGA TO INTRIGUINGLY INTERVENE

Chapter 6 PRIME MINISTER RANIL WICKREMESINGHE PLAYS ‘JEKYLL AND HYDE’

Chapter 7 PRESIDENT CHANDRIKA BANDARANAIKE KUMARATUNGA BLOWS HOT& COLD!

Chapter 8 MALICIOUS CONDUCT OF JUSTICE MINISTER G.L. PEIRIS

Chapter 9 BOMBASTIC FOREIGN MINISTER LAKSHMAN KADIRGAMAR DUMBFOUNDED !

Chapter 10 RULE OF LAW UNDER PRESIDENT MAHINDA RAJAPAKSE SHEER BUNKUM

Chapter 11 APPLICATION FOR JUDICIAL RE-STRUCTURE OF HOTEL DEVELOPERS (LANKA) LTD.

Chapter 12 CHALLENGES TO AD HOMINEM LEGISLATION

Chapter 13 PROCEEDINGS IN THE SUPREME COURT

Chapter 14 AMENDED PETITION FOR REVIEW& RE-EXAMINATION OF SUPREME COURT SPECIAL DETERMINATION

Chapter 15 SUBMISSIONS MADE & JUDGMENT OF THE SUPREME COURT

Chapter 16 APPLICATION FOR REVIEW& RE-EXAMINATION BY A FULLER BENCH OF THE SUPREME COURT

Profile

DEDICATION

To my father Sirisena, who paved the way for me to acquire knowledge, my mother Clair, who ingrained righteous values in me, my wife Lilamani, who steadfastly supported espousing the cause of the public interest, my children, Dhananjana, Dheeshana and Sharvajana, who unflappably faced social trauma consequent to my public interest litigations, my dedicated and tireless staff, who loyally maintained confidentiality, persons known and unknown, who supported me and stood by me.

PUBLICATIONS BY THE AUTHOR

45526.jpg IMF, World Bank & ADB Agenda on Privatisation

Vol. 1: ‘Pillage of the Plantations’ in Sri Lanka

Vol. 2: ‘Dubious Deals’ in Sri Lanka-What a Paradox !

Vol. 3: Colombo Port Bunkering Privatisation

Annulled as Illegal & Fraudulent by Supreme Court

-with flawed Valuation by DFCC Bank,

involving John Keells Holdings, an UN Global Compact Co.

Vol. 4: Sri Lanka Insurance Privatisation

Annulled as Unlawful & Illegal by Supreme Court

- handled by PricewaterhouseCoopers &

Ernst & Young, Chartered Accountants

45528.jpg Colombo Hilton Hotel Construction-Fraud on Sri Lanka Government

Vol. 1: Sri Lanka’s First Derivative Action in Law

Vol. 2: Criminality Exposed, but perversely ‘Covered-up’!

Vol. 3: Settlement of a Fraud

Vol. 4: Political & Diplomatic Hypocrisy (Part of Book ‘Socio-Political Realities’)

Derivative / Hedging Deals

by Citibank, Standard Chartered Bank, Deutsche Bank,

with Sri Lanka Government’s Petroleum Corporation-Dubious & Illegal?

45532.jpg Overseas Corporate Structures, which hide ‘Real Owners’

Foreign Business empire of a Sri Lankan Entrepreneur ?

45534.jpg United Nations Convention Against Corruption

to Combat Fraud & Corruption-a Cancerous Menace

with mere Rhetoric subverts UN Convention

45536.jpg Transparency & Public Accountability

Fiscal Mismanagement & lack of Public Accountability

Case Study-Sri Lanka, a Country under the purview of IMF, World Bank, ADB

45538.jpg In Pursuit of Justice

Frustrated legal proceedings in the pursuit of justice

45540.jpg Rule of Law & Democracy ?

45542.jpg Political Realities !

45544.jpg Judiciary sans Justice ?

(Previously titled-’In Pursuit of Justice’)

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United Nations Convention Against Corruption

The United Nations General Assembly on 31st October 2003 adopted the Convention Against Corruption, with Antonio Maria Costa, then Executive Director, United Nations Office on Drugs & Crimes (UNODC) hailing it as-"a true global response to the global challenge posed by corruption worldwide".

Then Secretary-General United Nations, Kofi Annan said thus-Corruption hurts the poor disproportionately by diverting funds intended for development, undermining a government’s ability to provide basics services, feeding inequality and injustice, and discouraging foreign investment and aid.

The United Nations Convention against Corruption-www.unodc.org, entered into force on 1 4th December 2005. Sri Lanka was one of the first State Parties to have ratified the Convention on 31st March 2004.

Preamble of the Convention

The States Parties to this Convention,

Concerned about the seriousness of problems and threats posed by corruption to the stability and security of societies, undermining the institutions and values of democracy, ethical values and justice and jeopardizing sustainable development and the rule of law,

Concerned also about the links between corruption and other forms of crime, in particular organized crime and economic crime, including money-laundering,

Concerned further about cases of corruption that involve vast quantities of assets, which may constitute a substantial proportion of the resources of States, and that threaten the political stability and sustainable development of those States,

Convinced that corruption is no longer a local matter but a transnational phenomenon that affects all societies and economies, making international cooperation to prevent and control it essential,

Convinced also that a comprehensive and multidisciplinary approach is required to prevent and combat corruption effectively,

Convinced further that the availability of technical assistance can play an important role in enhancing the ability of States, including by strengthening capacity and by institution-building, to prevent and combat corruption effectively,

Convinced that the illicit acquisition of personal wealth can be particularly damaging to emocratic institutions, national economies and the rule of law,

Determined to prevent, detect and deter in a more effective manner international transfers of illicitly acquired assets and to strengthen international cooperation in asset recovery,

Acknowledging the fundamental principles of due process of law in criminal proceedings and in civil or administrative proceedings to adjudicate property rights,

Bearing in mind that the prevention and eradication of corruption is a responsibility of all States and that they must cooperate with one another, with the support and involvement of individuals and groups outside the public sector, such as civil society, non-governmental organizations and community-based organizations, if their efforts in this area are to be effective,

Bearing also in mind the principles of proper management of public Affairs and public property, fairness, responsibility and equality before the law and the need to safeguard integrity and to foster a culture of rejection of corruption, Commending the work of the Commission on Crime Prevention and Criminal Justice and the United Nations Office on Drugs and Crime in preventing and combating corruption,

Recalling the work carried out by other international and regional organizations in this field, including the activities of the African Union, the Council of Europe, the Customs Cooperation Council (also known as the World Customs Organization), the European Union, the League of Arab States, the Organisation for Economic Cooperation and Development and the Organization of American States,

Taking note with appreciation of multilateral instruments to prevent and combat corruption, including, inter alia, the Inter-American Convention against Corruption, adopted by the Organization of American States on 29 March 1996, the Convention on the Fight against Corruption involving Officials of the European Communities or Officials of Member States of the European Union, adopted by the Council of the European Union on 26 May 1997, the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, adopted by the Organisation for Economic Cooperation and Development on 21 November 1997, the Criminal Law Convention on Corruption, adopted by the Committee of Ministers of the Council of Europe on 27 January 1999, the Civil Law Convention on Corruption, adopted by the Committee of Ministers of the Council of Europe on 4 November 1999, and the African Union Convention on Preventing and Combating Corruption, adopted by the Heads of State and Government of the African Union on 12 July 2003,

Welcoming the entry into force on 29 September 2003 of the United Nations Convention against Transnational Organized Crime,

Have agreed as follows.

Articles of the Convention

(United Nations Convention Against Corruption-Mere ‘rhetoric’ to combat Fraud and Corruption, only subverts United Nations Convention-by same Author)

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When I saw the effect that corruption and kick-backs were having on our business and our ability to compete, I determined that it had to stop. Nothing so encourages in efficiency and mediocrity, nor so discourages talent and endeavour.

Lee Kuan Yew

From The Dhammapada* of Lord Gauthama

Buddha

about 2550 years ago …….

Well done is that action of doing which one repents not later, and the fruit of which one, reaps with delight and happiness.

Should a person do good, let him do it again and again. Let him find pleasure therein, for blissful is the accumulation of good.

An evil deed is better left undone, for such a deed torments one afterwards. But a good deed is better done, doing which one repents not later.

Those who know the essential to be essential and the unessential to be unessential, dwelling in right thoughts, do arrive at the essential.

Those who discern the wrong as wrong and the right as right—upholding right views, they go to realms of bliss.

Those who are ashamed of what they should not be ashamed of , and are not ashamed of what they should be ashamed of—upholding false views, they go to states of woe.

Those who imagine evil where there is none, and do not see evil where it is—upholding false views, they go to states of woe.

Easy is life for the shameless one who is impudent as a crow, is backbiting and forward, arrogant and corrupt.

One who, while himself seeking happiness, oppresses with violence other beings who also desire happiness, will not attain happiness hereafter.

All tremble at violence; all fear death. Putting oneself in the place of another, one should not kill nor cause another to kill.

Neither in the sky nor in mid-ocean, nor by entering into mountain clefts, nowhere in the world is there a place where one may escape from the results of evil deeds.

There never was, there never will be, nor is there now, a person who is wholly blamed or wholly praised.

Contemporary Realities

Case Studies in a Third World Developing Country

Revealing socio-political realities ……….

Incisive insights unraveling the socio-political realities in a third world developing country. The duplicitous hypocrisy of the developed world and international developmental agencies vis-a-vis the just and equitable enforcement of the ‘rule of law’. The dubious management of the resources of the people, which are held in trust, on their behalf, by democratic governments or even by Kings.

" ….. The ruler’s trusteeship of the resources of the State which belong to the people is a part of the legal heritage of Sri Lanka dating back at least to the third century BC as pointed out by Justice Weeramantry in his separate opinion in the International Court of Justice in the Danube Case, by quoting the sermon of Arahath Mahinda to King Devanampiya Tissa as recorded in the Great Chronicle-Mahawamsa*"-June, 2009, Supreme Court of Sri Lanka

# With the cancerous menace of rampant fraud and corruption, does not the unbridled pillage and plunder of the resources of the already impoverished vast majority of poor people, by few persons socio-politically powerful, influential and affluent, further impoverish them ?

# Is it not a curious paradox, that schemes and designs to replace, such pillaged and plundered property of the poor people, through ‘poverty alleviation programs’, ironically are financed from the very funds of the poor people or by debts to be re-paid by them or their future generations ?

# Despite the adoption in December 2005 of the United Nations Convention Against Corruption, specifically identifying as culprits, ‘politically exposed persons’, do not such persons unabashedly continue to peddle fraud and corruption, and are shielded through socio-political influences, and publicly sanctified by religious leaders seeking the ‘limelight’ ?

# Should not the pillage and plunder of the property of the poor people, referred to as ‘economic terrorism’, perpetrated by ‘economic terrorists’, condemned internationally in contemporary times, be first dealt with, as the root cause for the germination of terrorism ?

# Denying the impoverished helpless vast majority of poor people equitable social justice, does it not ultimately lead to disillusionment, alienation, frustration, social unrest, insurrection and justifiable rebellion?

# Does not therefore, the pillage and plunder of the resources of the poor people, consequently result in armed struggles and armed terrorism, with brutal counter offensives by the international community, to destroy such terrorism ?

# Ironically, do not such brutal counter-offensives, with the utilization of further resources of the poor people, which consequently give rise to despicable violations of human-rights, with concerns of humanity righteously transcending parochial interests of nationality, justifiably raise international concerns, however, at a very belated stage?

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POLITICAL & DIPLOMATIC HYPOCRISY

Chapter 1

JULY 1983 RIOTS ‘PUSHED’ PRESIDENT J.R. JAYEWARDENE

TO EXPEDITE COLOMBO HILTON HOTEL

Colombo Hilton Hotel mooted in 1980 !

The Colombo Hilton Hotel Project was mooted since 1980 by Cornel & Co. Ltd., having on 19th January 1980 entered into a Management Agreement, with the Hilton International Co., of Waldorf-Astoria Hotel, 301, Park Avenue, New York, New York 10022, USA. In terms of the said Management Agreement Hilton International agreed to render assistance in planning, building, furnishing, equipping and decorating such Hotel, and managing and operating the same. The Preamble of the said Hilton Management Agreement is scanned below-viz:

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Pursuant thereto, in July 1980 Cornel & Co. Ltd., caused Japanese Architects, Kanko Kikaku Sekkeisha Yozo Shibata & Associates to prepare the Project Plan for the proposed Colombo Hilton Hotel, to be constructed at a pre-identified location at the Echelon Square in the heart of the City of Colombo, Sri Lanka. In terms of the aforesaid Management Agreement this Project Plan was formulated with Technical Assistance rendered by Hilton International, USA.

Since then, several endeavours were made to identify sources to raise the finances required for the implementation of the Colombo Hilton Hotel Project. Finally on 30th March 1983, Mitsui & Co. Ltd., and Taisei Corporation, both of Japan, entered into a Preliminary Agreement with Cornel & Co. Ltd., to finance and implement the Colombo Hilton Hotel Project ‘on a turn-key fixed price basis’, as per the above Project Plan, which had been prepared by Kanko Kikaku Sekkeisha Yozo Shibata & Associates of Japan.

A new Company, Lanka-Japan Hotel s Ltd., which was to be the owning Company of the Colombo Hilton Hotel was incorporated on I5th March 1983, and its name was later changed to Hotel Developers (Lanka) Ltd., (HDL). The Subscribers to the Memorandum & Articles of the new Company were the following persons:

C.L. Perera

T.P. Perera

Nihal Sri Ameresekere (the Author)

M. Radhakrishnan

F.G.N. Mendis

M. Charmaine V. Mendis

T.A. Kreltszheim

Disastrous aftermath of July 1983 communal riots results in implementation of Colombo Hilton Hotel

It was during this nascent stage of promotion of the Colombo Hilton Hotel Project, that in July 1983 the heinous barbaric communal riots broke out in Sri Lanka, particularly in the City of Colombo, tarnishing the international name and standing of Sri Lanka, and thereby adversely causing a major set-back to the then booming tourism industry, and direct foreign investments being attracted into Sri Lanka, with the establishment in 1978 of the Board of Investment of Sri Lanka.

In the aftermath of such heinous barbaric communal riots, the Government of Sri Lanka headed by President J.R. Jayawardene, with Prime Minister R. Premadasa, with great eagerness and keenness, pushed to have the Colombo Hilton Hotel Project, expeditiously implemented.

Such endeavour on their part was to repair the badly tarnished international image of Sri Lanka, by implementing the Colombo Hilton Hotel Project, which was a project in the tourism sector, in which internationally reputed companies, namely, Mitsui & Co. Ltd., and Taisei Corporation of Japan, and Hilton International of USA, with Architects Kanko Kikaku Sekkeisha Yozo Shibata & Associates of Japan, were making investments and collaborating; thereby enhancing the foreign investment climate in Sri Lanka.

Accordingly in November 1983, the UDA allocated approximately 7 acres of the identified Land at the Echelon Square in the heart of the City of Colombo to Cornel & Co. Ltd., exclusively for the implementation of the Colombo Hilton Hotel Project.

The Foreign Investment Advisory Committee of the Ministry of Finance & Planning on 8th February 1984 granted approval for the foreign investments and collaboration for the implementation of the Colombo Hilton Hotel Project, on the basis of the above Project Plan prepared by Kanko Kikaku Sekkeisha Yozo Shibata & Associates of Japan, with copies of such approval being forwarded to the relevant statutory authorities.

Government of Sri Lanka agreed to give State Guarantees to finance the Colombo Hilton Hotel

The Government of Sri Lanka to facilitate the expeditious implementation of the Colombo Hilton Hotel Project, agreed to afford State Guarantees to Mitsui & Co. Ltd., and Taisei Corporation, to raise funds particularly, from the Exim Bank of Japan, to be lent by them to HDL, to finance the implementation of the Colombo Hilton Hotel Project-essentially as a private sector project.

The cash flow projections on the feasibility of the Colombo Hilton Hotel for the purpose of obtaining the State Guarantees, were formulated by Mitsui & Co. Ltd., in association with Taisei Corporation, and were based on the profitability forecast formulated by Hilton International of USA for the Colombo Hilton Hotel.

To enable the issuance of such State Guarantees, the Government of Sri Lanka in terms of the Foreign Loans Act No. 29 of 1957 had to own more than 50% of the Shares of HDL. In which circumstances, the Government of Sri Lanka became a party to an Investment Agreement signed on 31st January 1984, with Mitsui & Co. Ltd., Taisei Corporation and Cornel & Co. Ltd. Consequently, the State Guarantees were issued on 17th February 1984 by the Government of Sri Lanka to Mitsui & Co. Ltd., and Taisei Corporation.

In terms of the Investment Agreement signed on 31st January 1984, the Government of Sri Lanka was entitled to nominate 2 Directors to the Board of Directors of HDL, and in conformity therewith, new Articles of Association of HDL were adopted.

Intriguingly, President J.R. Jayawardene by Letter dated 18th November 1983, even prior to the formal execution of the Investment Agreement, nominated M.T.L. Fernando, who was then Senior Partner of Ernst & Young, Chartered Accountants, to be a Government Nominee Director on the Board of Directors of HDL viz:

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18th November 1983

My dear Minister,

Please discuss with me before appointing a Government representative on the Board of Hilton Hotel Management.

I would like you to consider the case of Mr. M.T.L. Fernando. His bio date is as follows:

Fellow of the Institute of Chartered Accountants

Senior Partner Ernst & Whinney

Member of the Council of the Stock Exchange

Chairman-Management Systems Ltd.

Director of the following Companies-

Hayleys Ltd.

Shaw Wallace & Hedges Ltd.

Lankem Ceylon Ltd.

Ceylon Guardian Investment Trust

Rubber Investment Trust

Finlays Travels Ltd.

Ashok Garments

Bone Venture Ltd. FTZ Project

Yours sincerely,

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President

Hon. Anandatissa de Alwish, M.P.

Minister of State

COLOMBO.

The Directors of HDL, as disclosed in its Prospectus issued on 6th March 1984, for the public issue of HDL Shares, were the following persons, who included, in addition to M.T.L. Fernando, Senior Partner, Ernst & Young, Director, Economic Affairs, Ministry of Finance & Planning, S. Rajalingam as the two Government Nominee Directors:

C.L. Perera

F.G.N. Mendis

Nihal Sri Ameresekere (the Author)

M. Radhakrishnan

S. Rajalingam

M.T.L. Fernando

A. Naka

K. Shimada

To enable a Shareholding in excess of 50% of HDL to be held by the Government of Sri Lanka, Cornel & Co. Ltd., who had obtained a 99-year Lease from the UDA of the aforesaid 7 acres of Land at the Echelon Square in the heart of the City of Colombo, and who had obtained a Shareholding in HDL for the capitalized value of a 99-year under-Lease of the said Land to HDL, transferred its such Shareholding to the Government of Sri Lanka, subject to such Shareholding being returned, upon the cancelation and annulment of the State Guarantees issued to Mitsui & Co. Ltd., and Taisei Corporation.

Import duty exemptions granted to the Colombo Hilton Hotel

In addition to the State Guarantees issued by the Government of Sri Lanka, to further support the expeditious implementation of the Colombo Hilton Hotel Project, the Government of Sri Lanka granted exemptions from import duties in respect of imports, which were required for the implementation of the Colombo Hilton Hotel Project.

For the foregoing purpose, then Minister of State, Anandatissa de Alwis, who was a close confidante of President J.R. Jayawardene, and who was in charge of the subject of Tourism, submitted the following Cabinet Memorandum dated 10th February 1984, recommending the grant of such import duty exemptions to the Colombo Hilton Hotel Project.

HILTON INTERNATIONAL, COLOMBO

Exemption of Import Duty for Hotel construction

1.   I am submitting the following Memorandum for the consideration of the Cabinet Sub-Committee on Economic Development.

2.   The events of July 1983 destroyed the tourism image of this country. But in the debris we found a miracle in the form of the Hilton Hotel Project. It is a powerful answer to the world to say that Hilton International-the biggest name in the Hoteliering world and in America, and Japan-the most economically advanced nation in the world, have got together in Colombo, despite July 1983, to build a five star Hotel. This fact alone is worth many millions in the process of restoring the image of this country all over the world. This project, therefore, has to be looked at from this point of view.

3.   Hilton International, Colombo will mainly be owned by Sri Lankans. Only 25% of the equity will be in foreign hands.

4.   Air Lanka which is due to commence operations to Tokyo this year will also be a beneficiary of this project. Japanese interest in the Hotel Hilton International, in Colombo, having special catering arrangements to suit Japanese travellers will attract more Japanese tourists to Sri Lanka.

5.   The duty free concession requested by the developers of the Hotel Project is only for materials used in construction and equipping the Hotel from an engineering point of view. They are prepared to accept the condition that all construction machinery imported by the contractor will be re-exported on completion of the Project. They will pay Customs duty for any machinery disposed to Sri Lankans without re-exporting.

6.   At the time the local Sponsors of this Project led by Mr. Cornel Perera commenced negotiations with the Japanese and other international financiers it was the policy to provide import duty exemption on materials imported for construction of large projects approved by Government. Many large projects of UDA and GCEC are examples.

7.   In the light of the above I recommend the request for exemption of import duty for the construction of Hilton International, Colombo.

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Dr. Anandatissa de Alwis

Minister of State

February 10, 1984

Ministry of State

Scanned extracts of the above

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27th February 1984

His Excellency J.R. Jayawardene

President of Sri Lanka

Presidential Secretariat

Colombo.

Your Excellency,

Duty Free Concessions for Import of Machinery and

Material Necessary for the Hilton Hotel Project

1.   The Treasury representative signed two documents, namely, the State Guarantee and the Investment Agreement for the above project. Under the provisions of these Agreements the Treasury has given its implied consent to exempt from all import duty for all materials and equipment (temporary and permanent) required for the construction of the Hotel and furniture, fixtures and equipment for the Hotel to be imported for the operation of the Hotel by Company.

2.   As Your Excellency is aware, the current financial policy is that even Government Departments have to pay customs duty which the Treasury reimburses. In the case of the Galadari Hotel Projects, the Treasury gave Galadari a Loan of Rs. 200 million to overcome the problem of customs duties, etc at a concessionary rate of interest. Last week, at the end of the Cabinet meeting, I showed the Hon. Ronnie de Mel, Finance Minister, photocopies of the agreements signed by the Treasury with the Colombo Hilton Project Company and pointed out that in the circumstances the Government is now bound to honour its pledge. Hon. Ronnie de Mel asked me to write to him so that he could attend to this matter. My Letter dated 2 4th February 1984 in this regard is already with the Treasury. I also mentioned this matter to Dr. Tilekeratne after the meeting of the Cabinet Sub-Committee on Economic Development.

3.   Promoters are anxious to get on with the details with contractors and there are other Companies involved, such as Taisei, Mitsui and Hilton International. The promoters hope to ceremonially break ground on 12th March.

4.   I understand that Your Excellency is incharge of the Finance Portfolio until the return to the Island of the Hon. Ronnie de Mel. I shall, therefore, be grateful, if Your Excellency would be so good as to make an early decision because the Hilton people are looking forward to going public on March 1st.

5.   In coming to a decision, I thought the following additional facts may be of assistance to Your Excellency; the Galadari Project is substantially foreign owned, but the Government has given a loan of Rs. 200 million at a rate of interest as low as 9%. The Hilton Project is 51% owned by Government and 75% Sri Lankan owned; the 51% ownership was insisted upon by the Treasury for signing the guarantee in respect of a loan from a Japanese Government sponsored lending organization. Therefore, the granting of duty concessions to Hilton should be viewed differently from the grant of such concessions to the Galadari of the Taj Hotels.

6.   I would also urge for Your Excellency’s consideration that the beginning of a Hilton Hotel in Sri Lanka, after the July events, would do more that all our other efforts throughout the world to reassure tourism agencies and foreign investors that Sri Lanka has returned to normalcy. A name like Hilton gives this project a prestige that no other Hotel can provide and the Japanese confidence in this huge investment are positive factors in this project.

Yours sincerely,

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Dr. Anandatissa de Alwis

Minister of State

To convince the Government of Sri Lanka of the obligation on its part, in terms of the Investment Agreement of 31st January 1984, to grant import duty exemptions on the imports required for the implementation of the Colombo Hilton Hotel Project, Cornel & Co. Ltd., obtained, through D.N. Thurairajah & Co., Attorneys-at-Law, the following Legal Opinion dated 6th March 1984 from K.N. Choksy, then Senior Attorney-at-Law:

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Consequently, the Cabinet of Ministers of Sri Lanka, approved the granting of import duty exemptions on the imports required for the implementation of the Colombo Hilton Hotel. Whilst all the promoters were at a Meeting, President J.R. Jayawardene personally telephoned one of the promoters, to inform that the Cabinet of Ministers had given approval for the grant of import duty exemptions for the Colombo Hilton Hotel.

Ronnie de Mel, Minister of Finance & Planning objected to the Colombo Hilton Hotel

The Foreign Investment Advisory Committee of the Ministry of Finance & Planning, with Ronnie de Mel being the very Minister of Finance & Planning, having been well and truly consciously aware that the Colombo Hilton Hotel Project was to be funded on Foreign Loans raised from Japan, on collateral of State Guarantees, gave formal approval on 8th February 1984 for the implementation of the Colombo Hilton Hotel Project by the following Letter copied to the relevant State Authorities.

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Shockingly thereafter by Letter dated 27th February 1984, the Secretary, Ministry of Finance & Planning, intimated to HDL, that the Hon. Minister of Finance & Planning, Ronnie de Mel, had directed that it was not possible to exempt from Income Tax, the interest on the Foreign Loans, which were to be provided to HDL for the implementation of the Colombo Hilton Hotel Project, by Mitsui & Co. Ltd., and Taisei Corporation, which Foreign Loans were being financed by the Exim Bank of Japan.

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No Japanese Lender would have agreed to lend at normal lending rates of Japanese Yen, if taxation on the interest on the Loan had to be paid in Sri Lanka, since the Japanese Lender would then get a much lesser rate of interest. This in effect placed a ‘road-block’ at the eleventh hour impeding the implementation of the Colombo Hilton Hotel Project, whilst a public issue of HDL Shares was scheduled for 6th March 1984, and a ‘ground breaking ceremony’ to commence the construction of the Colombo Hilton Hotel was scheduled for 12th March 1984.

The foregoing was opposed to the policy of the Government of Sri Lanka, in requiring the expeditious implementation of the Colombo Hilton Hotel, as was borne out by the aforesaid Cabinet Memorandum dated 10th February 1984 of the Minister of State & Tourism, Anandatissa de Alwis.

In the face of such predicament, I promptly made representations to the Commissioner General of Inland Revenue, affording interpretation to the factual circumstances of funds being raised from Japanese Banks and on-lent, without any profit thereon arising in Sri Lanka to be taxed; and that the source of funding being from Banking sources, such funding was not subject to Sri Lanka taxation.

Consequent to my such intervention, the Commissioner General of Inland Revenue caused the following Letter dated 1st March 1984 to be issued. This enabled HDL to proceed with the issuance of its Prospectus, as had been scheduled on 6th March 1984, and to commence construction of the Colombo Hilton Hotel also as scheduled on 12th March 1984.

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In fact one day, when I, among others, was before a Meeting of the Cabinet of Ministers of Sri Lanka, chaired by President J.R. Jayawardene, with the attendance of Prime Minister R. Premadasa, I was called upon to afford requisite clarifications and explanations on the Colombo Hilton Hotel Project; and at the very end of such brief interaction with some Ministers of the Cabinet, quite significantly President J.R. Jayawardene queried from the Minister of Finance & Planning, Ronnie de Mel, who had been ominously silent in our presence-" Ronnie any further questions ?". Surprisedly, he had none !

Very clearly, President J.R. Jayawardene thereby ‘let the cat out of the bag, as it were’, disclosing that prior to me and others being invited to the Meeting of the Cabinet of Ministers, that Minister of Finance & Planning, Ronnie de Mel, in fact, had indeed raised questions before the Cabinet of Ministers, but he curiously refrained from doing so in our presence !

Clearly admitting the stance he had taken at the time of the implementation of the Colombo Hilton Hotel Project, Minister of Finance & Planning, Ronnie de Mel had subsequently addressed the following Letter dated 27thAugust 1987 to President J.R. Jayawardene:

27th August, 1987

CONFIDENTIAL

His Excellency J.R. Jayawardena

President of Sri Lanka

Presidential Secretariat

COLOMBO 1.

Your Excellency,

1.   Your Excellency will recall that when the Hilton Hotel Project was discussed by the Cabinet Sub-Committee on Economic Development on 23rd March, 1983, 1 opposed this proposal because I felt that the project was not likely to be commercially viable. It was my view that there were already too many 5-star luxury Hotel s in Colombo and that tourist traffic likely to be generated would not be sufficient to sustain another large 5-star Hotel immediately.

2.   Notwithstanding my strong objections, the Cabinet Sub-Committee at its meeting held on 23rd March, 1983, approved the Hilton Hotel Project, and also decided that the Government should guarantee the loan taken from Japan by the project promoters. Since, under the Foreign Loans Act, the Government cannot guarantee a foreign loan taken by an institution in which the Government does not have a majority shareholding, the Cabinet Sub-Committee also decided that the majority of the shares of the company should be transferred to the State and that the Government should take a mortgage of the assets of the project. Subsequently, the Cabinet Sub-Committee, at its meeting held on 25th January, 1984, decided to guarantee the loan taken from the Bank without obtaining a mortgage of the assets of the project because it was stated that such a mortgage would prevent lenders for this project from obtaining refinance from the Exim Bank of Japan.

3.   In accordance with these Cabinet Sub-Committee and Cabinet decisions, the Ministry of Finance issued a guarantee on 17th February, 1984, to cover the loan of 12.3 billion yen, equivalent at today’s rate of exchange to Rs. 2, 535 million, which was given by Mitsui & Co. Ltd., and by the Taisei Corporation of Japan to Hotel Developers (Lanka) Ltd., for financing the Hilton Hotel Project. The guarantee was given subject to the condition that Messrs. Cornel & Co. should transfer51% of the shares of Hilton Hotel to the Government at no cost and that the Government will be a party to the Investment Agreement to be signed among the shareholders of the company. It was also agreed that the Government would re-transfer the shares to Messrs. Cornel & Co. on the full payment of the dues on the loan guaranteed.

4.   The original proposal made by the company was that the Hilton Hotel Project was to be financed partly by the Japanese loans referred to above and partly by equity capital to be subscribed as follows:-

5.   The Japanese shareholders paid for their shares entirely in cash. Messrs. Cornel & Co., however, paid a sum of only Rs. 3 million in cash. The balance shares valued at Rs. 250.9 million were issued to Cornel & Co., solely on the basis of an under-lease of the land in the Fort on which the Hotel was to be built, to the Hotel company. In reality, this land belonging to the Government, had been leased to Cornel & Co. by the Urban Development Authority for a period of 99 years at a ground lease rent of Rs. 136.8 million payable in instalments, and a down-payment of Rs. 27.4 million. Cornel & Co. have paid only the initial down-payment and not even the first instalment of the ground rent, amounting to Rs. 3.3 million, which was due in February 1987, has so far been paid, according to the information provided to the Finance Ministry by the UDA. In other words, Cornel & Co. obtained Rs. 253.9 million worth of shares in the Hilton Hotel Project with cash payments totaling only Rs. 30.4 million. I consider this to be an entirely unsatisfactory transaction.

6.   In terms of the Cabinet Sub-Committee decision, Cornel & Co. transferred the entirety of their shareholding, which accounted for 51% of their shares in the Hilton Hotel Project, to the Government of Sri Lanka on 2 4th February, 1984, to enable them to obtain a Government guarantee. But it is clear from what I have stated above that what the company transferred, apart from its small cash contribution, was land which in fact belonged to the Government, for which it had not paid the lease rental due.

7.   Messrs. Cornel & Co. also gave an undertaking in the Investment Agreement signed by the shareholders (including the Sri Lanka Government) that any shares which were not taken up by the public when the public issue of shares was made, would be taken up by Cornel & Co. within a reasonable period. In August 1983, Hotel Developers (Lanka) Ltd., offered shares in the company to the public to the value of Rs. 119.5 million. Shares to the value of only Rs. 33.7 million was subscribed by the public. This was to be expected because, after the communal riots which occurred in July 1983, even a Hotel Project which would have been viable before these riots, would have ceased to be viable. Since, as I stated above, I had expressed the view that the Hilton Hotel Project may not be commercially viable even before the riots took place, it was quite obvious that it had less chance of succeeding after the communal riots. The promoters could easily have stopped work at this stage because no construction work had commenced, but they decided, ill-advisedly, to go ahead with the project. Four years have now passed since the share issue was made and Messrs. Cornel & Co. have not honoured the written undertaking they gave to purchase the unsubscribed public shares in terms of Clause 3.03 of the Investment Agreement.

8.   The Hotel Company now faces very serious cash flow problems. They have defaulted in the payment of 523.5 million yen (approximately Rs. 108 million) due to the building contractors, and al further sum of 876.6 million yen (approximately Rs. 181 million) will fall due very shortly to the suppliers of furniture and equipment.

9.   Hotel Developers (Lanka) Ltd., and Messrs. Mitsui & Co. Ltd., have sought the assistance of the Treasury to obtain additional finance from the Banks to meet their cash shortfall, which has been caused largely by the failure of Messrs. Cornel & Co. to honour the obligations it had entered into. A Government guarantee for fresh borrowing from local banks, or the Government’s concurrence to allowing a primary mortgage of the assets of the Hotel Company to the Banks, has been requested. The Treasury, having carefully considered this request, has informed the company on 31stJuly 1986, that the proposals were not acceptable to the Treasury. The Government has already guaranteed very large debts amounting to over Rs. 2, 535 million to this company and I am not prepared to guarantee any further loans.

10.   I annex a schedule of payments of loan instalments and interest which will probably have to be paid by the Government under the guarantees because of the likely failure of this company to meet its loan obligations. It seems to me that the guarantee which was given by the Government for the loans taken by this firm, which was given against my strong advice, is likely to place on us an even greater financial burden than in the case of the borrowings of Air Lanka, which too were made against my advice.

11.   If the Government does not meet its obligations under the Guarantee Agreement, it will seriously affect our financial standing in international markets and make it very difficult for us to raise loans on favourable terms in the future. Moreover, it might activate cross-default clauses in other Loan Agreements on loans taken by the Government and the banks concerned may call upon us to make immediate repayment of all outstanding loans, which we will not be able to do. I do not, therefore, recommended that we should default on our guarantee commitments, even though the honouring of these commitments would place a great burden on the Treasury and reduce the funds available for other developmental activities.

12.   We should, however, attempt to negotiate with the creditors concerned for a possible rescheduling of the loan due, or attempt to obtain refinance for this loan on more favourable terms. If the Government approached Mitsui & Co. Ltd., the Taisei Corporation and the Exim Bank of Japan at the appropriate level, it may be possible to obtain some concessions on the repayments due.

13.   As regards the action to be taken against Messrs. Cornel & Co. for their failure to meet the financial obligations into which they had entered, the Ministry of Finance has already written twice to the firm to meet these obligations but has had no positive response. I would suggest that the Attorney General be requested to take legal action against the firm so that we could recover whatever is possible from the other assets of the firm.

14.   I am writing this letter to bring the facts of this case to Your Excellency’s attention and to seek your approval for the course of action proposed in paragraphs 12 and 13 above.

Yours sincerely,

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(R.J.G. de Mel)

Minister of Finance and Planning

Annexure to Letter dated 27th August 1987

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Derivative action in law on the premise of fraud on the Government of Sri Lanka, upheld by the District Court of Colombo

Nevertheless, subsequent to the completion of the implementation of the Colombo Hilton Hotel Project, I discovered grave and serious discrepancies and deficiencies in the construction of the Colombo Hilton Hotel and in the relevant documentations.

Hence, having obtained an Investigative Report from a firm of independent Chartered Architects & Engineers, Shelton Wijayaratne, Williams & Associates, as advised by Senior Counsel, P. Navaratnarajah, Queen’s Counsel and K. Kanag-Isvaran, P.C., I, as a Shareholder of HDL instituted in September 1990, Sri Lanka’s first derivative action in law on the premise of fraud in the circumstances of ‘wrong-doer control’. (Colombo Hilton Hotel Construction-Fraud on Sri Lanka Government-Vol. I-Sri Lanka ‘s First Derivative Action in Law—by same Author)

The District Court of Colombo having been satisfied promptly issued enjoining orders in September 1990 restraining any payments, whatsoever, being made to Mitsui & Co. Ltd., and Taisei Corporation by HDL or by the Government of Sri Lanka, under the State Guarantees, which had been issued.

The District Court of Colombo subsequently, after an inter-partes Inquiry, issued interim injunctions in October 1991 restraining any payments, whatsoever, being made to Mitsui & Co. Ltd., and Taisei Corporation by HDL or by the Government of Sri Lanka, under the State Guarantees, which had been issued, inter-alia, observing thus;

# the Contractors having performed a lesser volume of work, have attempted to obtain a larger sum of money… and the Plaintiff having raised the question concerning the basis for the payment of monies.

# the other Defendants, [i.e .the Directors], as persons having connections concerning the said Hotel business, having intervened therein in such matter, acting to obtain the said monies, had not readily acted to conduct a correct examination.

# they having prevented such correct examination, were attempting to, howsoever, effect the payment of monies.

# they are exercising the influence, that they have gained in society, acting together with the Company, to prevent the raising of the questions concerning the matters of the work in connection with the Contracts, the Prospectus …

# their collaboration was adverse to the interest of the Shareholders of the Company, and that they were acting through such collaboration, in a manner amounting to defeat the interests of the Shareholders of the Company.

The then Learned District Judge, P. Wijeyaratne Esqr., further observed, in his said Order; inter-alia, as follows;

Accordingly, the present position is that the Defendants’ statement, that they have performed their part of the Contracts and the willingness shown by the Company to accept the same, as set out by the Defendants, cannot be accepted as the basis for payment…. in fact, whether, as stated by the Plaintiff [reference being the Author], this is a devious method of siphoning out, a large scale of foreign exchange from this country…The significance, that is shown herein, is that generally, the Company which has to pay money, would be raising questions, in respect of such situation, and would not allow other parties to act arbitrarily… If the position, that explains this is correct, then this actually, is an instance of acting in fraudulent collusion.

President J.R. Jayewardene notified on the foregoing

Since, President J.R. Jayewardene was very much instrumental in having the Colombo Hilton Hotel Project expeditiously implemented after the barbaric communal riots of July 1983, to repair the adversely tarnished image of the country, and it having been President J.R. Jayewardene and his Cabinet of Ministers, who had approved the Colombo Hilton Hotel Project, affording Land, issuing State Guarantees and affording Import Duty exemptions, I consequently addressed the following Letter dated 8thAugust 1992 to President J.R. Jayewardene, who had retired in 1989, to apprise him of what had transpired and my said derivative action in law-viz:

8th August 1992

His Excellency J. R. Jayewardene,

Former President, Democratic Socialist

Republic of Sri Lanka,

Braemar, Ward Place,

Colombo 7.

Your Excellency,

A JAPANESE JOINT-VENTURE IN SRI LANKA

Your Excellency’s outstanding contribution, as Sri Lanka’s delegation Leader, at the peace Conference in San Francisco, speaking with compassion and wisdom, in support of Japan, afforded Japan the reprieve, She very much then needed and sought; as a consequence thereof, Japan was able to aggressively redevelop its war devastated Country and economy, becoming over the years, one of the foremost industrialized and developed Countries in the world.

Your Excellency’s intervention, won Your Excellency, the admiration of the international community, and a deep sense of appreciation and gratitude from Japan. It is generally accepted, that in view of the foregoing, Japan has extended cognizable and considerable grant, aid and assistance, for the development of our country, and the warmth of the gratitude and friendship, personally to Your Excellency.

Your Excellency, on doubt would agree, that the co-existence of such goodwill, should in itself not afford, unrestricted freedom and liberty, to Japanese investors, to conduct business in blatant violation of laws and norms prevalent, in our country, which are also of general acceptance in the civilized international business community. On the contrary, in view of the above, one would expect Japanese investors, to act with the highest degree of integrity and responsibility, to uphold and protest, that very goodwill that exists, and not to take cover under such goodwill, to protect their exploits.

Since, such goodwill and relationship with Japan, would no doubt be of interest close at heart to Your Excellency, I thought that I should bring to Your Excellency’s kind attention, the matter of the Japanese Collaboration in the Colombo Hilton Hotel ; a project that was promoted, with the ushering in of the liberalized, free and open economy in our Country.

Notwithstanding such goodwill, consequential circumstances, reluctantly compelled me, to institute an Action, as a Shareholder, in the nature and style of a Derivative Action, for the first time in our Country, in the right and interest of the company, under given circumstances of wrong-doer control; all reliefs claimed being in the interest and for the benefit of the company. So that your Excellency could be apprised of the relevant matters before court, I enclose a copy of the written submissions filed in the supreme court; pages 04 to 54 therein, contains a Chronological Statement of Relevant Facts

As a professional Consultant, I have been appalled, that the infrastructural safeguards, that are expected to uphold and protect, not only the interests of the investing public, but also, what is just and right in society, mysteriously, have been unable to react and take action, that is warranted, to hold those responsible, accountable; after all it is said, that no person is above the law.

It is remorsefully shocking, that Japanese Multinationals of international repute, should conduct business in such manner, with total disregard to internationally accepted laws and norms of civilized society, exploiting helpless poor third world countries. Influence peddling, pressures and lobbying, I believe, should not exceed beyond a point, where citizens of a sovereign country are compromised to betray the very interests of one’s own country.

Your respectfully,

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Nihal Sri Ameresekere F.C.A., F.C.M.A

Business & Management Consultant

The Secretary to President, J.R. Jayawardene, as had been directed, acknowledged my said Letter with thanks by his Letter dated 10th August 1992-viz:

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Derivative action in law on the premise of fraud on the Government of Sri Lanka, upheld by the Supreme Court of Sri Lanka, the highest judiciary in the country

Shortly thereafter, in December 1992, the Supreme Court of Sri Lanka, the highest judiciary of the country, delivered a landmark historic Judgment, upholding my derivative action in law, as a serious case of fraud, with real prospects of being successfully proven, and endorsing the issuance by the District Court of Colombo of the interim injunctions, restraining any payments, whatsoever, being made to Mitsui & Co. Ltd., and Taisei Corporation by HDL or the Government of Sri Lanka, under the State Guarantees, which had been issued, inter-alia observing thus:

# the Plaintiff [reference being to the Author] has succeeded in establishing that he has a legally enforceable right and that there is a serious question and prima-facie case and wrong-doer control, and that HDL is entitled to the reliefs claimed.

# the Plaintiff [reference being to the Author] has a reasonable and real prospect of success, even in the light of the defences raised in the pleadings, objections and submissions of the Defendants

# the Plaintiff’s [reference being to the Author] prospect of success was real and not fanciful and that he had more than a merely arguable case

# because in the circumstances of the case, the Directors, including the Government’s representatives on the Board will not assist or are helpless to intervene

# Interim Injunctions were granted to prevent the syphoning out of money from HDL and the Country

# but for the Interim Injunctions, HDL, like Pyrrhus after the battle of Asculum in Apulia, might well be constrained to say, One more such victory and we are lost.

# it might be pointed out that it could not entirely be a matter of indifference to the Government….. the Government made itself eventually responsible for the repayment of the monies borrowed by HDL

Note:

(Colombo Hilton Hotel Construction-Fraud on Sri Lanka Government-Vol. I-Sri Lanka’s First Derivative Action in Law-by same Author) (Colombo Hilton Hotel Construction-Fraud on Sri Lanka Government-Vol. 2-Criminality Exposed, but Perversely Covered – up-by same Author)

POLITICAL & DIPLOMATIC HYPOCRISY

Chapter 2

PRESIDENT R. PREMADASA DIRECTED ACTION ON FRAUD

AGAINST THE STATE, BUT LATER MADE A VOLTE-FACE

In the light of the serious irregularities and discrepancies discovered by me and the nonchalance an inaction thereon by the Board of Directors of Hotel Developers (Lanka) Ltd., (HDL), it was M. Radhakrishnan, Precedent Partner, D.N. Thurairajah & Co., Attorneys-at-Law, who advised me in July 1990, to consider instituting a derivative action in law, vis-a-vis, the fraud perpetrated, in circumstances of wrong-doer control, in the construction of the Colombo Hilton Hotel, owned by HDL, and the collusive attempts to cover-up such fraud. (Colombo Hilton Hotel Construction-Fraud on Sri Lanka Government-Vol. I-Sri Lanka’s First Derivative Action in Law-by same Author)-(Colombo Hilton Hotel Construction-Fraud on Sri Lanka Government-Vol. 2-Criminality Exposed, but Perversely Covered – up-by same Author)

For such purpose, he advised me to retain the services of P. Navaratnarajah, Queen’s Counsel, and K. Kanag-Isvaran, P.C., both of whom were strangers to me at that time.

As advised by M. Radhakrishnan, Precedent Partner, D.N. Thurairajah & Co., Attorneys-at-Law, I through De Silva & Perera, Attorneys-at-Law, retained the services of P. Navaratnarajah, Queen’s Counsel, and K. Kanag-Isvaran, P.C., to pursue with litigation-the very first litigation in my life !

I had the initial consultation with K. Kanag-Isvaran, P.C., together with Junior Counsel S.P. Sriskantha, Attorney-at-Law. At this very first consultation, when I pointed out that I did not have a 5% Shareholding in HDL, the minimum threshold required, in terms of the then prevalent Companies Act No. 17 of 1982, for a Shareholder to institute legal action, vis-a-vis any wrong-doing by a Company, K. Kanag-Isvaran, P.C., requested me to ‘simply state the facts and leave the law to him’!

Shortly thereafter, K. Kanag-Isvaran, P.C., left for the US, after having had an initial discussion with Senior Counsel, P. Navaratnarajah, Queen’s Counsel. In the absence of K. Kanag-Isvaran, P.C., P. Navaratnarajah, Queen’s Counsel, commenced drafting and finalizing the Plaint.

Upon the return of K. Kanag-Isvaran, P.C., the Plaint in the first derivative action in law in Sri Lanka was settled and filed on 13th September 1990 in the District Court of Colombo in Case No. 3155/Spl. (Colombo Hilton Hotel Construction-Fraud on Sri Lanka Government—Vol. I—Sri Lanka’s First Derivative Action in Law—by same Author)

Litigation sanctioned by Ranjan Wijeratne State Minister for Defence & General Secretary, United National Party

In the Plaint formulated and settled by P. Navaratnarajah, Queen’s Counsel, with K. Kanag-Isvaran, P.C., all the Directors of HDL were named, as Defendants, including K.N. Choksy, P.C., an influential Member of the Parliament of Sri Lanka, of the United National Party Government, then led by President R. Premadasa.

K.N. Choksy P.C. & Member of Parliament was also President R. Premadasa’s Senior Counsel, in the Presidential Election Petition Case, which was being heard at that time by the Supreme Court of Sri Lanka, the highest judiciary of the country, and which was filed by the former Prime Minister, Sirima Dias Bandaranaike, who lost the Presidential Election to him in 1989, by a narrow margin in a low voter turnout, amidst rampant killings and violence unleashed by the Marxist political Party, Janatha Vimukthi Peramuna, whose insurrection in 1971 was militarily crushed by the then Government of Prime Minister Sirima Dias Bandaranaike.

P. Navaratnarajah, Queen’s Counsel asserting that, ‘when one litigates, there was no room for any consideration of friends, colleagues or relations’, in settling the Plaint, embodied in the Plaint, the full texts of two Letters, which had been written by K.N. Choksy, P.C., M.P., as a Director of HDL, questionably obstructing my endeavours to independently act professionally.

By the first Letter dated 8th August 1988, K.N. Choksy, P.C., M.P., had prevented the Board of Directors of HDL from carrying out an independent engineering examination of the constructed Colombo Hilton Hotel, which had been required and insisted upon by me, a professional consultant, supported by M.T.L. Fernando, Precedent Partner, Ernst & Young, who was a Government Nominee Director on the Board of Directors of HDL.

The second Letter dated 28th February 1990 issued by K.N. Choksy, P.C., M.P., had specifically countermanded my Memorandum dated 13th December 1989 tabled and circulated at a Meeting of the Board of Directors of HDL, whereby I had pointed out the grave and serious discrepancies, which had been discovered by me at that time, and therefore, as a professional consultant, I required Specified Bills of Quantities and Final Measurements, in support of the Medical Certificate type one page Completion and Final Certificates, which had been given by the Japanese Architects, Kanko Kikaku Sekkeisha Yozo Shibata & Associates, purporting to certify as correct, the construction and completion of the Colombo Hilton Hotel, which was contracted to be built on a ‘turnkey fixed price’ basis.

Notwithstanding my such professional objections, K.N. Choksy, P.C., M.P., having no competency, whatsoever, to have done so, by Letter dated 28th February 1990 endorsed that the full payment be made by HDL and/or the Government of Sri Lanka, under the State Guarantees, which had been issued to Mitsui & Co. Ltd., and Taisei Corporation, without calling from the Japanese Architects, Kanko Kikaku Sekkeisha Yozo Shibata & Associates