Focus/Spotlight

Probe unearths wider network

By The Sunday Morning News Desk

Investigations by the Financial Crimes Investigations Division (FCID) into alleged corruption over a ship deal in 2014 has revealed a wider link, FCID sources told The Sunday Morning.

Investigators have unearthed that funds linked to the corrupt ship deal had been transferred to accounts in China, Barbados, Mauritius, Dubai, and the British Virgin Islands.

The corrupt deal had taken place in 2014 and resulted in the purchase of two ships for Ceylon Shipping Corporation Ltd. (CSC) in 2015 and 2016, causing the Government a billion-rupee loss, former CSC Chairman Shashi Dhanathunga alleged.

Investigators found that two merchant ships named Ceylon Breeze and Ceylon Princess were purchased by the CSC at an inflated price of $ 35 million from Avinc International Beijing through an unsolicited proposal.

According to documents presented to the Fort Magistrate’s Court on 23 August, the FCID used data from CW Kellock, an international ship brokering and valuation company, to recognise the value of a ship, and had discovered that the value of the ship between 2014/15 was only $ 20 million, but the Price Committee and Project Committee in Sri Lanka had estimated the value of the ship to be $ 26 million. The ships were subsequently purchased using a loan of $ 35 million per ship from People’s Bank.

The FCID had also raised suspicion over the telephone conversations between the local agent of Avinc International Beijing and the former Secretary to the Ministry of Ports and Highways Ranjith Premasiri.

The examination of Avinc International Beijing’s local agents’ Sri Lankan bank accounts revealed that money was funnelled from an account at Emirates NBD bank. From 2012 to 2017, around $ 43 million was allegedly pumped into this account from various foreign accounts belonging to Arinma Holdings (Pvt.) Ltd., registered in the British Virgin Islands in 2009.

According to the FCID, the ultimate beneficial owner of Arinma Holdings was listed as Devinka Rumali Perera.

The FCID further uncovered that Arinma Holdings was listed as a party to contracts for the Road Development Authority’s (RDA) road development projects including the A9 Road.

The FCID had also informed the court that the Government had lost $ 15 million (approximately Rs. 2.7 billion) from the transaction and the Department had initiated an investigation into what happened to that money after the transactions.

More information to be uncovered

FCID sources told The Sunday Morning that during investigations, they had uncovered a wider network and are now investigating that aspect as well.

“Gathering information from overseas is not easy. We need to go through the Justice Ministry and get the information from overseas. Foreign countries have other priorities, so the information we want will not come fast,” the source said.

There is also a fear that a change in government will further stall the ongoing investigations.

Investigations were launched following a complaint lodged by current Deputy Minister of Development Strategies and International Trade Nalin Bandara in July 2016.

Accordingly, Bandara had lodged a complaint with the FCID alleging that more than Rs. 4.2 billion had been defrauded by the authorities of the previous regime by purchasing two ships at a cost of $ 35 million in 2014, though it actually cost only $ 20 million in the market.

The Minister had also alleged that one ship named Ceylon Breeze (IMO [International Maritime Organisation] 9734563) had already been brought to the country while the Deputy Minister and Chairman of the CSC had left to bring the other ship to Sri Lanka.

The Minister had further alleged that even though these two ships were claimed to be brand new, they seemed to be old ships repaired to look new, as their IMO numbers, which denote the date of its year of manufacture, start with 97.

Past actions come to light

In 2014, former President Mahinda Rajapaksa was the Cabinet Minister of Ports and Shipping while United People’s Freedom Alliance (UPFA) MP Rohitha Abeygunawardena was the Project Minister of Ports. By the time the purchasing had taken place, Admiral Prof. Jayanath Colombage was the Chairman of the CSC.

According to CSC, the corporation received the two ships – M/V Ceylon Princess and M/V Ceylon Breeze – in October and March 2016, respectively. Ceylon Princess, the second ship belonging to CSC, was a creation of China’s Avinc International. When contacted, CSC Chairman Admiral Daya Sandagiri told The Sunday Morning that a separate internal investigation was not launched over the allegation, but they were supporting the FCID investigations.

Former CSC Chairman Sashi Dhanathunga told The Sunday Morning that after the information on the corrupt deal surfaced in 2015, the FCID began gathering information.

“We were not a part of the investigation, but a party to provide the information. There is confusion as everyone thinks that this happened while I was in office but really, this happened before, and during the period I was in office, this information surfaced. It happened in 2014 and I took office only in 2015,” Dhanathunga added.

“It came to light when we came to know that there was a deal and we tried to cancel it and we obtained the Attorney General’s (AG) opinion and the opinion of the Treasury before going ahead with it; we were trying to find out whether we should resume the project or not,” he explained.

However, since it has been alleged that Arinma Holdings was also involved with the said corruption, The Sunday Morning contacted Arinma Holdings Group of Companies where its spokesman said that its Chairman Ashan Malalasekera was currently overseas and the company could not make any statement with regard to the allegation as per the advice given by its lawyers.

Meanwhile, several attempts made by The Sunday Morning to contact former Ports Project Minister MP Abeygunawardena were futile while attempts to contact former CSC Chairman were also fruitless as he was overseas.