ECONOMYNEXT – Prime Minister Ranil Wickremesinghe has publicly called for a fresh probe into alleged foreign funding of former president’s re-election bid, but several other high-profile China-related investigations remain in limbo.
At least three mega corruption cases involving Chinese state-owned firms have either been moth-balled or deliberately put on hold, according to officials familiar with the cases. These graft cases are in addition to the alleged campaign funding by the Chinese.
In July 2015, both the police and the Central Bank’s Financial Intelligence Unit (FIU) investigated ex-president Mahinda Rajapaksa allegedly receiving billions of rupees in funding for his 2015 election campaign, but the investigation stalled due to political pressure.
The investigations began after unusual payments were made from a Standard Chartered Bank account of China Harbour Engineering Company (CHEC) just before the January 2015 election.
The investigators linked large payments from a SCB branch account of the Chinese firm to Rajapaksa loyalists involved in the election campaign, including a Buddhist monk from Colombo 7.
The case was brought back into focus last month after the New York Times newspaper repeated some of the findings of the police Criminal Investigation Department and the Central Bank’s FIU.
President Rajapaksa has denied he received any funding from China for the failed re-election bid while CHEC addressed a few hand-picked reporters on Thursday to respond to the NYT allegations, but stopped short of an outright denial.
The Chinese embassy, which also addressed the selected journalists on Thursday, denied any wrong doing by their companies and blamed Western media for trying to tarnish their image.
"The speculation by an international media organization that CHEC funded former President’s 2015 Presidential election campaign is completely inconsistent with the facts," CHEC said in a statement, without spelling out the "facts".
"CHEC has never been involved in the internal affairs of Sri Lanka," the statement added, but did not respond to specific allegations of payments from an SCB account identified as "HPDP Phase 2," a/c 02 013359190/19 belonging to CHEC.
The alarm was raised by the SCB in the last days of the Rajapaksa regime, but official sources suggested that, even under the new administration, there have been attempts to stifle the investigation into CHEC payments as well as other China-related corruption cases.
The momentum of these investigations slowed down dramatically as the new government also began doing business with Chinese entities.
Sources close to the investigations said three other cases — Nilwala river development ($690 million), purchase of two MA 60 aircraft ($41 million) and the purchase of two ships ($71 million) — appear to be on hold.
In the Nilwala case, nearly $30 million was paid to a Chinese company even before any work could commence and the official who authorized the payment is now reportedly living in New Zealand. The project never took off. A further $3.6 million had been paid to a politically influential local with links to both the SLFP and the UNP.
After extensive work on the three cases, it is understood that on or around November last year, the cases were taken away from the specialized arms of the police. It is not immediately clear who is investigating them or if any an inquiry is still on under any other branch of the police.
There are unconfirmed reports that the former central bank governor Arjuna Mahendra too may have played a role in slowing the investigations in the early days of the Sirisena-Wickremesinghe government.
The Sunday Observer newspaper in 2016 alleged that the amount of suspicious payments made by the Chinese firms under investigation was 3,110 million rupees (about $24 million), which is three times more than the $7.6 million alleged in the NYT report.
Government spokesman and Health Minister Rajith Senaratne is on record thanking the New York Times for helping to revive the investigation.
The NYT said with 10 days to go before polls opened in January 2015, around $3.7 million was distributed in cheques: $678,000 to print campaign T-shirts and other promotional material and $297,000 to buy supporters gifts, including saris.
Another $38,000 was paid to a Buddhist monk from Colombo 7 who was supporting Rajapaksa’s electoral bid, while two cheques totaling $1.7 million were delivered by loyalists to Temple Trees. (COLOMBO, July 7, 2018)