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Tuesday June 25th, 2024

Sri Lanka Pres appoints local panel to probe Channel 4 claim amid foreign inquiry demand

Navy guards at the Kochchikade Shrine of St Anthony shortly after the Easter Sunday attacks/Pathum Dhananjana

ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe has appointed a three-member panel led by a retired Supreme Court Justice to probe the British Channel 4 documentary which said there was an alleged plot linked with the current state intelligence chief behind the attack.

President Wickremesinghe appointed retired Air Force Commander A C M Jayalath Weerakkody and Presidential Counsel Harsha A J  Soza as the other two members of the committee “to investigate Channel-4 allegations about the Easter attacks”, the President’s Media Division said on Friday (15).

The British-based Channel 4 documentary revealed with whistle blowers’ allegations that the Easter Sunday attack on April 21, 2019, was a plot involving the current intelligence chief Suresh Sallay to bring former leader Gotabaya Rajapaksa into power.

Both Sallay and Rajapaksa have rejected the allegations.

In the Channel 4 video, a whistle blower who has already left the country identified as Azad Maulana, a former top aide of current state minister Sivanesathurai Chandrakanthan alias Pillayan, had spoken of Sallay planning the attacks for about three years to help Rajapaksa come into power.

Riding on a national security threat campaign, Rajapaksa won the presidential poll in November 2019 overwhelmingly. However, he failed to probe into the Easter Sunday attack mastermind as promised during his presidential campaign.

In the video, Maulana and another anonymous source say military intelligence had direct contacts with the suicide bombers, and Maulana stated that he arranged a meeting between Sallay and suicide bombers in 2018.

Opposition parties and rights groups have demanded for an independent, international investigation over the allegation.

Successive Sri Lankan governments have rejected calls for international probes but had agreed for local panels.

Past probes by local panels have hardly yielded anything, analysts say. Instead, they have dragged such investigations for many years.

Sri Lanka is already under a United Nations-led international probe on human rights abuses during the final stage of a 26-year war that ended in 2009 and alleged suppression of religious minorities since then.

However, successive governments have rejected both allegations and repeated requests for an independent international probe.

At least 269 people including over 40 foreigners were killed in a series of suicide bombings by Islamist extremists targeting three luxury hotels and three churches during Easter Sunday services.

Rajapaksa soon after winning the presidential poll, transferred key police officials who spearheaded the Easter Sunday attack.

Sri Lanka’s Supreme Court ordered early this year former President Maithripala Sirisena, four other officials including then intelligence chief Nilantha Jayawardena to pay compensation totaling 310 million rupees to victims of the 2019 Easter Sunday bombings.

Sri Lankan authorities failed to act on warnings issued by an intelligence agency in neighbouring India 17 days before the coordinated suicide bombings, according to several investigations into the attacks.

Accusations of the involvement of Sri Lankan intelligence operatives have already been reported to courts. However, this is the first time Sallay is directly accused of plotting the attacks. (Colombo/September 15/2023)

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Sri Lanka to sign Paris Club debt deals as fresh ISB talks to also start

ECONOMYNEXT – Sri Lanka will sign agreements on restructured debt with Paris Club creditors Wednesday, Cabinet spokesman Minister Bandula Gunawardana said as sources said talks with private creditors are also due to start later in the week.

The relevant senior officials and State Minister Shehan Semasinghe has already left the country to sign the agreements, Minister Gunawardana said.

Sri Lanka has held detailed negotiations with bilateral creditors ever since a sovereign default in 2022 and President Ranil Wickremesinghe has personally met leaders of friendly countries to expedite the restructuring, he said.

The finalizing of the restructure was a ‘great victory’ for Sri Lanka he said.

Details will be revealed to parliament by President Wickremesinghe and an address to the nation on Wednesday he said.

Discussion with private bondholders are also taking place separately, he said.

Face to face talks with bond holders are likely to start Thursday, sources said.

Investors in a steering committee representing key bondholders have halted trading and are in a ‘restricted’ period Bloomberg Newswires reported.

Sri Lanka is attempting to restructure 12.5 billion dollars of sovereign bonds and about 1.7 billion dollars of past due interest following the declaration of an external default in 2022.

Private investors are seeking some so-called macro-linked bonds whose final haircut is linked to dollar GDP as well as some standard or ‘plain vanilla’ bonds with an upfront haircut.

The style of bonds have not been used in sovereign restructurings before. In the latest round of talks more plain vanilla bonds may be discussed, sources aware of the thinking of some bond investors said.

The ISB holders have proposed a 28 percent haircut and a 1.8 percent consent fee. The macro-linked bonds would have principle re-stated up to 92 percent of the original depending on the evolution of gross domestic product.

Sri Lanka is restructuring debt using an IMF debt sustainability model applied to middle income countries with market access as opposed to debt sustainability model used in countries like Ghana applicable to low income countries requiring deeper haircuts on both domestic and foreign debt.

Hair cuts may also depend on the maturity of bonds and the coupon interest.

Ghana has higher levels of commercial debt having started to access capital markets from around 2007.

Ghana also has a bad central bank like Sri Lanka and has gone to the International Monetary Fund 18 times.

The country is also operating flexible inflation targeting (inflation targeting without a clean float), which critics say is the latest spurious monetary regime peddled to hapless unstable countries without a doctrinal foundation in sound money.

Having done broad domestic debt restructuring as well as continued currency volatility both interest rates and inflation remains above 20 percent.

Ghana’s central bank has a worse monetary anchor (8 percent inflation plus 2 percent) compared to 5 percent plus two in Sri Lanka and runs into currency trouble despite being an oil producer like Iran, Venezuela and neighboring Nigeria.

Nigeria has an inflation target of 6-9 percent but ends up with around 20 plus inflation and currency trouble.

Sri Lanka has undershot its inflation target since reaching monetary stability in September 2022 and has appreciated the currency, amid deflationary policy giving a strong foundation for economic activity to resume. (Colombo/June26/2024)

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Sri Lanka to seek investors for 200MW BOOT power plant

EONOMYNEXT – Sri Lanka’s cabinet has given approval to seek investors for a 200 MegaWatt independent power plant on a build-own-operate-and-transfer (BOOT) basis, a government statement said.

The internal combustion power plant will be capable of running on natural gas and is part of the Long-Term Generation Expansion of state-run Ceylon Electricity Board.

The investor will get as 20-year power purchase agreement.

Land next to the ‘Sobhadanavi’ combined cycle plant will be made available for the developer.

According to the generation plan, the 200MW IC plant is expected to come on stream by 2026.

In 2026, a 115 MW gas turbine, a CEB owned diesel plants of 68 MW and 72 MW are due to be retired. (Colombo/June25/2026)

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Sri Lanka rupee closes steady at 305.25/35 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed fairly flat at 305.25/35 to the US dollar on Tuesday, down from 305.20/30 to the US dollar on Monday, dealers said, while bond yields up.

A bond maturing on 01.06.2026 closed at 10.75/11.05 percent.

A bond maturing on 15.12.2026 closed at 10.65/11.05 percent, up from 10.45/85 percent.

A bond maturing on 15.10.2027 closed at 10.65/11.10 percent.

A bond maturing on 15.03.2028 closed at 11.20/11.50 percent.

A bond maturing on 15.09.2029 closed at 12.10/15 percent, up from 12.05/17 percent.

A bond maturing on 01.12.2031 closed at 12.10/20 percent, up from 12.08/15 percent.

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