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Overseas Corporate Structures, Which Hide ‘Real Owners’: Foreign Business Empire  of a Sri Lankan Entrepreneur ?
Overseas Corporate Structures, Which Hide ‘Real Owners’: Foreign Business Empire  of a Sri Lankan Entrepreneur ?
Overseas Corporate Structures, Which Hide ‘Real Owners’: Foreign Business Empire  of a Sri Lankan Entrepreneur ?
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Overseas Corporate Structures, Which Hide ‘Real Owners’: Foreign Business Empire of a Sri Lankan Entrepreneur ?

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Author brilliantly reveals with documentary evidence, extensive details of incisive investigations meticulously carried out by him, in tracing foreign assets and funds hidden in a complex structure of nominee companies, established in several foreign regimes, allegedly of a phenomenally successful, politically high-profile entrepreneur, who tragically crashes in his Lear Jet Aircraft in the Straits of Malacca. Author demonstrates the modus operandi, as to how funds and assets of politically exposed persons, forced to flee their countries, with siphoned resources of impoverished people, could be hidden under complex corporate structures, set-up by professional organizations, providing nominee Directors / nominee Shareholders, with Trust Instruments, with the real beneficial owners. This Book is invaluable in instances where political leaders / politically exposed persons are ousted from office, through mass uprisings and justifiable rebellions by people, whose resources have been pillaged and plundered, further impoverishing them. Authors investigations cover secret complex corporate structures, headquartered in Hong Kong, with visible corporates operating in Malaysia, Singapore, Thailand, UK, and USA, with the ultimate beneficial owners secret trusteeship traced to an Administrator in Lichtenstein, who does not dispute the name of the real beneficial owner, but requires proof of death and devolution on claimants. This is an invaluable Book to those engaged in tracing wealth stashed away in foreign regimes by politically exposed persons hounded from their countries. Author also sheds light on judicial proceedings vis-a-vis intestate estates of issueless deceased, analysing the incongruousness of legal interpretations, and classical instances of unequal treatment before the law, tainted with politically inspired conduct. This is a valuable handbook to those involved in forensic accounting, investigation and law, and to those engaged in academic, educational and real endeavours in tracing assets and funds hidden in foreign regimes - an integral component of the UN Convention Against Corruption.
LanguageEnglish
Release dateJul 13, 2012
ISBN9781477215098
Overseas Corporate Structures, Which Hide ‘Real Owners’: Foreign Business Empire  of a Sri Lankan Entrepreneur ?
Author

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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    Overseas Corporate Structures, Which Hide ‘Real Owners’ - Nihal Sri Ameresekere

    OVERSEAS

    CORPORATE STRUCTURES,

    WHICH HIDE

    ‘REAL OWNERS’

    Foreign Business Empire

    of a Sri Lanhan Entrepreneur ?

    Nihal Sri Ameresekere

    ah1.jpg

    AuthorHouse™ UK Ltd.

    500 Avebury Boulevard

    Central Milton Keynes, MK9 2BE

    www.authorhouse. co. uk

    Phone: 08001974150

    ©2012 Nihal Sri Ameresekere. All rights reserved.

    No part of this book may be reproduced, stored in a retrieval system, or transmitted

    by any means without the written permission of the author.

    Published by AuthorHouse 07/10/2012

    ISBN: 978-1-4772-1508-1 (sc)

    ISBN: 978-1-4772-1509-8 (e)

    Any people depicted in stock imagery provided by Thinkstock are models, and such images are being used for illustrative purposes only.

    Certain stock imagery © Thinkstock.

    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.

    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

    V00_9781477215081_TEXT.pdf      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

    V00_9781477215081_TEXT.pdf      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’)

    V00_9781477215081_TEXT.pdf      Derivative / Hedging Deals

    by Citibank, Standard Chartered Bank, Deutsche Bank,

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

    V00_9781477215081_TEXT.pdf      Overseas Corporate Structures, which hide ‘Real Owners’

    Foreign Business empire of a Sri Lankan Entrepreneur ?

    V00_9781477215081_TEXT.pdf      United Nations Convention Against Corruption

    to Combat Fraud & Corruption-a Cancerous Menace

    with mere Rhetoric subverts UN Convention

    V00_9781477215081_TEXT.pdf      Transparency & Public Accountability

    Fiscal Mismanagement & Lack of Public Accountability

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

    V00_9781477215081_TEXT.pdf      Socio-Political Realities

    18621.jpg      Political & Diplomatic Hypocrisy

    18627.jpg      Expropriation Law & Ad Hominem Legislation

    V00_9781477215081_TEXT.pdf      Rule of Law & Democracy ?

    18633.jpg      Political Realities !

    18639.jpg      Judiciary sans Justice ?

    (Previously titled-’In Pursuit of Justice’)

    Image1758.JPG

    THE INTERNATIONAL ASSOCIATION OF ANTI-CORRUPTION AUTHORITIES

    Message

    Secretary General, International Association of Anti-Corruption Authorities (IAACA)

    LAACA was established to promote and facilitate the implementation of the United Nations Convention Against Corruption (UNCAC). At its inauguration in Beijing in October 2006. the Inaugural Address was delivered by President Hu Jintao of the People’s Republic of China.

    Upon the adoption of the UNCAC. then UN Secretary-General, Kofi Annan said-Corruption hurts the poor disproportionately by diverting funds intended for de\’elopment, undermining a government’s ability to provide basic senices, feeding inequality and injustice, and discouraging foreign investment and aid. UNCAC was described by Mr. Antonio Maria Costa, then Executive Director, UNODC. Vienna, as-a true global response to the global challenge posed by corruption worldwide .

    LAACA is pleased that one of its Members. Mr. Nihal Sri Ameresekere. in keeping with the objectives of IAACA. has taken a step to author and publish a series of Books, dealing with real case studies in combating the global cancerous menace of economic fraud and corruption, which threatens good governance and the well being of people.

    The contents of this series of Books would, no doubt, be of material relevance and of educational value to anti-corruption authorities globally.

    Yours sincerely,

    Image1767.JPG

    Ye Feng

    Secretary General of the International Association of Anti-Corruption Authorities

    Vice President of the International Association of Prosecutors

    International Director of Asia Crime Prevention Foundation

    Member of the Prosecuting Committee of the Supreme People’s Procuratorate of the People’s

    Republic of China

    Tel: +86 10 6520 9885

    Fax: +86 10 6811 5958

    Mobile: +86 13581631826

    E-mail: dryefeng@china.com

    ADD:No.l47 BEIHEYAN STREET, DONGCHENG DISTRICT, BEIJING 100726, CHINA TEL: 0086-10-65209645 0086-10-65209625 FAX: 0086-10-65209625

    WEBSITE: www.iaaca.org EMAIL: iaaca@spp.gov.cn

    Image1775.JPG

    1612 K Street, NW • Suite 1100

    Washington, DC, USA 20006

    202-457-0034 ■ fax: 202-457-0059

    Website: www.whistleblower.org

    Review

    In a series of books, Nihal Sri Ameresekere meticulously documents and analyzes the ways in which corrupt forces in Sri Lanka and abroad plundered the country’s resources through the 1990s and early 2000s. He argues persuasively that the policies adopted by the government of Sri Lanka during this period, at the behest of the International Monetary fund (IMF), the World Bank, and the Asian Development Bank, set the stage for widespread corruption and allowed an unprecedented illicit transfer of public wealth into privileged and private hands.

    Like many countries around the world during this period, Sri Lanka adopted a development agenda based on privatization. The government arranged the outright sale of facilities at the port of Colombo, of the national insurance company, and of the country’s prized tea plantations. In addition, Sri Lankan ministries entered into supply contracts with private banks and construction agreements with foreign firms. These arrangements, sales and transfers, which uniformly favored the private sector were, according to the international financial institutions, the high road to increased productivity, growth and social equity.

    It was not to be. Instead, through primary sources, Mr. Ameresekere’s research shows, Sri Lanka’s productive and revenue-producing enterprises were sold to insiders at fraudulently low prices through back-room deals in collaboration with officials at the highest levels of government. Corrupt or incompetent auditors took a cut and predatory domestic and foreign investors benefited handsomely.

    As an advisor to the Minister of Finance of Sri Lanka, and Chairman for a short while of the Privatization Commission, Mr. Ameresekere had access to individuals and documents that demonstrate the pervasiveness of the corruption and theft that emptied the Sri Lankan Treasury. Using primary sources, he demonstrates that systemic corruption

    was no secret to government officials, foreign investors or aid institutions. At best, those responsible looked the other way and at worst they participated. Beneficiaries included foreign banks and construction firms, the largest corporate conglomerate in Sri Lanka and financial and political elites. All of this took place in a country exhausted and impoverished by a brutal and protracted civil war.

    The series of books documents extensive public interest litigation before the Supreme Court of Sri Lanka, where Mr. Ameresekere, who is not an attorney, successfully represented the public. In addition to documenting fraudulent privatizations, he covers hedging / derivative deals by foreign banks, fiscal mis-management by the Treasury, and an international construction project that defrauded the government. These books also reveal how the World Bank has misdirected its lending to the Sri Lankan judiciary, which might have addressed the corruption issue more effectively. In total, the series is a comprehensive chronicle about combating economic crime, fraud and corruption in the private and public sectors, as now addressed by the UN Convention Against Corruption.

    For readers who seek firsthand accounts of the ways in which international financial fraud takes place, these books are invaluable. For those who want to know what has really occurred over the last twenty years of development, these books are an important contribution, for schemes such as those described by Mr. Ameresekere were surely not confined to Sri Lanka. Clearly and comprehensively, Mr. Ameresekere shows how it was that a few well-placed people appropriated the wealth of a country while claiming to strengthen its institutions and promote growth. Moreover, He shows that to date, few have been held to account and that this impunity is in itself a crime.

    Image1782.JPG

    Beatrice Edwards

    International Program Director

    Government Accountability Project

    Washington, D.C.

    Politics without principles,

    Education without character

    Science without humanity and

    Commerce without morality

    lire not only useless, but positively dangerous.’

    Bhagaban Sri Sathya Sai Baba

    Pugwash Conferences on Science and World Affairs

    Nobel Peace Prize 1995

    www.pugwash.org

    THE PRICE OF FREEDOM IS ETERNAL VIGILANCE

    The 1987 stock market crash followed by the 2001 collapse of Enron in the US, with the consequential dissolution of the accounting firm Arthur Andersen, marked the prelude. It was followed by the 2008 financial meltdown on Wall Street with the bankruptcy of Lehman Bros and the spectacular corruption of Madoff. Collectively these events marked the end of the ‘Washington Consensus’ which, from 1980-2008, placed great faith in free market policies in a sort of creed of ‘market fundamentalism. If this strategy of hard economic power needed the final nail in its coffin, that was provided by the international financial crisis which continues to engulf the world. As Ban Ki-moon has said, While recently we have heard much in this country about how problems on Wall Street are affecting innocent people on Main Street, we need to think more about those people around the world with no streets. Wall Street, Main Street, no street-the solutions devised must be for all." These solutions must embrace the principles of the UN Global Compact and the UN Convention against Corruption.

    The Washington Consensus has been replaced, we are told, by what the G-20 (which includes countries from the Global South) call the Seoul Development Goals with a recognition of the need for state intervention and for the Millennium Development Goals of the UN to be achieved. However we have still to see how things evolve. Certainly what has been ignored so far is the impact of all this on the developing countries of the world because we are dazzled by the success of China, India, Brazil and the ASEAN tiger economies. But that success was not achieved solely through the unloading of the Washington Consensus on these countries through the accelerated process of globalization. Nor were they part of the recipe in the economic cookbooks of the World Bank and the IMF. The democratic, rule-based safety nets of transparency, regulators and anti-corruption and anti-trust measures had to be devised and implemented as part of the system adopted by these developing countries whose success has now been achieved despite the World Bank and the IMF.

    In the particular case of Sri Lanka the 1977 landslide electoral victory of the pro-Western Government led by J.R.Jayawardene led politically to an entrenchment of his power through a Gaullist Constitution and the deregulation of the economy with no holds barred. Indeed Jayawardene adopted the prescription of the World Bank, the IMF and aid donors saying Let the robber barons come! They did-and robber barons within the country also emerged. The prescription included redirection of public spending from subsidies; liberalization of imports, with particular emphasis on elimination of quantitative restrictions (licensing, etc.); Liberalization of inward foreign direct investment; Privatization of state enterprises and Deregulation. These policies have been continued by successive Governments in a ‘crony capitalism’ form that continued despite the conflict with the terrorist LTTE that ended in 2009. The rule of law was frequently violated with impunity and private companies both foreign and domestic were complicit.

    In a courageous effort to assert the democratic freedoms of civil society, Nihal Sri Ameresekere set out, as a private citizen, to initiate public interest litigation to protect the resources of the people indiscriminate plunder. Trained as an accountant, he acquired a knowledge of the law astonishing for a layman earning the respect of the judges who heard him.

    His heroic endeavours have now been recorded in a series of books outlining a relentless campaign beginning with the construction of Sri Lanka’s first Hilton Hotel, the privatization of plantations and other enterprises owned by the state, through to the privatization of the Colombo Port bunkering facilities, Sri Lanka Insurance, both annulled by the judiciary, and the hedging deals between some foreign commercial banks and the Ceylon Petroleum Corporation; and also the tracing of assets hidden in foreign jurisdictions.

    The series of books also reveal the successful challenge and repeal of a controversial tax law pronounced by the judiciary to have defrauded public revenue, to be antithetic to the rule of law and violative of the Universal Declaration of Human Rights and International Covenant on Civil & Political Rights, and a successful challenge before the judiciary of the Appropriation Bill revealing the lackadaisical management of state funds.

    It is a dramatic and well-documented record of the true empowerment of civil society in the defence of the wealth of the people from illegal and opaque deals blessed by a democratically elected government in the name of development. The books deserve a wide reading public as an inspiring example of the power of civil society.

    Image1847.JPG

    Jayantha Dhanapala

    President

    ‘Looking alike on pleasure and pain, gain and loss, victory and defeat, then be ready for fight. If you fight in this spirit, you will not incur sin.’

    ‘Hut if you do not fight this righteous battle, you would neglect your duty and lose your fame and incur sin. And you will be lowered in the estimation of those who thought highly of you, who will think that you nave desisted from fighting through fear.’

    ‘Action alone is your sphere, its fruit should never he desired by you. Do not make the fruit of action your motive. Do your actions without attachment to their fruits, indifferent to success or failure.’

    Image1856.JPG

    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 14th 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

    1.        PREAMBLE

    2.        CHAPTER I-GENERAL PROVISIONS

    Article 1        Statement of Purpose

    Article 2        Use of terms

    Article 3        Scope of application

    Article 4        Protection of sovereignty

    3.        CHAPTER II-PREVENTIVE MEASURES

    Article 5        Preventive anti-corruption policies and practices

    Article 6        Preventive anti-corruption body or bodies

    Article 7        Public sector

    Article 8        Codes of conduct for public officials

    Article 9        Public procurement and management of public finances

    Article 10        Public reporting

    Article 11        Measures relating to the judiciary and prosecution services

    Article 12        Private sector

    Articlel3        Participation of society

    Article 14        Measures to prevent money-laundering

    4.        CHAPTER III- CRIMINALIZATION AND LAW ENFORCEMENT

    Article 15        Bribery of national public officials

    Article 16        Bribery of foreign public officials and officials of public

    International organizations

    Article 17        Embezzlement, misappropriation or other diversion of property

    by a public official

    Article 18        Trading in influence

    Article 19        Abuse of functions

    Article20        lllicit enrichment

    Article 21        Bribery in the private sector

    Article 22        Embezzlement of property in the private sector

    Article 23        Laundering of proceeds of crime

    Article 24        Concealment

    Article25        Obstruction of justice

    Article 26        Liability of legal persons

    Article 27        Participation and attempt

    Article 28        Knowledge, intent and purpose as elements of an offence

    Article 29        Statute of limitations

    Article 30        Prosecution, adjudication and sanctions

    Article 31        Freezing, seizure and confiscation

    Article 32        Protection of witnesses, experts and victims

    Article 33        Protection of reporting persons

    Article 34        Consequences of acts of corruption

    Article 35        Compensation for damage

    Article 36        Specialized authorities

    Article 37        Cooperation with law enforcement authorities

    Article 38        Cooperation between national authorities

    Article 39        Cooperation between national authorities and the private sector

    Article 40        Bank secrecy

    Article41        Criminal record

    Article 42        Jurisdiction

    5.        CHAPTER IV-INTERNATIONAL COOPERATION

    Article 43        International cooperation

    Article 44        Extradition

    Article 45        Transfer of sentenced persons

    Article 46        Mutual legal assistance

    Article 47        Transfer of criminal proceedings

    Article 48        Law enforcement cooperation

    Article 49        Joint investigations

    Article 50        Special investigative techniques

    6.        CHAPTER V-ASSET RECOVERY

    Article 51        General provision

    Article 52        Prevention and detection of transfers of proceeds of crime

    Article 53        Measures for direct recovery of property

    Article 54        Mechanisms for recovery of property through international

    cooperation in confiscation

    Article 55        International cooperation for purposes of confiscation

    Article 56        Special cooperation

    Article 57        Return and disposal of assets

    Article 58        Financial intelligence unit

    Article 59        Bilateral and multilateral agreements and arrangements

    7.        CHAPTER VI-TECHNICAL ASSISTANCE AND INFORMATION EXCHANGE

    Article 60        Training and technical assistance

    Article 61        Collection, exchange and analysis of information on corruption

    Article 62        Other measures: implementation of the Convention through economic development and technical assistance

    8.        CHAPTER VII-MECHANISMS FOR IMPLEMENTATION

    Article 63        Conference of the States Parties to the Convention

    Article 64        Secretariat

    9.        CHAPTER VIII-FINAL PROVISIONS

    Article 65        Implementation of the Convention

    Article66        Settlement of disputes

    Article 67        Signature, ratification, acceptance, approval and accession

    Article 68        Entry into force

    Article 69        Amendment

    Article 70        Denunciation

    Article 71        Depositary and languages

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

    Image1863.JPG

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

    Lee Kuan Yew

    From The Dhammapada¹ of Lord Gauthama Buddha

    about 2550 years ago…….

    28434.jpg           Well done is that action of doing which one repents not later, and the fruit of which one, reaps with delight and happiness.

    28438.jpg     Should a person do good, let him do it again and again. Let him find pleasure therein, for blissful is the accumulation of good.

    28442.jpg     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.

    28446.jpg     Those who know the essential to be essential and the unessential to be unessential, dwelling in right thoughts, do arrive at the essential.

    28452.jpg     Those who discern the wrong as wrong and the right as right—upholding right views, they go to realms of bliss.

    28456.jpg     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.

    28460.jpg     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.

    28465.jpg     Easy is life for the shameless one who is impudent as a crow, is backbiting and forward, arrogant and corrupt.

    28469.jpg     One who, while himself seeking happiness, oppresses with violence other beings who also desire happiness, will not attain happiness hereafter.

    28474.jpg     All tremble at violence; all fear death. Putting oneself in the place of another, one should not kill nor cause another to kill.

    28478.jpg     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.

    28428.jpg     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-Mahawamsa² "-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 ?

    -Nihal Sri Ameresekere

    Image1871.JPG

    Contents

    Chapter 1 INTRODUCTION

    Chapter 2 PREAMBLE

    Chapter 3 TESTAMENTARY PROCEEDINGS

    Chapter 4 ENDEAVOUR IN SUPREME COURT FOR A SETTLEMENT FAILS

    Chapter 5 INVESTIGATIONS INTO FOREIGN BUSINESS INTERESTS AND/OR FOREIGN ASSETS AND/OR FOREIGN BUSINESS TRANSACTIONS

    i INTERIM REPORT - I

     ii INTERIM REPORT-II

    iii INTERIM REPORT-III

    Chapter 6 JUDGMENTS DELIVERED BY THE SUPREME COURT

    Chapter 7 UNEQUAL TREATMENT BEFORE THE LAW

    Appendices

    I English Media Exposes

    II Petition in District Court Testamentary Case No. 30927/T

    III Petition in District Court Testamentary Case No. 31166/T

    IV Estate Duty Declaration

    V Preliminary Review

    VI Joint-Report

    VII Sale & Purchase Agreement, vis-á-vis, part of Foreign Assets

    VIII Petition & Affidavit in CA Writ No. 1471/79, and Judgement in SC (Appeal) 14/93

    IX A Report of Criminal Investigation Department, Sri Lanka

    B Report of Civil Aviation Department, Malaysia

    X Exchange Control Act

    XI United Nations Convention Against Corruption (UNCAC)

    XII My deep gratitude to ……………..

    1

    INTRODUCTION

    The United Nations Convention Against Corruption (vide-Appendix XI), which was adopted on 31st October 2003 by Resolution 58/4 of the United Nations General Assembly, entered into force on 14th December 2005. The International Association of Anti-Corruption Authorities was inaugurated in October 2006 to promote and facilitate the implementation of the United Nations Convention Against Corruption-(United Nations Convention Against Corruption-to Combat Fraud & Corruption-a Cancerous Menace-with Mere Rhetoric Subverts UN Convention-by same Author).

    The Preamble and Articles of the United Nations Convention Against Corruption are given on pages x, xi and xii hereinbefore. Sri Lanka ratified the United Nations Convention Against Corruption {vide-Appendix XI), on 31st March 2004, and thereby stands obligated and bound to duly observe, perform, fulfill and discharge its duties and responsibilities, as stipulated in the Articles of United Nations Convention Against Corruption; and is subject to being periodically reviewed on the progress made, in the fulfillment of its obligations under the United Nations Convention Against Corruption. (United Nations Convention Against Corruption-to Combat Fraud & Corruption-a Cancerous Menace-with Mere Rhetoric Subverts UN Convention-by same Author).

    Significantly, the United Nations Convention Against Corruption (vide-Appendix XI), encompasses, not only the State and the public sectors, but also the private sector, as morefully borne out by the Articles of the United Nations Convention Against Corruption, with the Objectives as set out in the Preamble, inter-alia, emphasizing the need to safeguard integrity and foster a culture of rejection of corruption, with a comprehensive and multi-disciplinary approach to effectively prevent and combat corruption.

    With the development of global trade and transnational movement of funds and assets, the vitally important feature and mechanism, which is brought into focus in giving effect to the United Nations Convention Against Corruption (vide-Appendix XI), is the development of skills, education, training and ability, to trace assets stashed away in foreign regimes, and to take measures needed for the recovery of such funds and assets, together with endeavours to recover such funds and assets for the benefit of the impoverished people of a country, in instances of such funds and assets having been syphoned from the resources of the impoverished people of that country, particularly by those wielding political power.

    Article 52 of the United Nations Convention Against Corruption (vide-Appendix XI), emphasizes the necessity for enhanced scrutiny of persons, who are entrusted with prominent public functions and their family members and close associates known as, ‘Politically Exposed Persons’-’PEPs’.

    The desperate need for tracing of funds and assets syphoned through corrupt means from the resources of the impoverished people of a country by those who have wielded political power, and have been ousted through the revolt of such impoverished people, is a growing phenomenon in the contemporary world.

    Invariably such funds and assets are hidden in foreign countries, under a mire of complex nominee corporate structures and secret bank accounts, which culture is being progressively dismantled today, with financial institutions and those others handling funds and assets, being obligated to know and disclose the names of the real beneficial owners of such funds and assets, with the progressive implementation of the United Nations Convention Against Corruption (vide-Appendix XI).

    It is in such scenario, that this Book has been compiled, to afford the complex details of a real case study in my own experience, in tracing foreign business interests and/or foreign assets and/or foreign business transactions, allegedly of a phenomenally successful entrepreneur, on inquiries and investigations which I had carried out, in the context of an ownership battle between the heirs of the Estate of such entrepreneur, in the circumstances of such entrepreneur, having apparently met with an unexpected, untimely, tragic end, with his own Lear Jet Aircraft having crashed, with him onboard.

    It had been reported that this phenomenally successful entrepreneur, when called upon to declare his foreign assets, under and in terms of Sri Lanka’s Exchange Control Act No. 24 of1953, as amended, on or about 19th January 1982, had declared as true and correct, under his own hand, as being ‘Nil’, specifically under the following headings of the requisite gazetted Form.

    I.    a) Assets and Liabilities with Banks

    b)    Assets and Liabilities in Companies, Partnerships, Turf Accountants, etc.

    c)    Assets and Liabilities with Building Societies, Finance Houses

    d)    Assets and Liabilities with Individuals, including Monies Lent or Due for Services Rendered

    II.    Investments-eg. Debentures, Shares, Bonds, Trade Investments, Units

    III.   Immovable Property

    IV.   Movable Property

    V.    Particulars of Any Other Assets

    VI.   a) Value of AII Assets

    b)    Total Liabilities

    c)    NetValueofAssets(a)-(b)

    In the circumstances of such phenomenally successful entrepreneur having been only a beneficiary of a Trust/s, would not the foregoing answers be legitimately correct ?

    Invariably, the prima-facie beneficial owner/s of such complex corporate structures, with nominee Shareholders, would be a Trustee/s, who may be lawfully precluded, as a Trustee/s, from the obligation to disclose the funds and assets to any other person/s, other than to the real beneficiaries of such trust and/or the legitimate heirs ? In this case study the legitimate heirs did have a response of communication from such a Trustee/s.

    On the other hand, where the real beneficial owner/s, as beneficiaries under trusts are alive, then would not a real issue arise, as to how such Trustee/s could be lawfully compelled to disclose such funds and assets to any other person/s in the first instance, for such funds and assets to be recovered by the people, from whom such funds and assets had been pillaged and plundered, and syphoned to foreign regimes, to be hidden in a mire of corporate structures, with nominee Shareholders and Trustees as prima-facie owners ?

    In seeking ‘Mutual Legal Assistance’ under and in terms of Chapter V of the United Nations Convention Against Corruption (vide Appendix XI), countries insist upon specific particulars and details of funds and assets sought to be recovered by law enforcement authorities in other countries. Hence, given the foregoing phenomenon, would it not be a challenging obstacle to trace the funds and assets sought to be recovered, as provided for in the Articles of Chapter V of the United Nations Convention Against Corruption (vide Appendix XI) ?

    This Book-Overseas Corporate Structures, which hide ‘Real Owners’ , revealing real forensic accounting, inquiries, investigations and endeavours, has been compiled purely to demonstrate and develop skills and educate for training purposes, in tracing funds and assets hidden in foreign regimes in a complex mire of nominee companies, as a contribution towards the facilitation of the promotion of the implementation of the United Nations Convention Against Corruption (vide-Appendix XI).

    2

    PREAMBLE

    I have had the occasion to have met Philip Upali Wijewardene, during the years 1968/69, when I was apprenticing at Turquand, Youngs & Co., Chartered Accountants, now known as Ernst & Young, at that time, as an Article Clerk, undergoing training to become a professional accountant, preparing for the examinations of the Institute of Chartered Accountants of Sri Lanka and the Institute of Chartered Management Accountants of UK.

    A very proficient and intelligent Partner of Turquand, Youngs & Co., Chartered Accountants, R. Vijayasekaran, F.C.A., F.C.M.A., was rendering advice at that time to Philip Upali Wijewardene. In such circumstances, Turquand, Youngs & Co., Chartered Accountants were entrusted by Philip Upali Wijewardene, with two assignments, which were carried out by their said Partner, R. Vijayasekaran.

    One assignment was to formulate and implement a cost accounting system for Philip Upali Wijewardene’s confectionary factory, which was then manufacturing and marketing a very popular brand of sweets, under the brand name ‘Delta’. The other assignment, was to design and implement operational and accounting documentations and systems for a Transistor Radio assembly facility, which Philip Upali Wijewardene was then installing, to assemble and market Transistor Radios, under the brand name ‘ UNIC\

    I was tasked by Turquand, Youngs & Co., Partner R. Vijayasekaran, to assist him with the above two assignments. In such circumstances, I had to work for about two months at the Bloemendhal Office of Philip Upali Wijewardene. It is whilst working on these two assignments, that I had to meet Philip Upali Wijewardene on a few occasions, to discuss matters pertaining to these two assignments.

    Later, I came to realize that this was the very nascent stage in the development of the vast business empire of Philip Upali Wijewardene, which subsequently expanded into several ventures, both in Sri Lanka and overseas, including in tea, rubber, coconut and cocoa plantations, assembly of motor vehicles, chocolate and health drink manufacture, newspapers, aviation, etc., with Philip Upali Wijewardene becoming a legendary personality.

    His cousin J.R. Jayawardene having won a landslide victory, as the Leader of the United National

    Party, with an unbelievable 576th majority of seats at the General Elections of 1977, and he having initially assumed Office, as the Prime Minister of Sri Lanka, later with a constitutional amendment passed by the then National State Assembly, J.R. Jayawardene assumed Office, as the first Executive President of Sri Lanka.

    President J.R. Jayawardene immediately liberalized the economy, and mooted the establishment of free trade zones in Sri Lanka, in addition to the gigantic Mahaweli River diversion and development scheme, to develop several major reservoirs to produce electricity and to open up newly cultivable areas of land for the settlement of people and development of new townships and economic centres.

    Philip Upali Wijewardene, as a visionary, was appointed by President J.R. Jayawardene, to spearhead the establishment of the free trade zones and promote foreign direct investments into Sri Lanka, for which the Greater Colombo Economic Commission, later known, as the Board of Investment of Sri

    Lanka, was established by Law No. 4 of 1978, enacted by the then National State Assembly, and Philip Upali Wijewardene became the first Chairman thereof.

    Later Philip Upali Wijewardene endeavoured to engage in politics, nursing a southern electorate of Sri Lanka. It was indeed poignant, that only I, and a very few other persons, were aware that Philip Upali Wijewardene was flying back on 13th February 1983 from Kuala Lumpur, Malaysia to Sri Lanka, to assume political Office, as the Minister of Finance of Sri Lanka.

    As to how President J.R. Jayawardene had strategised the maneuver to effect this, I did not know. However, the then Chairman of the United National Party, N.G.P Panditharatne, Precedent Partner, Ford, Rhodes, Thornton & Co. Chartered Accountants, who was also the Chairman of the Mahaweli Authority, confidentially disclosed such fact to me.

    N.G.P. Panditharatne, as Chairman of the United National Party, no sooner the United National Party Government, after the landslide General Election victory, was formed in 1997, caused me to be appointed to be a part-time Director of the monopolistic State Pharmaceutical Corporation, Chairperson of which, was President J.R. Jayawardene’s brother’s wife, Dr. (Mrs) Gladys Jayawardene, who later in 1989 was brutally killed by southern insurgents.

    Thereafter in 1980, President J.R. Jayawardene, exercising his executive powers appointed me, as the Finance Director, that too, on a part-time basis, among others to a special 5 Member Board of Directors, to manage the operations of the all island Bus Transport Service, operated by the Sri Lanka Transport Board, of which 5 Member Special Board of Directors, the Chairman was Dr. Gamini Wijesekere, later a General Secretary of the United National Party, and who together with several others also was tragically killed in a northern terrorist bomb blast at an election rally in 1994.

    A few days before 13th February 1983, N.G.P. Panditharatne, Chairman of the United National Party, summoned me to the United National Party Headquarters, and persuaded me, much against my personal wishes, to agree to accept Office, as Chairman People’s Bank, a major State Bank with island-wide operations. N.G.P. Panditharatne was not a person, who would take ‘no ‘for an answer.

    It is during such discussion, that N.G.P. Panditharatne took out a piece of note paper from his shirt pocket and scribbled my name, as Chairman, People’s Bank, among other names of persons, which had been jotted down on the said note paper, to be appointed to other institutions, which came under the Ministry of Finance.

    It was on this occasion that N.G.P. Panditharatne confided in me, that Philip Upali Wijewardene was returning from overseas on 13th February 1983 to be appointed, as the Minister of Finance, and that the Heads of all institutions coming under the purview of the Ministry of Finance were to be changed, except the then Chairman of the Bank of Ceylon, Nissanka Wijewardane.

    However, Philip Upali Wijewardene tragically did not arrive in Sri Lanka on 13th February 1983, with his Lear Jet Aircraft, which had taken off from Kuala Lumpur Airport, Malaysia, having crashed shortly after take-off, resulting in a major, but fruitless, search for the wreckage and the bodies, having been initiated by President J.R. Jayawardene, with the assistance of several foreign countries.

    Philip Upali Wijewardene was married to Lakmani Ratwatte, daughter of Dr. Sivali Ratwatte, a brother of Prime Minister Sirima Dias Bandaranaike, mother of President Chandrika Bandaranaike Kumaratunga. At the time of the Lear Jet Aircraft crash on 13th February 1983, Philip Upali Wijewardene had no children, nor had he left a Last Will and Testament.

    In such circumstances, in terms of the law of intestate succession in Sri Lanka, Philip Upali Wijewardene’s Estate, devolved in the proportion of 50% to his wife, namely, Lakmani Ratwatte Wijewardene, and 50% to his two sisters, namely, Helena Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle, in equal Shares of 25% to each of them.

    In the given facts and circumstances, disputes had arisen between the wife of Philip Upali Wijewardene, namely, Lakmani Ratwatte Wijewardene, and his two sisters, namely, Helena Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle, with Testamentary Proceedings having been instituted in the District Court of Colombo by both parties. Such disputes had continued notwithstanding the initial Terms of Settlement, which had been entered into by and between these parties, as morefully set out in this Book.

    It was in the context of the foregoing disputes, that Philip Upali Wijewardene’s two sisters, namely, Helena Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle, in or about 1994 came to see me, on a referral made by M. Radhakrishnan, Senior Partner, D.N. Thurairajah & Co., Attorneys-at-Law, seeking my advice and assistance, vis-a-vis, unraveling and understanding the complexities of the business empire of Philip Upali Wijewardene, which formed a part and parcel of his Estate.

    Even though Philip Upali Wijewardene’s two sisters, namely, Helena Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle, came to see me initially on two occasions, since Philip Upali Wijewardene’s wife, namely, Lakmani Ratwatte Wijewardene, was the first cousin, of a first cousin of my wife, on both the occasions, I declined to consent to get involved to render any advice and assistance, not heeding their implorations and endeavours to insistently persuade me.

    Nevertheless, on the third occasion they came to see me, they desperately posed a very disturbing question-that ‘if everyone was reluctant to advise and assist them, two elderly ladies’,-one of whose husband, Dr. Stanley Wijesundera, a Vice Chancellor of the University of Colombo had also been assassinated by the southern insurgents,-’as to how they could get advice and assistance, which they direly needed in such circumstances ? ‘

    Confronted with such disturbing question, I, having spoken with my wife, agreed to get involved, to advise and assist them in the matter. This led me to reviewing, examining and analyzing relevant documents and facts, to understand the complexities of the business empire of Philip Upali Wijewardene, and to co-ordinate with and assist their Lawyers, with the relevant facts pertaining thereto.

    It is in such circumstances, that I carried out inquiries and investigations, particularly probing into the foreign business interests and/or foreign assets and/or foreign business transactions, allegedly of Philip Upali Wijewardene, as morefully set out in this Book, for their understanding, and that of their Lawyers, and to be tendered, as had been required, to the Supreme Court of Sri Lanka , as set out in this Book.

    3

    TESTAMENTARY PROCEEDINGS

    Philip Upali Wijewardene was believed to have died on 13th February 1983, with his private Lear Jet Aircraft having gone missing shortly after taking off from Kuala Lumpur, Malaysia, to fly to Colombo, Sri Lanka, with a wheel of the Aircraft having been subsequently found by fishermen fishing in the Malacca Straits, between the Malaysian and Indonesian sea coasts, which wheel had later been positively identified, as that of the said ill-fated Lear Jet Aircraft, (vide-Appendix IX A & B)

    Neither Philip Upali Wijewardene, nor any other person, who had been onboard the said Lear Jet Aircraft, had been seen or heard of by anyone of the persons, who would have normally seen or heard of them, had they been alive. However, pronouncement of his date of death was a matter, which had to be adjudicated upon by a Court of Law, in the circumstances of the non-recovery and identification of his body (See Chapter 6)

    At the time of the above Lear Jet Aircraft crash on 13th February 1983, Philip Upali Wijewardene, though married, had no children by the marriage, nor had he left a Last Will and Testament. He was well known to have built up a very large business empire in Sri Lanka, as well as in foreign countries, including Malaysia, Singapore, Hong Kong, Thailand, UK and US.

    In such circumstances of his death, according to applicable common law of intestate succession in Sri Lanka, 50% of his Estate devolved on his widow, and the balance 50% devolved equally on his only two sisters, namely, Helena Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle, each of whom thereby became entitled to 25% of the Estate of Philip Upali Wijewardene, immediately upon his death.

    Applications for Letters of Administration of the Estate of Philip Upali Wijewardene

    His wife, Lakmani Ratwatte Wijewardene had not instituted Testamentary Proceedings seeking Letters of Administration to administer the Estate of Philip Upali Wijewardene, but however, together with her father, Sivali Ratwatte had taken over the possession, control and management of the local and allegedly foreign business empire of Philip Upali Wijewardene, without having taken cognizance of the foregoing rights of inheritance by the two sisters of Philip Upali Wijewardene to 50% of his intestate Estate.

    In such circumstances of the disappearance of Philip Upali Wijewardene, with his Lear Jet Aircraft crash with him onboard on 13th February 1983, his two sisters, namely, Helena Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle, nearly years thereafter had filed a Petition dated 7th October 1987 in Testamentary Case No. 30927/T in the District Court of Colombo, Sri Lanka, seeking Letters of Administration to the Estate of Philip Upali Wijewardene, under and in terms of the provisions of the Civil Procedure Code-(vide Appendix II).

    In support of their Petition-(vide Appendix II, the two sisters, namely, Helena Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle had filed Letter dated 24th September 1987 from M/s Shook, Lin & Bok, Advocates & Solicitors of Kuala Lumpur, Malaysia, together with a Report of Investigation by the Malaysian Department of Civil Aviation, consequent to a search carried out on the crash of the Lear Jet Aircraft, in which Philip Upali Wijewardene and 5 others had been onboard-(vide Appendix IX B); and they had taken up the position that under aviation and other relevant laws that Philip Upali Wijewardene had, in fact, died and that he had died intestate and issueless on 13th February 1983.

    The above Petition having been supported on 8th October 1987, Learned Addl. District Judge of Colombo, Kumar Ekaratne Esqr., observing that there is no positive proof of the death of Philip Upali Wijewardene before Court, had declined to make any Order and had suggested that the parties should refer the matter to the Public Trustee of Sri Lanka; but however on further submissions having been made by the Counsel for the two sisters of Philip Upali Wijewardene, namely, Helena Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle, the Learned Addl. District Judge had made Order to enter and issue Order Nisi and Notice on the Respondent, the wife, of Philip Upali Wijewardene, namely, Lakmani Ratwatte Wejewardene and to publish the Notice of Order Nisi in two Newspapers.

    However, this Order had not been complied with by reason of the Order Nisi having not been signed by the Learned Addl. District Judge of Colombo, Kumar Ekaratne Esqr.

    Thereafter, on 19th October 1987, the Respondent, the wife, of Philip Upali Wijewardene, namely, Lakmani Ratwatte Wejewardene had filed Petition in the aforesaid District Court of Colombo Testamentary Case No. 30927/T, seeking Orders of Court to have the Notice issued on her recalled, and the Order Nisi entered vacated. Upon the matter having being taken up significantly on the very same day, 19th October 1987, the same Learned Addl. District Judge of Colombo, Kumar Ekaratne Esqr., having vacated the Order Nisi as aper-incuriam Order, had recalled the Notice issued.

    Having been aggrieved by the said Order made on 19th October 1987 by the Learned Addl. District Judge of Colombo, Kumar Ekaratne Esqr., the two sisters of Philip Upali Wijewardene, namely, Helena Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle, had filed Petition dated 6th November 1987 in CA LA No. 139/87 and Revision Application No. 1178/87 in the Court of Apeal, seeking Leave to Appeal from / Revision of the said Order of 19th October 1987 of the District Court of Colombo.

    The Respondent, the wife of Philip Upali Wijewardene, namely, Lakmani Ratwatte Wijewardene, had filed her Statement of Objections thereto dated 29th April 1988 in the aforesaid Applications made by the two sisters of Philip Upali Wijewardene, namely, Helena Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle to the Court of Appeal.

    In the meantime, the Respondent, the wife of Philip Upali Wijewardene, namely, Lakmani Ratwatte Wijewardene, had also filed Petition dated 28th April 1988 instituting a fresh Testamentary Case No. 31166/T in the District Court of Colombo-(vide Appendix III), claiming Letters of Administration in her capacity, as the widow of the Estate of Philip Upali Wijewardene, inter-alia, declaring that-

    -    Philip Upali Wijewardene was last seen or heard in Kuala Lumpur, Malaysia on 13th February 1983, when he left on board an Aircraft with 5 others for Sri Lanka, and that the said Aircraft did not arrive as scheduled in Sri Lanka on 13th February 1983 or any other destination or airport on 13th February 1983 or on any other day thereafter and that in the aforesaid premises that Philip Upali Wijewardene was dead.

    -Section 108 of the Evidence Ordinance had provided for a 7 year period to lapse before presumption of death of a person in such circumstances and that the said Section 108 of the Evidence Ordinance had been subsequently amended on 21st April 1988 by substitution of a period of ‘1 year in place of 7 years’ and accordingly the amended Section 108 of the Evidence Ordinance now applies

    In fact Section 108 of the Evidence Ordinance had been so amended by Act No. 10 of 1988, which had come into force on 21st April 1988, and the wife of Philip Upali Wijewardene, namely, Lakmani Ratwatte Wijewardene had incidentally filed the aforesaid Petition one week thereafter on 28th April 1988.

    Nevertheless in filing the aforesaid Petition in the said District Court of Colombo Testamentary Case No. 31166/T-(vide Appendix III), the wife of Philip Upali Wijewardene, namely, Lakmani Ratwatte Wijewardene had, in compliance with Section 24 of the Estate Duty Act No. 13 of 1980, tendered the Estate Duty Declaration also dated 28th April 1988 in respect of the Estate of Philip Upali Wijewardene, expressly declaring that Philip Upali Wijewardene died on or about 13th February 1983.-(vide Appendix IV)

    Consequently on 20th May 1988, the Learned Addl. District Judge of Colombo made Order directing that :

    i.    Order Nisi be published in a Newspaper

    ii.   Notice of Order Nisi be issued on the Respondents, namely, Helena Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle

    iii.   Estate Duty Declaration of Property be forwarded to the Commissioner of Inland Revenue

    iv.   Death Certificate be produced

    Thereafter on 18th January 1989, the two sisters of Philip Upali Wijewardene, namely, Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle, and his wife, Lakmani Ratwatte Wijewardene had entered into the following Terms of Settlement, whereby the two sisters of Philip Upali Wijewardene, namely, Anoja Devi Wijewardene and Anula Kalyana Devi Attygalle had agreed to withdraw the District Court of Colombo Testamentary Case No. 30927/T and the Leave to Appeal Application No. 139/87 and the Revision Application No. 1178/87 filed in the Court of Appeal, and to consent to the grant of Letters of Administration to the wife of Philip Upali Wijewardene, namely, Lakmani Ratwatte Wijewardene in the District Court of Colombo Testamentary Case No. 31166/T, on the basis of such Terms of Settlement entered into on 18th January 1989 given below:

    Settlement Agreement dated 18th January 1989

    ESTATE OF PHILIP UPLAI WIJE WARDENE

    TERMSOFSETTLEMENT

    Agreement in respect of the Estate of Philip Upali Wijewardene (hereinafter referred to as the deceased) dated this Eighteenth day of January, one Thousand Nine Hundred and Eighty Nine made and entered into at Colombo by and between (1) Mrs. Helena Anoja Devi Wijesunders (nee Wijewardene) of No. 111, 5th Lane, Colombo 3 and (2) Mrs. Anula

    Kalyanadevi Attygalle (nee wijewardene) of No. 30, Munidasa Cumaratunga Mawatha, Colombo 3. (hereinafter sometimes collectively referred to as the Parties of the First Part) of the One Part and Mrs. Lakmani Ratwatte Wijewardene (nee Ratwatte) of No. 38, Munidasa Cumaratunga Mawatha, Colombo 3 (hereinafter referred to as "the Party of the Second Part) of the other Part.

    WHERE IT IS AGREED AS FOLLOWS :

    A.      1) The Party of the Second Part agrees to the appointment of the Parties of the First Part as members of the Boards of Directors of all Companies referred to in the First Schedule hereto and to cause the Boards of each of the said Companies to appoint the Parties of the First Part to the said Boards within 7 days from the date of execution of this Agreement and to pay them each the all inclusive sum of Rupees Five Thousand (Rs. 5000/-) per mensem on account of and as Directors’ fees, allowances, cost of travelling and transport to and from Board Meetings and other remuneration and expenses whilst they so act as Directors SUBJECT to the Parties of the First Part agreeing not to exercise their powers consequent to such appointments to nominate alternate Directors to the said Boards.

    2) Although the Party of the Second Part had agreed also to appoint the Parties of the First Part as Directors of the Companies referred to in the Second Schedule hereto, at the request of the Parties of the First Part, the Party of the Second Part agrees to the appointment of Shalitha Lakshman Wijesundera and Sudhammika Keminda Attygalle (the sons of the Parties of the First Part) as their Nominees and in their stead as members of the Boards of Directors of all Companies referred to in the Second Schedule hereto and will cause the Boards of the Companies referred to in the Second Scheduled to appoint the said Shalitha Lakshman Wijesundera and Sudhammika Keminda Attygalle as its Directors within 7 days from the date of execution of this agreement subject to their agreeing not (i) to exercise their powers in consequence of such appointments to nominate alternate Directors to the said Boards and (ii) to claim while being employed by and or all of the Companies referred to in the Schedules any sum or sums by way of Directors’ fees, allowances or otherwise (nothing excepted), it being understood that their only entitlements being restricted to what is due, by way of salary, allowances and other remuneration on account of their employment in any of the Companies referred to in the Second Schedule hereto and in the event of their receiving or becoming entitled to any payment in addition thereto by virtue of such appointments surrender and pay the entirety of same to Upali Management Services Limited.

    B.      Subsequent to the execution of this Agreement and simultaneously with the appointments referred to in Clause ‘A’ on the terms conditions and stipulations referred to therein.

    1) The Parties of the First Part will consent to Letters of Administration in respect of the said Estate of the deceased being issued to the Party of the Second Part in District Court of Colombo Case No. 31166 Testamentary Jurisdiction as widow of the deceased without her providing any security for this purpose other than a personal Bond by her subject to the terms and conditions set out in Clause ‘C’ hereof and to her being registered in the books of all Companies referred to in the Schedules-hereto enabling the Party of the Second Part to exercise the voting rights in respect of the shares of the deceased in all the Companies referred to in the Schedules hereto; and

    2) The Parties of the First Part shall withdraw District Court of Colombo Case No. 30927/ Testamentary Jurisdiction, Court of Appeal Revision Application No. 1178 of 1987, Court of Appeal Leave to Appeal Application No. 139 of 1987, Notice of Appeal dated 6th November 1987, Petition of Appeal dated 14th December 1987 in the said Case No. 30729 and the allegations made in Paragraph Seven (7) of the Petition dated 7th October 1987 in the said Case No. 30928 against the Party of the Second Part and the Party of the Second Part agrees to the same being withdrawn without costs.

    C.      1) While the Party of the Second Part is the Administratrix of the said Estate of the deceased, the Party of the Second Part undertakes to act in a responsible and fair manner in the best interests of the said Estate of the deceased and not to act in a manner detrimental to the said Estate of the deceased or to anyone of the intestate heirs of the deceased.

    2)      While the Party of the Second Part is the Administratrix of the said Estate of the deceased, the Party of the Second Part agrees that none of the assets belonging to the said Estate of the deceased shall be disposed of or encumbered in any manner whatsoever by the Party of the Second Part without the consent of the Parties of the First Part or without an order of Court obtained for the purpose.

    3)      While the Party of the Second Part is Administratrix of the said Estate of the deceased, the Party of the Second Part undertakes to furnish accounts in respect of each and every year of her administration of the said Estate of the deceased to the Parties of the First Part before the Thirty First day of December in each and every year commencing 31st March 1990.

    4)      While the Party of the Second Part is Administratrix of the Estate of the deceased, the Party of the Second Part undertakes not to exercise her voting rights in respect of the creation of new shares in the capital of the Companies referred to in the Schedules hereto and/or to issue any unissued shares of any or all of the said Companies in the Schedules hereto mentioned unless with the written consent of the Parties of the First Part or as directed by competent Court of Law.

    D.      The Parties of the First Part agree with the Party of the Second that the Parties of the First Part and their said sons Shalitha Lakshman Wijesundera and Sudhammika Keminda Attygalle will while they are Directors as aforesaid act in the best interests of the said Companies and the said Estate of the deceased.

    E.      The Parties of the First Part and the Party of the Second Part reserve unto themselves the right to vary by mutual agreement the provisions of this Agreement provided and subject however to the condition that nothing herein shall mean or be interpreted to mean that it shall in any manner or to any extent in any circumstances be incumbent or obligatory for the Parties of the First Part or the Party of the Second Part to agree or consent to any variation.

    F.      The Parties of the First Part and the Party of the Second Part agree that all previous agreements shall be superseded and rescinded by this Agreement which shall be valid while the Party of the Second Part continues as Administratrix of the said Estate of the deceased.

    THE FIRSTS CHEDULE REFERRED TO ABOVE :

    NAMES OF COMPANY

    Asian Investments (Pvt) Ltd.

    Upali Enterprises Limited Upali

    Investment Holdings Limited

    THE SECOND SCHEDULE REFERRED TO ABOVE :

    NAMES OF COMPANY

    1.    Upali Management Services Limited

    2.    Upali Consumer Products Limited

    3.    Upali Electronics Company Limited

    4.    Upali Motor Company Limited

    5.    Upali Trading Company Limited

    6.    Upali Travels Limited

    7.    Upali Aviation (Pvt) Limited

    8.    Upali Plantations (Pvt) Limited

    9.    Upali Nurseries Limited

    10.    Upali Plantation Management Services Limited

    11.    Upali Agroproducts Limited

    12.    The Niriwatte Company Limited

    13.    Fairlawn Estates Limited

    14.    Upali Investments Limited

    15.    Ceylon Chocolates Limited

    16.    Upali Newspapers Limited

    IN WITNESS WHEREOF the said parties have hereunto and to three others of the same tenor and date as these Presents set their respective hands at Colombo on the date aforementioned.

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    In due performance and fulfillment of the foregoing, a Motion dated 25th January 1989 having been filed in the Court of Appeal on behalf of the

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