At the weekly ministerial meeting on Wednesday, they were discussing a recommendation by Foreign Minister Mangala Samaraweera to sign a Memorandum of Understanding on the establishment of a Joint Committee for Consular Affairs between Sri Lanka and the United Arab Emirates (UAE).

Minister Champika Ranawaka said a newspaper had published details of a bank account held by a former VVIP’s son. He said the ministers should be told about the situation since they were unaware of what was going on. It became clear none of the ministers was aware.

Samaraweera replied that that the newspaper had brought it to the public domain and that had an adverse impact. He was alluding to the Sunday Times (political commentary) which reported that a West Asian court was sitting last Sunday to examine a request by the Government of Sri Lanka to freeze the account of a young politician, son of a former VVIP. “This inquiry was carried out secretly. We have checked how it (the Government request to the Dubai courts last Sunday) leaked. It has not gone from us. It has gone from the American side,” he said. Ranawaka argued that a public statement be made on the issue, a position endorsed by Premier Wickremesinghe. However, Minister Samaraweera turned down the request to do so.

Ravi Karunanayake, who drove straight from the Colombo airport to the Presidential Secretariat for the ministerial meeting, joined in. He had returned from a World Bank event in Lima, Peru. He revealed seven persons linked to the previous Government held bank accounts in Dubai. He did not name them. Besides the young politician, there was his brother. Among others were the head of a Government owned commercial undertaking. He is alleged to have been involved in a number of controversial procurement tenders over cooking gas. He is alleged to have US$ 8.7 million in the account. Another is a top ranking official in the former President’s office. He allegedly has a balance of US$ 168 million. Yet another is a one-time close confidant of the former President. He allegedly has a balance of US$ 518 million. The last mentioned, a source familiar with the issue said, has also been allegedly responsible for carrying cash for deposit. He had allegedly used diplomatic immunity for the purpose.

Dubai has acquired an international reputation as a banking centre and a highly stable state for investments. Several politicians, government officials and businessmen in the South Asian and even South East Asian region are known to have “invested” their money in the emirate. Here is a brief account about the banking secrecy reputation investors have acquired from a company that offers help to set up offshore accounts: “Dubai is ranked at 16th position on the 2014 Financial Secrecy Index, which places it towards the top end of the secrecy scale. Dubai accounts for a large portion of the global market for offshore financial services, making it a medium sized player amongst secrecy jurisdictions, with a very high potential for further growth. About two thirds of the UAE’s income was non-oil related by the 1990′s and around the same time Dubai grew to become the largest free-trade zone in the world, from Europe to Singapore. It is estimated that in 2014 Dubai held over $700 billion in assets and deposits because of tight secrecy.

“Dubai does not disclose or prevent trusts and private foundations, does not maintain company ownership details on public record, nor require that company ownership details or financial information are publicly available online.” The promoter of offshore banking in Dubai adds: “Various departments of the Central Bank of the United Arab Emirates and the Dubai Financial Services Authority are responsible for regulatory oversight of the banking industry in the UAE. The scope of these regulatory mandates include domestic banks, foreign banks located in the UAE as well as finance house and other financial institutions, including financial advisory practices. They also supervise Treasury Operations, Accounts and Management Information, Capital Markets, Money Markets and Foreign Exchange, Certificates of Deposit, and Back Office Settlements.”

Given this background, the Government’s strategy or action plan on this exercise to freeze the accounts appears somewhat naïve. It is not that the Government must not try but how best it advised itself in the course of action to be taken calls for questioning. That such funds form the bulwark of the emirate’s economy and required a studied approach is simply fundamental and common knowledge. Here, no inputs were possible by other state agencies or ministers since they were all blissfully unaware of the “secret” operation. It was largely left to Weliamuna and the Dubai-based firm.

Courtesy:Sunday Times