Gajalakshmi Paramasivam – 18 April   2016

Panama Papers & Colombo Port City

[The Central Bank of Sri Lanka (CBSL) is poised to obtain country specific information to identify any tax evasions by Sri Lankan companies and individuals as well as stashing away their wealth in tax havens, away from the prying eyes of the authorities.

Central Bank Governor Arjuna Mahendran said, just like other countries inquiring into links made in Panama Papaers to their own nationals, Sri Lanka too is keen to investigate the matter of Sri Lankan engagement in tax evasions and offshore companies.

“It is too premature to say anything right now. But the information placed in public domain needs to be verified, fast,” he said.

“We have got some of those papers and we are requesting further information from our counterparts,” he said, at a press briefing in Colombo last Tuesday (12).

The names of Sri Lankans in the papers are not yet clearly established. “We don’t want to jump to any conclusions as clear information is not yet available.” He insisted: “The authenticity of the documents will have to be established first.”

When asked whether around US$ 1.9 billion dollars flowed out of the country annually via illicit channels, the CB Governor said he found such figures hard to believe.

In this backdrop, it is learnt that Sri Lankan law enforcement agencies are now preparing for a data gathering exercise, before making global inquiries to unearth detailed data on Sri Lankan secret account-holders listed in the ‘Panama Papers’ journalistic exposure.]

The Lankan connection - by Dilrukshi Handunnetti – of the Sunday Observer.

Should the Central Bank use the work of social and unofficial media before giving priority to similar activities exposed through official channels? If this is ok – then to what extent did the Sri Lankan Government officially recognize Wikileaks information? One of the fundamentals I learnt in Financial Laws is that a negotiable instrument does not afford a better title to a holder in due course who is aware of a defect in the title of issuing party. To my mind, this is also valid in terms of information/data. It is however becoming more and more difficult for authorities to verify the ‘good faith’ factor due to electronic systems replacing paper systems. Yet, one must try one’s best to know for one’s own balance of mind.

The Policy list of the Sri Lankan Central Bank includes the following:

Monetary Policy

One of the core objectives of the Central Bank of Sri Lanka is economic and price stability. The Central Bank formulates and implements its monetary policy, i.e. actions to influence cost and availability of money, to attain this objective.

Given that China is a stakeholder in Colombo Port-City Project and the Advisor to the Authority responsible for this Project has already resigned over alleged  links to Panama offshore activities – should the Central Bank investigate also the investment by China to ensure that the Port-City Project capital is clean of such sins? Wikipedia report highlights the following about China, in relation to Panama Papers:

Relatives of highly placed Chinese officials including seven senior leaders and former senior leaders of  Politburo of the Communist Party of China have been named, including former Premier Li Peng's daughter Li Xiaolin, former Communist Party general secretary Hu Yaobang's son Hu Dehua and Deng Jiagui, the brother-in-law of current general secretary Xi Jinping. Deng had two shell companies in the British Virgin Islands while Xi was a member of the Politburo Standing Committee, but they were dormant by the time Xi became General Secretary of Communist Party (paramount leader) in 2012. Others named include the son and daughter-in-law of propaganda chief Liu Yunshan and the son-in-law of Vice-Premier Zhang Gaoli.  China's government is suppressing mentions of the Panama Papers on social media and in search engines results. China's Communist Party reportedly has told news organizations to delete all content related to the Panama Papers leak.

Considering the material to be a concerted foreign media attack on China, internet information offices were immediately given verbal orders to delete reprinted reports on the Panama Papers, and not to follow up on related content without exceptions. Hong Lei, the spokesman of China's foreign ministry, responded that he had "no comment" for "such groundless accusations" at an April 5 news conference.

Chinese authorities have blocked almost all information about the Panama Papers on Chinese media and the Internet. A screenshot showed that the authority had forced all websites to delete content about the Panama Papers.  Foreign websites such as Wikileak, China Digital Times have been blocked in mainland China. On Sina Weibo, a twitter-like social media in China, almost all content about the Panama Papers was deleted. Because Xi's brother-in-law had been named, and the Panama Canal is well known, Weibo users started to use "brother-in-law", "Canal Papers", and other such tags to avoid Weibo's censor. Despite the censorship, Weibo search ranking was topped by phrases "seemingly related" to the Panama Papers since its global press coverage such as "tax evasion", "document", "leak" and "Putin".]

Shades of the above practices were followed by the previous Government in Sri Lanka – confirming the infection that came with funding of projects such as Colombo Port-City project. If the current Government is seeking to be Transparent and Accountable – should the Central Bank not ensure that the money that comes into Sri Lanka is ‘free’ of  any diseases that would damage our positive investment in Transparency and Accountability and that this is given priority over monies that have already gone out of Sri Lanka bearing the disease of Evading Accountability and carrying the highly debilitating Secrecy bug?

A manifestation involves two sides – cost and benefit. I brought this out during my painful meeting with the then Head of Research – University of NSW. Following is an excerpt from Appendix 3 of  Naan Australian published by Lakehouse Bookshop in Sri Lanka :

[I asked the question:

Gaja: Are the Research Quantum / RIBG (Research Infrastructure Building Grants) calculations based on Income or Expenditure?

Mr. Cook: (pointing to the papers in front) You said you had read this – then you ought to know. ( By this time I was convinced that Peter Cook had something against women and/or Asians. His language gave him away. One who focused through issues would not demonstrate consciousness of  individual persons. Given that I did not know Peter Cook personally, I had to attribute the group characteristic on the basis of Anti Discrimination / Equal Opportunity laws) It is all in the web – about 20 pages. I have held the view that the reporting ought to be based on Income and not Expenditure – I have had many discussions with John Wong about this. We are the only University that does it on Expenditure basis rather than on Income. ]

The above book also was published through an ‘offshore’ process – largely for economic reasons. But Accountability and Transparency have been maintained from the very beginning. A majoritarian government  - as the University of NSW Administration was back in 1998  - would suit an Expenditure based reporting. Inclusive Consensual Governance that this current Government of Sri Lanka  is claiming to work towards  needs to be more Income oriented – so we do not need to verify the legality of the source of our income. In a global context therefore – once that source is suspected / known to be corrupt we must suspend any inflow of money from such a source – until the picture has been cleared of any wrong doing at global level. Any damages to Transparency and Accountability – need to be given great importance by the current government of Sri Lanka, if Sri Lanka is to have closure of war-crimes and Terrorism issues.    

Democracy is largely effects based once a matter comes to the Public stage. Each one of us would link such outcomes to our own experiences and thoughts. In terms of identity - the LTTE did what Wikileaks did. They were both punished. The Panama Papers person has chosen to remain anonymous and this is likely to protect her/him. The question is – if the LTTE had also done what they did anonymously – would they have saved themselves? To come out publicly – in support of Dharma / Righteousness – one needs to feel ownership in the institution and/or the issue. One must also make oneself blind to all returns other than having the experience. Towards this, all benefits as per OUR calculations – need to be raised to the highest level – Energy/Shakthi level. This then brings us the support of the Absolute power of Truth Itself. Even one such Sri Lankan would cure and protect Sri Lanka – not from war but from cheating itself.