not reaping what it sowed
The news article published on 13-06-2006 in your newspaper under
the above heading is totally false and misleading.
this news will mislead the members of the Employees Trust
Fund Board where I am the Chairman/CEO and the public, I have decided
to forward all the details of this transaction to you.
though Ms. Vinitha M.Gamage has met only Mr. Sagara Hewagama on
12-06-2006 who is on the 8th floor of Labour Secretariat Building,
she should have also met me on the 1st floor of the same building
too. So that I could have explained the correct position to her.
17(1) of the Housing Development Finance Corporation of Sri Lanka
Act No.07 of 1997 stipulates that the Employees Trust Fund
Board shall contribute Rs. 50 Million to the capital of HDFC.
General Manager of HDFC by his letters dated 05-09-2000 and 29-09-2000
requested ETFB to forward Rs. 50 Million to HDFC
G Jinadasa the then Chairman of ETFB by his letter dated 16-10-2000
has written to the Ministry of Finance and Planning consulting them
whether ETFB is bound to make this investment. Prof. Wisva Warnapala
successor to Mr. Jinadasa too has written to Ministry of Finance
and Planning on the same matter by his letter dated 10-07-2001.
Treasury by their letter dated 12-09-2001 has informed that the
investment of Rs. 50 Million in HDFC is a statutory requirement
and the Treasury has no objection for ETFB acting on its own in
this regard. Accordingly, Board of Directors of ETFB at its meeting
held on 06-11-2001 has decided to invest Rs. 50 Million in HDFC
as this is a statutory requirement.
has forwarded the share certificate dated 07-06-2002 in respect
of 500.000 shares of Rs. 100/- each to ETFB.
Development Finance Corporation of Sri Lanka was converted to Housing
Development Finance Corporation Bank of Sri Lanka by the Housing
Development Finance Corporation of Sri Lanka (amendment) Act No.
15 of 2003.
the period of Mr. Dinesh Weerakkodys Chairmanship, the share
certificate was lodged in the CDS account by letter dated 20-11-2003
in order to sell shares at a profit at the share market.
Manager of HDFC Bank by his letter dated 24-11-2003 has written
to Colombo Stock Exchange and informed that the shares held by ETFB
are repayable by them after the sale of shares to the public as
per Section 17 (4) of HDFC Act. Thereafter the Central Depository
Systems (Pvt.) Ltd. has withdrawn these shares from the CDS account
and returned to us.
Manager of HDFC Bank by their letter under the heading of Repayment
of Capital contribution dated 16-11-2005 has forwarded a cheque
for Rs. 50 Million to ETFB.
amount was invested in a short term Treasury Bill Repo deposit as
a separate suspense account.
have assumed duties as Chairman/CEO of this Board on 12-12-2005.
I paid attention to this matter, obtained legal opinion and wrote
a letter on 2 1-12-2005 informing HDFC that we have a right to sell
these shares at the Share Market. There were subsequent correspondence
on this matter between ETFB and HDFC Bank.
Board of Directors has authorized me to take legal action against
HDFC if we cannot sort out this matter by discussion.
of Audit of Auditor Generals Department has queried by his
letter dated 08-03-2006 from me regarding the acceptance of Rs.
50 Million from HDFC without obtaining a profit of Rs. 129 Million
by selling these shares at the Share Market.
am surprised to note that Audit Superintendent has never queried
regarding non sale of HDFC shares prior to this query, although
ETFB has received these share certificate in June 2002. I have replied
promptly to Auditor General on 16-03-2006 attaching all documents
relevant to this matter.
publishing an article on the basis of information given by Mr. Sagara
Hewagama who apparently obtained parts of information from an audit
query might lead to destroy the image of this organization. Therefore
you are requested to publish my report early, giving due prominence
in your newspaper.