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| Sunday, 1 February 2004 |
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President Chandrika Bandaranaike Kumaratunga has severely warned the Chairman of People's Bank Lal Nanayakkara that she would take him and the Board of Directors to task if the bank entered into any unjustifiable settlement over the colossal sum of Rs.4.8 billion loan given by the bank to Yasodha Group. Reprimanding the head of the bank over the course of action envisaged by the bank to refer the dispute between the Bank and Yasodha Group over the amounts outstanding to a third party, Dr. Wickrema Weerasooriya, on a proposal by Mr. R. Paskaralingam, Advisor to the Prime Minister, the President has pointed out that matters which are subjudice should not be referred to a third party for review or arbitration without the specific consent of the Courts. "You and the Board of Directors of People's Bank will have to account for this decision, which clearly lacks transparency and constitutes a departure from accepted practices of 'good governance'", the letter to the Chairman of the Bank, stated. The letter released by the Presidential Secretariat on January 29, 2004, said: "I also learn that your Board is considering reaching a settlement on the basis of the recommendations by this third party investigator. As the Head of State, I severely warn you to desist from any unjustifiable settlement and, any steps taken by the bank, which lacks transparency, will be subject to a special inquiry and dealt with severely. It is in your best interest to strictly adhere to the legal process through the Court of Law," the letter said. "It is extremely unfair for a State bank to extend privileges to an individual, however politically powerful he may be, which are denied to others, less influential. I consider such patronage to be a travesty of justice. I categorically state that the privileges not extended to others should never be extended to Yasodha Group and, any violation of this practice, will be investigated", the letter added. Observing that the bank was able to recover a large sums of outstanding loans by referring to Courts of law, she warns the bank not to revert in respect of other loans. "I am aware that your bank has resorted to legal action, for the recovery of large amounts outstanding in respect of advances and facilities granted to Yasodha Group and that already judgements have been awarded in favour of the People's Bank in a number of cases. Therefore, it stands to reason to expect the bank to continue with the rest of the cases, so that there is a reasonable chance of recovering outstanding loans, the letter added. |
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