It is not news when some company takes a state institution to court. It happens often enough. In this world very few people if at all do not absolve themselves of guilt before or when they commit an act which others or the law might consider wrong or illegal. That’s why there is litigation. That’s why there are plaints and plaintiffs, defence and defendants.
Each suit however has a story. Some are juicy and some are boring. Some reveal structural flaws and some reveal unwholesome cultures of being and doing. It’s the last kind that one sees in an otherwise ordinary and even common plaint filed in the District Court of Colombo.
Crown City Developers (Pvt) Ltd, a subsidiary of the Abans Group of Companies and is engaged in warehousing business and has a logistics centre at Kadonkelewatte, Seeduwa has petitioned court against the Board of Investments (BOI). The plaint refers to attempt by the BOI to terminate agreements which in manner and intent are ‘malicious, capricious, unlawful, illegal and against the terms and conditions of the said agreement’. That’s legal jargon of course and of the kind that get copy-pasted from one plaint to the next.
But what really happened? Crown City has not had any issues with the BOI and vice versa in 15 years. Even as recent as November 2014, the two parties communicated to apply for and obtain approval for the construction of a warehouse building and logistic center.
Then, at the end of March 2015, less than three months after the country elected a new President who appointed a new Cabinet, the BOI writes to Crown City seeking termination of agreements. Two weeks later the BOI further informs Crown City to cease construction on the property. Interestingly, prior to the first communication of this kind, i.e. on March 11, 2015, the BOI informs Crown City to hand over an unutilized 14 acres of land. Land, then, appears to have been the issue. Even more interesting is the fact that the BOI has not specified the reasons for seeking termination apart from the vague and indeterminate ‘[failure] to fulfil the terms and conditions of the said Agreements’. Highly suspicious and certainly irregular.
Since the BOI has not specified reason it would be harsh and unfair to indulge in conjecture. We can however state some facts.
Interest in the plot of land in question has been expressed by a person ‘having business connections with business entities in direct competition with the plaintiff and/or occupying premises adjacent to the plaintiff and/or who would greatly benefit from use and/or occupation of the said property’ (from the plaint). The plaint indicates that this person holds powerful office.
Interestingly, again, Crown City has of late (i.e. since the new Government took office) been subject to what might be construed as undue harassment by the Customs and the Inland Revenue Department.
Now it could be that Crown City has been up to no good and that the previous Government looked the other way. Theoretically then there’s nothing wrong in these state agencies (empowered by ‘good governance’ pledges perhaps) taking interest in their operations.
On the other hand, what we have are three state agencies (BOI, Customs and Inland Revenue) and an interested party who is a politician. The plaint alludes to evidence of this politician’s interest in the property.
The politician has a name. Ravi Karunanayake. He is the Minister of Finance. He has direct or indirect say in the BOI, Customs and Inland Revenue. These are dots. They can be joined. Conclusions can be drawn.
Now we cannot predict how the court will rule. There is litigation, there is determination. There are out-of-court settlements and there is the withdrawal of cases. Anything could happen. Who can tell, perhaps Crown City might ‘settle’. If the settlement benefits any entity that Karunanayake is associated with then there’s something seriously wrong that has happened. Even if there is a settlement, having claimed breach of contract the BOI cannot back off without appearing to have represented the interest of the minister and nothing else.
Has Ravi Karunanayake abused his position? The BOI Chairman is Upul Jayasuriya a known UNPer, ardent critic of the previous government and one of the immediate beneficiaries of the power-change in January. The two are either friends or political associates. Has Jayasuriya abused his position? Is there mutual back-scratching happening here? We do not know. We hope not, in fact. However, as things unfold, we will know. One way or the other.