Chaminda De Silva – one of the founder Directors and Deputy Chairman of Continental Insurance Lanka Ltd. has been remanded until Dec. 22.
De Silva, who was arrested by officials of the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) on 9th Dec., was ordered to be remanded after being produced before Chief Magistrate Asanga S. Bodaragama.
The matter that is being investigated is said to be the facilitation of payments totalling over Rs 6 million to an official of the Government Analysts department. It is alleged that by the corrupt activities of a few persons, Continental Insurance received an unfair advantage in terms of settlements of claims made within the Motor insurance division of Continental Insurance.
We contacted a source within Continental Insurance to ask for details of the advertisement placed by the company in some sections of the press. We asked specifically what the investigation was about as the advertisement makes no reference to the subject. The source confirmed that the enquiry centred around transport arrangements made over a period since the year 2010 and that the amount referred to be the aggregate total over several years. Mr Gerry Gunadasa had been granted bail whilst Mr De Silva was denied bail, and the next hearing was set for 22nd December.
Chaminda De Silva was one of the co-founders of the company along with the late Harry Jayawardena. At the time Continental was set up, the Supreme Court had earlier ruled that the ownership of Sri Lanka Insurance be returned to the Secretary, Treasury.
Separately companies connected to Harry Jayawardena were found to have been shareholders of Sri Lanka Insurance and the government decided to refund the monies paid by Jayawardena and associated companies. During the bidding process for Sri Lanka Insurance, Mr Jayawardena provided affidavits claiming not to be related to a Gibraltar based investor, acting via Hambros Bank in Gibraltar.
In later Court proceedings initiated by erstwhile partners of Harry Jayawardena, Raaj Obeyesekere and Zaki Aliff, Jayawardena it transpired had provided questionable instructions to the Hambros Bank asking them to transfer certain assets on their instructions in the names of Harry Jayawardena and one other person. This would have caused financial damage to the other three shareholders, Raaj Obeyesekere, Zaki Aliff and the beneficiary of Mr Vittachi’s estate.
In the event the Supreme Court of Gibraltar ruled that the Hambros bank must take its instructions not from Jayawardena rather from the majority decision of the board of Milford Exports Ceylon Limited a company which was then substantially owned by Jayawardena, Obeyesekere, Aliff and Vitachchi. It was shown in court that a letter from the company secretary allegedly authorising the transfer of assets to Jayawardena and one other, was not issued by the Company Secretaries. Mr Jayawardena withdrew his instructions to Hambros Bank, and the status quo was re-established. Later Jayawardena appointed various others to the Board, removed Aliff and Obeyesekere from the Board, terminated their employment and we understand to date has not paid the declared dividends. Dr Vitachchi’s daughter transferred her shares to those associated with Jayawardena.
Many insiders claimed that Continental was setup rather easily as the Database of potential customers had been compromised from Sri Lanka Insurance. We were unable to verify the veracity or the accuracy of this claim.
In terms of Aliff & Obeyesekere, a lengthy legal battle was launched in the Commercial High Court to restore balance and equity to their minority shareholding. It appears that the matter is now laid- by for the moment.
The remanding of Chaminda De Silva – the refusal of bail – has come at a time when his partner is suffering from a serious illness and is in Australia. We understand that De Silva had been planning on being with his wife this weekend in Australia. Gerry Gunadasa has been granted bail.
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