Lakshman Hulugalle’s appointment to the Commercial Bank
Lakshman Hulugalle, a convicted criminal, was appointed as a director of the Commercial Bank of Sri Lanka. In spite of the Banking Act, specifically prohibiting the appointment of convicted criminals to the boards of commercial banks, the then monetary board, headed by Cabraal, sanctioned his appointment.
Here are some of the EPF’s investments in the stock exchange during Cabraal’s tenure:
The Finance Company (TFC)
Everybody is aware as to what happened to former NSB chairman, Pradeep Kariyawasam, when NSB bought the shares of TFC in 2012. There was a huge public opposition and Kariyawasam had to resign from his post. However, Cabraal was not unlucky as Kariyawasam, and he continued to remain in his post. If it was wrong for the NSB to buy shares of the TFC, how was it correct for the EPF to do the same?
The Galadari Hotel
The EPF purchased a substantial stake in Galadari Hotel in 2010 from Jayantha Dharmadasa’s Nawaloka Hospital. Galadari even then was a heavily debt-ridden hotel and had not paid any dividends for years. Why did the EPF buy shares of this hotel in such a backdrop? It is a common practice for pension funds such as EPF to not to invest in stocks that do not pay dividends. The EPF has not earned anything out of this investment for 9 years now. When Dharmadasa disposed this stake to the EPF, he realised a huge capital gain, and he is certainly one blessed individual.
The Sri Lankan Airlines (SLA)
Not much needs to be said about the financial health of the national carrier. What happened to the national carrier under the previous government was brilliantly revealed by the Weliamuna committee. However, EPF had no hesitation in investing in SLA in spite of the aviation industry being known as a highly capital intensive risky industry. The Public Accounts Committee of the parliament had observed that EPF had not earned a cent out of its investment of Rs 500 million in SLA in 2010.