• Conflict of interest allegations surround JCT Board position amidst JICA fund controversy

Controversy surrounds Bar Association of Sri Lanka (BASL) President Kaushalya Nawaratne, PC, as multiple Bar Council members and former BASL presidents have expressed concerns over his role as a Board Director of Jaya Container Terminals Ltd. (JCT), a subsidiary fully owned by the Sri Lanka Ports Authority (SLPA).

Concerns about him holding office as a JCT Board Member arise in the backdrop of an ongoing investigation within the BASL. 

This investigation is examining alleged procedural violations in the BASL’s appointment of Nawaratne as the team lead, along with the selection of four other attorneys, to participate in an anti-corruption study. 

The Japan International Cooperation Agency (JICA) has awarded a total of Rs. 21 million to the participants for the study.

The issue concerning JICA funds was discussed at the most recent Bar Council meeting held on 18 May. A five-member committee, composed entirely of President’s Counsels (PCs), was established to conduct an investigation. 

The committee, comprising PCs Dr. K. Kanag-Isvaran, Dr. Faisz Musthapha, Rienzie Arsecularatne, Ikram Mohamed, and Geoffrey Alagaratnam, has been asked to submit its report to the Bar Council within two months.

Nevertheless, according to the JCT website, Nawaratne is one of the seven directors on the Board, which also includes a Chairman and Managing Director. His wife, Shehara Y. Nawaratne, serves as the Legal Consultant and Secretary to the Board.

As per JCT, Board members are appointed in the following manner: the chairman, managing director, and six other directors are appointed by the minister in charge of the SLPA, while a representative of the Treasury is nominated by the minister of finance.

JCT was incorporated on 21 February 2002 under the Companies Act No.17 of 1982 and re-registered under the Companies Act No.7 of 2007 as a public company.

Speaking to The Sunday Morning, former President of the BASL U.R. De Silva, PC emphasised that if incumbent President Nawaratne had obtained approval from the BASL Executive Committee to continue as a Board Director of JCT, there would be no issue.

“But if he has continued in the position on his own, then there is a conflict of interest as it affects the independence of the BASL,” he stressed.

De Silva further explained the challenges he had faced during his tenure as BASL President, particularly when making personal statements to the media about the country’s situation, whereupon he said that he had expressed regret and discontinued such actions while holding office.

“There is a duty as the president of the BASL,” he stressed, adding that the president was answerable to the BASL Executive Committee.

Another former President of the BASL Upul Jayasuriya, PC has raised concerns about the conduct of the incumbent BASL President regarding the alleged JICA issue.

Meanwhile, a senior lawyer, who is a member of the Bar Council and who wished to remain anonymous, told The Sunday Morning that Nawaratne’s conduct as the BASL President had raised questions, particularly regarding his position as a Board Director at JCT, which presented a clear conflict of interest.

The Bar Council member highlighted an ongoing investigation concerning the procedure followed by the BASL President in selecting participants for the JICA-funded anti-corruption study.

“There is a view among some that he should step aside at least until the inquiry is completed. In fact, that request was made by one lawyer at the Bar Council. But that is up to his conscience. The BASL conducts workshops on ethics for lawyers, so I don’t know how he conducts those,” the council member said.

Commenting on Nawaratne holding a position at JCT, the council member stressed that there was a conflict of interest.

“As far as I know, it is a political appointment obtained from the Minister. When you receive such an appointment, you become indebted to the political authority. If you look at the website, the website uses ‘President of the BASL’ as his description. 

“In my opinion, the President of the BASL should not accept any other appointments, especially from a political authority. Some of the other office bearers could; we have had such office bearers. But ideally, the President should not hold such positions, especially when you are beholden to a minister,” the council member explained.

When asked whether it constituted a violation of professional ethics, the member said: “I don’t think it’s a violation of the professional code of conduct of a lawyer, but it compromises his independence.”

As reported, out of the Rs. 21 million received by the BASL, Rs. 19 million had been divided among the five members who conducted the study. The Bar Council has instructed all five to return the money to the BASL, with two members having already returned their share prior to the council’s involvement.

The Sunday Morning learns that BASL Deputy President Nalinda Indatissa, PC, one of the members selected by Nawaratne to participate in the study, had been unaware of the fund’s involvement. When notified on 18 May, he had expressed his reluctance to touch the funds. 

The Bar Council had intervened following demands for an explanation from several senior members of the BASL Executive Committee regarding the JICA project. JICA had engaged the team, consisting of BASL members, late last year to conduct a study on bribery and corruption.

However, when The Sunday Morning sought clarification from Nawaratne, he stated: “No one has raised any concerns whatsoever. These days, many things are being said in the media and on many other platforms. There was no such issue raised at any point in time. 

“There is no conflict. JCT is a company. Even my former Secretary Isuru Balapatabendi serves as a Director of People’s Bank while holding office and he was the Chairman of People’s Insurance PLC, a Government entity. Former President Upul Jayasuriya became the Chairman of the Board of Investment (BOI) while serving as the President of the BASL. JCT is a small company and I’m just another Director.

“I can’t elaborate on anything, since at the moment I have been asked not to make any statements,” he added.