SL’s external debt restructuring bid suffers blow

A United States District Court has denied Sri Lanka Government’s motion to dismiss the case filed by Hamilton Reserve Bank on behalf of certain holders of International Sovereign Bonds (ISBs), a move which analysts viewed as a setback to the country’s critical external debt restructuring.

Among other things Sri Lanka argued that the Cede Authorisation is defective on its face. “It is not,” the judgement issued by US District Judge Denise L, Cote on 24 March ruled. It added that the “language of the authorisation closely tracks Cede authorisations regularly accepted…As such, Sri Lanka’s arguments fail.”

Hamilton Reserve Bank is the beneficial holder of bonds issued by Sri Lankan Government which according to the judgement, is currently experiencing an economic and humanitarian crisis –defaulted on the bonds and Hamilton brought this breach of contract action to recover the principal and accrued interest owed.

Sri Lanka moved to dismiss on the grounds that plaintiff lacks contractual standing.

Hamilton owns over $ 250 million in principal amount of the ISBs. Sri Lanka in mid-April announced a moratorium on foreign debt repayments including the Bonds and since then has made no payments on the Bonds.

The Bonds matured on 25 July 2022. Hamilton alleged that as a result of Sri Lanka’s default, it is owed $ 250.19 million in principle and $ 7.349 million in accrued interest (before accounting for pre- and post-judgement interest).

Hamilton initiated this action on 21 June 2022 after which on 21 September Sri Lanka filed a motion to dismiss the complaint.

Cede and Company (Cede), nomine of the Depository Trust Company (DTC) is the registered holder of the Bonds. Hamilton conceded that it is a beneficial owner rather than the registered holder of the Bonds.

In a letter dated 23 September 2022, Cede authorised the plaintiff “to take any and all actions and exercise any and all rights and remedies that Cede & Co as the holder of record” is “entitled to take” (the Cede Authorisation”).

On 22 September the Court gave Hamilton an opportunity to amend the complaint and warned that another opportunity to amend was unlikely. On 23 September Hamilton received the Cede Authorisation. Plaintiff filed its amended complaint on 13 October, alleging one count of breach of contract based on non-0payment of the Bonds at maturity. Sri Lanka then renewed its motion to dismiss on 4 October. The motion became fully submitted on 16 December.

The Judge said a claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. In determining if a claim is sufficiently plausible to withstand dismissal, a court accepts all factual allegations as true and draws all reasonable inferences in favour of the plaintiffs. Additionally, a court may consider extrinsic material that the complaint incorporates by reference that is integral to the complaint or of which courts can take judicial notice.

The judgement said the crux of this dispute is whether the Cede Authorisation confers upon Hamilton standing to sue given the absence of a contractual provision expressly allowing such authorisation and the presence of the negating clauses. Neither the Second Circuit nor the New York Court of Appeals has directly addressed this issue. Nonetheless, the Circuit’s decision in Applestein Vs Province of Buenos Aires, and its progeny establish Hamilton’s standing to sue.

As per Finance Ministry sources, Sri Lanka’s ISBs account for a significant 66% share or $ 20.3 billion of commercial FX denominated public debt, excluding ECA-backed debt and SOEs’ payables and including arrears, as at end-2022. Outstanding amount to bonded private creditors was $ 14.5 billion.

ISBs holders have organised around two committees. ISBs international bondholders have formed an ad-hoc creditor committee and this group is said to represent more than 55% of ISBs non-domestic holdings. The group is advised by Rothschild and White and Case.

Separately a consortium of local private banks holding ISBs has formed another group which has reported holdings in around $ 1.5 billion across all series of ISBs (around 12% of outstanding ISBs). The group is advised by Baker and Mckenzie.

As per Government’s plans on external debt restructuring, next steps with private creditors included engaging on a technical basis with bondholder committees’ advisors and other private creditors to ensure further sharing of information and data, under NDAs; establish the required restructuring discussion channels with all private creditors and their advisors; reach agreements with private creditors and their advisors that are (i) compliant with the IMF DSA targets and (ii) comparable across different creditor categories and ensure the legal implementation of the agreements reached with all parties.

EU donates 3,820 tonnes of urea fertilizer to SL paddy farmers

The European Union (EU) handed over a shipment of 3,820 tonnes of urea fertilizer procured by the Food and Agriculture Organization of the United Nations (FAO) to the Ministry of Agriculture today.

The stock of fertilizer is to be distributed among smallholder paddy farmers and paddy seed farmers in Sri Lanka.

This new shipment of urea fertilizer will be dispatched to over 72,200 smallholder paddy farmers who were severely impacted by the recent economic crisis in Polonnaruwa, Badulla, Ampara, Matale, Puttalam, Kurunegala and Hambantota districts.

It is integral to a 4 million Euro (approximately 1.5 billion rupees) programme launched by FAO and the EU to address the agriculture and food security crisis in Sri Lanka while supporting the introduction of integrated plant nutrient management strategy amongst identified paddy growers.

Speaking on the support, the EU has extended to revitalize Sri Lanka’s paddy cultivation sector, European Union Ambassador, Denis Chaibi said: “The distribution of urea fertilizers for vulnerable farmers is one of many actions we undertook to respond to the socio-economic crisis affecting millions of people in Sri Lanka. We hope that with this new support we can prevent immediate food shortages but also contribute towards a transition to a more sustainable and resilient agriculture sector in the future”.

Through this programme, every eligible farmer cultivating up to 0.5 hectares of land in the targeted districts will receive 50kg of urea fertilizer for the upcoming cultivating season. Additionally, the programme will also provide high-quality paddy seeds and the necessary technology/capacity building to boost the efficient use of fertilizer.

Crop failures during recent harvesting seasons due to shortages of fertilizer and vital inputs, have posed many challenges for smallholder paddy farmers to sustain their livelihoods. This programme seeks to encourage smallholder farmers through material and technical inputs to adopt scientific farming practices to enhance fertilizer use efficiency and strengthen the seed paddy production system in Sri Lanka to meet the current demand. The programme also aims to strengthen government seed farms by providing them with modern, state-of-the-art seed processing and drying machines.

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Sri Lanka catholic church seeks UN-led probe on Easter attacks

As Sri Lankan Christians mark four years since the Easter Sunday bombings which killed 261 people, the local Church continues to allege a cover-up and seek justice by calling for a UN-led international investigation, according to Fr. Julian Patrick Perera.

“We consider that finding justice and revealing the truth is a national service that we can do to our country, because we are a minority religion in Sri Lanka.”

Fr. Julian Patrick Perera, a secretary to the legal team of the Archdiocese of Colombo, offered that assessment of the local Church’s efforts to find and prosecute the perpetrators of the 2019 Easter Sunday bombings.

On 21 April 2019, terrorist bombers attacked two Catholic churches, an evangelical Christian church, and three luxury hotels, as well as a housing complex and a guest house.

The eight suicide bombers, whom the government alleged were linked to the so-called Islamic State, killed 261 people in the coordinated attacks.

Cardinal Malcolm Ranjith, the Archbishop of Colombo, has questioned the government’s narrative of attacks and has consistently called for an international investigation.

Allegations of a cover up

In an interview with Vatican News to mark the fourth anniversary of the tragedy, Fr. Perera lamented the lack of justice for the Easter Sunday bombings, saying there has been “no proper investigation completed on the whole issue”.

He noted there appears to be evidence of a cover-up, pointing to the removal of several key investigators from the case.

“There is also a kind of an eyewash lawsuit that has been brought against about 25 members of the so-called terrorist movement. But those charges are very surface level,” said Fr. Perera, adding that law experts believe that a case consisting of 23,000 charges can never be credibly brought to trial.

“How can you bring 23,000 charges into question and cross-examine so many hundreds of people?” he wondered. “So, you can see that there is a very clear cover up in the first place.” (VATICAN NEWS)

Sri Lanka must find out truth of 2019 Easter blasts, say survivors and families of victims

Almost four years ago, Rupika Rosairo’s two daughters left the family home in Colombo in their Sunday best to attend Easter mass with their grandmother. But that evening, her 13-year-old younger daughter returned home in a coffin.

Rosairo’s children were victims of Sri Lanka’s Easter bombings that killed more than 260 people and injured some 400, after eight local Islamist militants blew up three churches and hotels in a coordinated terrorist attack.

Evidence later came to light that the government had sat on intelligence it received about the imminent assault for at least two weeks, prompting the relatives of some victims to file fundamental-rights cases at Sri Lanka’s Supreme Court.

In January, the court ruled that former president Maithripala Sirisena and a number of security chiefs were guilty of “deplorable want of oversight and inaction”, and ordered them to pay amounts of between 10 million and 100 million (US$31,000-US$310,000) Sri Lankan rupees each.

Analysts say the ruling and financial reparations – described by the UN Human Rights Office as “a step in the victims’ struggle for recognition of the harm suffered, and their rights to truth, justice and reparation” – pave the road to further action by survivors and families of victims, who have been left to struggle with grief, long-term physical and emotional pain, and the lack of information as to the “true masterminds” who have torn their lives apart.

Sitting in the living room of her home in Katuwapitiya, located just 10 minutes from St Sebastian’s Church where her daughter died, Rosairo said the money from the judgment meant little to her.

“It cannot bring my child back,” she said, her voice quaking with anguish. “I will suffer until I die. And the rulers of this country are responsible for my pain.”

She said it hurt that no leader had held a meeting with the families of victims. “If the rulers truly want to repent, they should first come and talk to the families of the victims, which they have not done.”

Rosairo said the attacks turned her village into one huge funeral procession, as around 100 residents from the area were killed. Her mother, who was 75 at the time, suffered a head injury. Her older daughter continues to have difficulty hearing after the bombings and experiences psychological trauma.

“I want to know who did this to my family, who was behind the attacks, and their motive. I want them to receive a deserving punishment,” Rosairo said.

Survivor Prasanna Fernando, Rosairo’s neighbour, suffered a severe head injury. Once the breadwinner of his family, Prasanna is now in a state of semi-paralysis, leaving him dependent on his wife.

He has a cognitive impairment, struggles to speak, cannot move his right hand and has difficulty walking, according to his wife Marie. .

With Prasanna unable to work, the family lost their chicken-farming business, leaving them reliant on church funding and donations. But private donations declined significantly after Covid-19 hit and the country underwent a financial crisis. .

“My younger son is just finishing school. We had hopes to educate our children in foreign universities; all that is now shattered,” Marie told This Week in Asia. .

“[Prasanna] is being punished every day. He can barely walk to the washroom in time. We want those responsible to be punished.” .

SCMP (Source)

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PM to hold talks with Election Commission tomorrow

A meeting is scheduled to be held between Prime Minister Dinesh Gunawardene and the Election Commission tomorrow morning (April 10), the Prime Minister’s Media Division announced.

The discussion is expected to focus on the 2023 Local Government Elections which has been postponed multiple times.

On March 26, the Election Commission had requested Prime Minister Dinesh Gunawardene in writing for a discussion regarding holding the 2023 Local Government (LG) election.

Chairman of the Election Commission Nimal G. Punchihewa stated that the request was made in order to discuss the issues pertaining to holding the 2023 LG polls.

The election body also mentioned that they hope to draw attention to the payment of salaries to public employees who are contesting as candidates in the LG elections, during the meeting.

Meanwhile, PM Dinesh Gunawardene had also stated in the parliament recently that he had decided to call the commission for a discussion regarding the 2023 LG polls.

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Ranil to contest Presidential election, hints at poll early next year

– Ranil says he will consult all parties concerned and a presidential poll may be held early 2024

– Informs opposition MPs that he presently has the numbers in Parliament

– Will call for Parliament to work as one after IMF agreement presented in House

President Ranil Wickremesinghe will contest the next Presidential Election and has hinted at a possible presidential poll to be held early next year, the Daily Mirror learns.

In a meeting held with minority political party parliamentarians this week, Wickremesinghe informed them that he would contest as a presidential candidate and would call for an election early next year following consultations with the Elections Commission, Treasury and Attorney General.

Wickremesinghe also informed the opposition parliamentarians that the economy was on an upward trend and would improve in the coming months. The President said the country was in a better position when compared to a few months ago and once the economy stabilizes, he would consult all political parties and other parties concerned and call for a presidential poll.

The President further said that he would call on all political parties in parliament to work as one to implement the IMF reforms in order to strengthen the economic revival after he presents the IMF agreement before Parliament in April or May.

To those opposition parliamentarians who want to join the government, Wickremesinghe encouraged these MPs to come with their respective groups or political parties and if the party leadership is not willing to join the government, then the MPs can cross over on their own.

Sources who attended the meeting told Daily Mirror that Wickremesinghe had however informed the parliamentarians that he presently had a comfortable majority in Parliament, and hence he was not in any rush to take MPs from the opposition. He said if these MPs want to cross over they should do so voluntarily and not under political pressure or expecting portfolios in return and those who do not want to cross over, but yet want to support him can do so.

He said such MPs would be allocated tasks and designations to support the government while being in the opposition so that all parties could be united in taking the economy further.

Several opposition parliamentarians including from the Samagi Jana Balawegaya are in discussions with the President and have informed him that they are ready to support him in taking the country forward.

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China plans setting up radar base in Sri Lanka to monitor Indian naval presence – report

China has proposed setting up of a radar base in Sri Lanka, aiming to counter India’s naval presence and strategic oversight in the Indian Ocean region, a report has claimed.

The proposed radar base will focus on monitoring the activities of the Indian Navy while also evaluating New Delhi’s strategic assets in the region, Economic Times reported.

The paper reported that Aerospace Information Research of the Chinese Academy of Sciences is the likely agency which is steering this project in the forests of Dondra Bay, Sri Lanka, about 155 km southeast of Colombo.

The proposed radar will have the capability to track US military movements at its military base in Diego Garcia, an island of the British Indian Ocean Territory, an overseas territory of the United Kingdom, located over 1700 km southwest of Dondra Bay.

The report, while citing people familiar with the developments related to Chinese proposal, said that the radar set-up, if successfully established by Beijing, would be detrimental to Indian military installations as they will be in the range of the proposed radar.

The proposed Chinese oversight installation in Sri Lanka is likely to have the range as far as the Andaman and Nicobar Islands to its east.

Sri Lanka remains vulnerable to Chinese designs in the region because of the Chinese debt owed to the country. Dondra Bay is located at the southernmost tip of Sri Lanka. It forms a significant part of Sri Lanka’s history.

India has been concerned about Chinese activities in Sri Lanka.

Last year, Chinese surveillance vessel Yuan Wang 5 docked at the Hambantota Port after the Sri Lankan government conceded to the Chinese request despite Indian warnings.

Sri Lanka allowed the vessel to dock at Hambantota and remain for six days for refuelling and logistics supplies.

Source – WION / Agencies

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Mano Ganesan moots Tamil Caucus in Sri Lankan Parliament

The Tamil Progressive Alliance (TPA) leader Mano Ganesan has proposed to Tamil party leaders about the need for the establishment of a Tamil MPs Caucus in the Parliament of Sri Lanka. Ganesan has written to ITAK president Mavai Senathirasa, TELO chief Selvam Adaikalanathan MP, DPLF leader D. Sidhdharthan MP and TMK secretary C.V.Wigneswaran MP. Ganesan said that his colleagues in TPA Palani Thigambaram MP and V. Radhakrishnan MP are in favor of such a forum.

Ganesan welcomed the efforts of the government and international development partners in addressing the current economic crisis and subsequent revival of the economy.

But the national question, the root cause should also obtain equal attention. TPA Leader further said that he has three reasons behind this exercise.

One, express the collective desire of the Tamil people to settle down within undivided Sri Lanka sharing wealth and power as co-stakeholders of national sovereignty as Sri Lankans.

Two, commence collective dialogue with all the national political parties and also reach out to the Sinhala community leaders and organizations, beyond politicians.

Three, collectively request the international community and development partners of Sri Lanka to use their good offices with GoSL to insist upon the later to stand by the respective international commitments.

Ganesan also said he doesn’t see the proposed Caucus should engage in discussing political solutions of the Tamil-speaking people. “It is too technical”, Ganesan said. “That should be the responsibilities of respective political parties with the mandate of the respective people”.

He said there are basic variations between the political aspirations of the Tamils of the north and east, the Hill Country Tamils and Muslims. The caucus should only prepare the ground for such talks.

Ganesan said he foresees the Tamil MPs caucus not be a mono-ethnic apparatus. Progressive-minded Sinhala MPs also can be invited to take part as observers and associates of the Caucus.

However, he said all depends on the responses he anticipates from Tamil parties. If there is no such positivity forthcoming, he will not proceed.

US Navy Ship Brunswick docked in Trincomalee

USNS Brunswick, a Spearhead-Class Expeditionary Fast Transport ship of the U.S. Navy arrived at the port of Trincomalee today (08th April 2023).

Currently in service with the United States Navy’s Military Sealift Command, USNS Brunswick is one of three expeditionary fast transport ships in the U.S. 7th Fleet area of responsibility to continue its mission of providing rapid intra-theater transport of troops and military equipment.

The USNS Brunswick is capable of carrying up to 600 short tons of equipment for distances of 1,200 nautical miles at an average speed of 35 knots.

The U.S. Navy ship which arrived in Trincomalee for replenishment, is expected to depart the island on 12th April.

Sri Lanka president’s office accused of assisting forced colonisation

Not one district is safe in the traditional homeland of the Tamils in the North and East of Sri Lanka from the religious and cultural assault from the hardline Buddhist clergy and the ever-menacing Department of Archaeology which is accused of being an agent abetting land grabs.

The scenario is the same starting from the Mannar district in the North West to Mullaitivu in the North East of the country.

And, in yet another incident of land grabbing and forced resettlement, attempts are being made to grab the lands of the Tamils and to settle the Sinhalese in Karunaatukkeni in the Maritimepattu District Secretariat in Mullaitivu district.

That too, the lands belonging to the Tamils just around the Karunaattukkeni Police station were forcefully grabbed and plans are afoot to settle 180 Sinhalese families there.

Locals allege the land grab and Sinhala colonization is being implemented by the Mahaweli Development Authority under the direct guidance of the President’s Director General for Community Affairs Rajith Keerthi Tennakoon.

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The same allegation was made in Parliament by Tamil MP Charles Nirmalanathan on April 4.

As such, officials of the Mahaweli Development Authority, Karaithuraipatru DS officials, and the staff from the Mullaitivu District Secretariat on April 03 visited Karunattukkeni to have a look at the lands belonging to the Tamils that have been earmarked for Sinhala resettlement.

The land-owning Tamils along with a former member of the Northern Provincial Council Thurairasa Ravikaran jointly expressed their strong protest against the forceful occupation of their land.

Tamils who own the land say that during the 1973-79 period, land deeds confirming their ownership were given to them and they were cultivating there.

“We will never allow Sinhala colonization in our ancestral land,” Tamil protestors said.

Fertile agricultural lands in traditional Tamil areas at the border villages of Kokkilai, Kokkuthoduvai, and Krunaattukkeni were forcefully occupied and distributed to the Sinhalese in the Welioya area. Dry Agricultural lands belonging to the Tamils were occupied and distributed to the Sinhalese.

Now efforts are on to establish Sinhala settlements in the residential lands belonging to the Tamil people.

Local Tamils in that area say that such land grabbing activities have caused a deep sense of anguish and disappointment for them.

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