President’s Chief of Staff I.H.K. Mahanama was caught receiving LKR 20 million (US $1,26,823) from the businessman

Following a tip-off from an Indian investor, Sri Lanka’s anti-graft body on Thursday arrested President Maithripala Sirisena’s top aide, who was found accepting a bribe at the car park of a luxury hotel in the capital.

Officials of the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) arrested Mr. Sirisena’s Chief of Staff I.H.K. Mahanama, when he received LKR 20 million ($1,26,823) from an Indian national, according to CIABOC commissioner C. Neville Guruge.

The Indian businessman, whose details authorities declined to divulge, is an investor in a state-owned sugar factory located in the eastern district of Trincomalee. “He [Indian investor] contacted us and told us about the bribe that Mr. Mahanama, who was earlier Secretary at the Lands Ministry, had sought,” Mr. Guruge told The Hindu on Friday.

Mr. Mahanama had initially demanded a bribe of LKR 540 million (about $3.5 million) from the investor, but following negotiations, brought it down to LKR 100 million. On Thursday, “he was accepting the first instalment of LKR 20 million” at the car park of the sea-facing Taj Samudra hotel in Colombo, anti-graft officials said. The chairman of the State Timber Corporation Piyadasa Dissanayake was also arrested in this connection.

Fight against graft

Following the incident, President Sirisena ordered the immediate suspension of the two officials. “The government will continue to punish those engaged in bribery and corruption,” his office said in a statement.

The Kantale sugar factory in Trincomalee had been defunct for nearly 25 years. The government in 2015 decided to revive the factory, by pumping in foreign investment to the tune of $110 million.

Sri Lanka’s Board of Investment (BoI) signed an agreement with a MG Sugars Lanka Pvt. Ltd, a partnership involving the Bangalore-based Shri Prabhulingeshwar Sugars Chemicals Ltd and Singapore’s SLI Development Pte Ltd. The 30-year project was to be run on a build-operate-transfer basis, with 51% of the shares held by the government of Sri Lanka and 49% by the foreign investor. The agreement is still valid, BoI officials told The Hindu.

However, the initiative has been mired in controversy since 2015, reportedly due to the delay in the release of land and machinery to the investor to commence revival efforts.

Thursday’s arrest delivers another blow to Sri Lanka’s national unity government, already tainted by allegations of nepotism and corruption, following a multi-million dollar scam from a bond auction at the Central Bank in 2015.