Twists and turns in W.M. Mendis & Company investigation

The investigation conducted by the Criminal Investigation Department (CID) into the controversial Treasury bond saga has now taken a new twist after three employees of W.M. Mendis and Company and their attorney-at-law alleged that the CID and senior officers of the Attorney General’s Department of fabricated witness statements and intimidated witnesses.  

W.M. Mendis is not directly a suspect company in the bond investigation, but the company became engulfed in this investigation due to its ownership interest held by bond suspect Arjun Aloysius, and due to the company’s alleged involvement in several complex financial transactions involving suspect company Perpetual Treasuries. The allegation against W.M. Mendis was that the funds unlawfully earned by Perpetual Treasuries have been transferred to them and was used for unlawful activities such as making payments to leading politicians for favours in return. In July 2018, the CID informed the Colombo Fort Magistrates Court of a statement by a witness alleging that a Rs. 5 million cash payment was made by W.M. Mendis to Brian Sinnaiah, who was a Chief Financial Officer of a company owned by former minister Ravi Karunanayake. 

• According to the affidavit, the ASG had challenged Perera to reveal the identities of the individuals identified
• The lawyers appearing for the three witnesses on September 27 told the Fort Magistrate Court the CID had filed a ‘B’ report with substantial inaccuracies misleading the court
• This alleged conduct by the CID officers can be a charge of serious penal code offences including fabricating evidence to obtain a wrongful conviction
• W.M. Mendis had so far cooperated with the investigators and complied with all court orders served on them where the Hon. Magistrate too had hailed them
• ASG Kodagoda supervises all major CID investigations including the assassination of the the Editor-in-Chief of The Sunday Leader Lasantha Wickrematunge and Keith Noyahr abduction

This transaction and others emerged after the CID took a fine-tooth comb to the finances of Perpetual Treasuries, W.M. Mendis and other associated companies, in an attempt to discern the ultimate destination of the funds the State charges were illegally obtained through the 2015 Treasury bond scandal. 

In order to better understand several financial transactions the CID has deemed suspicious, including the payment purportedly involving Brian Sinnaiah, detectives have sought to inspect the accounts and payment vouchers of W.M. Mendis, but found that vouchers for several payments, including the one concerning the Rs. 5 million Sinniah payment, have gone missing. 

SSC Girihagama has a reputation as a ferocious prosecutor who recently defended the arrest of a former army chief of staff and director of military intelligence

In January 2018, the report issued by the Commission of Inquiry into the Issuance of Treasury Bonds charged that several officers of Perpetual Treasuries had taken steps to destroy evidence pertaining to the bond issue including voice recordings. It was in this regard that the CID had summoned four senior employees of W.M. Mendis to be questioned on several earlier occasions and on Friday, 31 August 2018. 

The four officials so summoned were Head of Information Communication Technology (ICT) Isuru Jayakody, Assistant ICT Manager Randal Senathunga, Audit Officer Hemantha Kumara and Finance Manager Sujith Alwis. On this occasion, according to documents filed in the Colombo Fort Magistrates Court by both the CID and attorneys for W.M. Mendis, all four witnesses had signed statements in which they had confessed to having met in their office late one night in November 2017 and participated in the fabrication and destruction of vouchers that they believed may later be sought by investigators. 

Instructed to lie 

All four statements of the witnesses had further charged that attorney-at-law Chandana Perera had met the foursome at the neighboring Grand Oriental Hotel (GOH) prior to their proceeding to the CID, and had instructed them all to lie to the CID by suppressing any mention of the alleged November 2017 evidence destruction incident. Three of these witnesses, Jayakody, Senathunga and Kumara, now allege that these statements were false and extracted from them coercively by CID officers by means including threats, intimidation and deprivation of food and water. For his part, Attorney Perera has denied the allegation of wrongdoing on his part, both in a sworn affidavit dated September 15, 2018, and in a written complaint sent to the police on September 23, 2018.

In a complaint to the police dated September 23, 2018, Chandana Perera has stated that after the August 31 statements had been recorded at the CID, he personally escorted Jayakody and Senathunga out of the CID around 9 pm, at which time they had informed him that they had been kept at the CID for nearly 12 hours without a proper break or refreshments throughout the day and that later in the night they were forced to make statements contradicting the first and implicating themselves.

The complaint further states that this alleged conduct by the CID officers can be charged as a serious penal code offence including fabricating evidence to obtain a wrongful conviction, using evidence known to be false, and framing a false charge against an innocent with intent to cause injury to that person. 

Over the next several days, CID officers had taken steps to investigate the the said meeting that they were told about by the four W.M. Mendis employees and had taken place on August 31st, in an attempt to corroborate the allegation levelled against Attorney Perera in the four contested statements. The CID meanwhile have obtained CCTV footage from the Grand Oriental Hotel (GOH) showing all the individuals entering, dining in and then leaving the hotel. They have also retrieved the bill for their breakfast and recorded statements from hotel employees. 

Meanwhile the whole episode took a twist on September 12, 2018. Chandana Perera had just concluded an appearance in the High Court when he checked his mobile phone and noticed several missed calls from a State Counsel, known to him, and was appearing in the Treasury Bond investigation involving W.M. Mendis. When Perera returned the call to the state counsel, he was told that the calls had been placed on behalf of Additional Solicitor General (ASG) Yasantha Kodagoda P.C., according to Perera’s sworn affidavit.

The affidavit further states that ASG Kodagoda had asked Perera to come to his chambers at the AG’s Department. Perera had agreed to meet the ASG at 4:30 pm, and had immediately informed his senior counsel Kolitha Dharmawardena of the impending meeting, as he knew that the reason why he was summoned by the ASG involved their client W.M. Mendis, according to the affidavit.

While sitting in the waiting area of ASG Kodagoda’s chamber, Perera had noticed officers of the AG’s Department, who are involved in the bond investigation, coming into the ASG chamber

While sitting in the waiting area of ASG Kodagoda’s chamber, Perera had noticed officers of the AG’s Department, who are involved in the bond investigation, coming into the ASG chamber, including Deputy Solicitor General (DSG) Haripriya Jayasundera and Senior State Counsel Lakmini Girihagama. As DSG Jayasundera entered the chamber, she has inserted a USB pen drive into ASG Kodagoda’s computer. Once the officers had all assembled, the ASG had asked him (Perera) to come and sit across him at his desk. Then, ASG Kodagoda had turned his computer monitor towards him and had showed him video footage of him entering the GOH.

He recalls ASG Kodagoda then saying that ‘they’, presumably the AG’s Department, know everything about his meeting with the four witnesses. Perera had confirmed that he met the four clients of W.M. Mendis, for a privileged legal consultation prior to their appearing at the CID. He further asserted that W.M. Mendis had so far cooperated with the investigators and complied with all court orders served on them where the Hon. Magistrate too had hailed them.

ASG Kodagoda’s response, says Perera’s sworn statement, was to accuse him of having committed a serious offence punishable with imprisonment by instructing the persons who have been noticed to appear at the CID to suppress material and make false statements, followed by an observation that Perera may be able to obtain bail, but would be sure to lose his ‘black coat’, a reference to his ability to practice law. Perera says DSG Jayasundera echoed these sentiments, before ASG Kodagoda offered him a way out.

Perera challenged 

According to the affidavit, the ASG had challenged Perera to reveal the identities of the individuals identified by initials. Thereafter, ASG Kodagoda has accused that W.M. Mendis had kept copies of the vouchers that had been destroyed and offered not to press criminal charges against him (Perera) if he could contact his client and have them surrendered.

Perera, had insisted that he had no knowledge of any such set of vouchers, and denied any wrongdoing on his part emphasising that he had only given legal, privileged legal advice to his clients. 

According to the affidavit, DSG Jayasundera had said that all four W.M. Mendis employees who had met him at the GOH and later gave statements to the CID had alleged him of wrongdoing in their statements.

The affidavit further states how DSG Jayasundera and ASG Kodagoda, issued an ultimatum to Perera claiming that unless he produces the mystery vouchers before 1:30 pm the following day, 13 September, they would file charges against him. According to what Perera has stated, the meeting concluded with him facing a choice between wrongfully implicating his client and fabricating evidence or seeing his legal career and possibly his liberty jeopardized. 

When this was brought to the notice of his Senior Counsel Kolitha Dharmawardena, the matter has been brought to the notice of Anil Silva PC, who appears for Perpetual Treasuries in the magisterial inquiry. As both of them represent W.M. Mendis and Perpetual Treasuries respectively in the bond investigation, Upul Jaysuriya PC was asked to bring the alleged incident to the notice of Attorney General Jayantha Jayasuriya PC. When this was informed to the AG, he had spoken to ASG who had confirmed his meeting with Perera the previous day. 

ASG Kodagoda supervises all major CID investigations including the assassination of the the Editor-in-Chief of The Sunday Leader newspaper Lasantha Wickrematunge, Prageeth Eknaligoda the disappearance and Keith Noyahr abduction, which have all seen arrests of military intelligence officers and heavy scrutiny of senior defence and military officials of the former regime. He also played a key role in bringing charges against businessman Tiran Alles for the alleged misappropriation of Government housing funds.

SSC Girihagama has a reputation as a ferocious prosecutor who recently defended the arrest of a former army Chief of Staff and Director of Military Intelligence in connection with the Keith Noyahr white van abduction inquiry in the Mount Lavinia Magistrates Court. 

It is said that the main issue with the allegations against the CID and AG’s Department is the long delay between the alleged occurrence of the events, and any public complaint being made. 

Although the gravity of the conduct by the CID that Attorney Perera refers to in his statement what he came to know on August 31 and the alleged intimidation he experienced on September 12 at the AG’s Department, questions have been raised as to why the allegation of improper conduct by the AG’s Department and the CID wasn’t brought to the notice of the police, the magistrate court, the AG or the Head of CID soon after the respective incidents occurred.

When the CID filed their B Report on September 13 in the Fort Magistrates Court, no complaint or public statement regarding the alleged illegal conduct of the CID or the AG’s Department had been informed to the court.  “No such complaint was made by attorneys appearing for W.M. Mendis even on the occasion of this court hearing, which took place almost two weeks after the highly unethical and possibly criminal conduct of the CID officers are accused of and even what occurred at the AG’s Department on the previous day,” once of the sources said. 

The B Report filed by the CID on September 13 carried a summary of statements recorded, which detailed the allegations contained in the contested CID statements given by the four witnesses of W.M. Mendis on August 31st. The report specifically stated that all four individuals had confessed to their role in destroying evidence, and had further alleged that the witnesses had accused Attorney Chandana Perera of having instructed them to lie to the CID. 

The Commission of Inquiry into the Issuance of Treasury Bonds charged that several officers of Perpetual Treasuries had taken steps to destroy evidence pertaining to the bond issue

All four of these witnesses had signed statements in which they had confessed to having met in their office late one night in November 2017

The allegation against W.M. Mendis was that the funds unlawfully earned by Perpetual Treasuries have been transferred to them

The first documented date for the allegations brought by Perera against the CID and AG’s Department was on September 15th, the date on which Perera’s affidavit was sworn. This too, was only sent in the form of a complaint to the AG on September 17. It was over a week thereafter, when the first complaint to the police was made and only on September 27 that attorneys for W.M. Mendis brought the allegations to the attention of Colombo Fort Magistrate Lanka Jayaratne in open court.

What the lawyers have to say

But however, lawyers appearing for the witnesses of W.M. Mendis and Chandana Perera said that the reason why it took time to lodge complaints was that they had to follow certain steps after Senior Counsel Kolitha Dharmawardhana sent the written complaint to the AG on Monday, September 17. “On Sunday, September 23, the complaint was lodged at the CID. We did not want to draft the affidavits in a hurry but record every detail what happened at the AG’s Department and at the CID,” the lawyers said.  

Meanwhile, through a motion, the lawyers appearing for the three witnesses on September 27, told the Fort Magistrate Court the CID had filed a ‘B’ report with substantial inaccuracies misleading the court. The alleged incident at the AG’s Department on September 12 was also brought to the notice of the court. In the oral submission, the defence lawyers alleged several CID officers of harassing, insulting and intimidating and coercing them to make statements that were not true and to sign these statements. 

The Magistrate thereafter inquired about it from ASG Kodagoda who was present in court. The senior prosecutor responded that because the thrust of the allegations were in the form of written submissions, that the AG’s Department would study those before responding in writing on the next court date, on October 11.

When the case was taken up on October 11, ASG Kodagoda submitted a report in a sealed envelope which contained the observations of the AG in regard to the allegations levelled against two of their senior officials, claiming that it is up to the Magistrate to decide whether the AG’s observation could be made public or not. Since the defense lawyers objected, the Magistrate returned the sealed envelope back to the ASG till she looks into the legal aspect whether the court could accept such a confidential document or not.    

When contacted Attorney General Jayantha Jayasuriya PC to know whether he was informed of the alleged incident, the AG said that he cannot make any comment. “I don’t want to discuss the matter with the media. I will take appropriate action in this regard,” the AG said.

Meanwhile, President of Bar Association of Sri Lanka U.R. de Silva when asked about the matter, said that being conscious of sub judice the BASL would would observe the response of the Attorney General’s Department “When the matter was taken up, the ASG wanted time to answer the questions that have been raised. Hence we are waiting for the outcome of the next date’s proceedings,” BASL President said.  

All attempts taken to contact Police Spokesman Ruwan Gunasekera, to find out what action the Police has taken, failed. Although a message was left with his officials, there was no response until the paper went for publication. More is expected to unfold at the next court hearing scheduled for October 25.