SAITM controversy heats up | Sunday Observer

SAITM controversy heats up

Arjuna Mahendran has not managed to steer away from controversy, even after he bid adieu to his most high-profile post; that of former Governor of the Central Bank.

The Presidential Commission appointed to probe the alleged bond scam has commenced work: The members of the Commission held their first sitting at the Justice Ministry this week.

The Attorney General’s Department also said it would appoint a panel of lawyers to assist the members of the Commission during the probe. But, even while the Commission was making preparations, Mahendran found himself at the centre of another controversy, when the results of an inquiry were leaked to the public domain.

More allegations

State Finance Minister Lakshman Yapa Abeywardena, who represents the SLFP, commented on the report while addressing a press conference at the Finance Ministry Auditorium.

Detailing the findings of the internal audit report during the press briefing, the State Minister, who also served as a member of the SLFP Committee studying the bond issue, said, the internal audit should be investigated.

State Finance Minister, Abeywardena said, the former Central Bank Governor had claimed Rs. 523,393 as hotel bills. The Minister also said, he had made hotel reservation for extra guests and has forwarded bills to the tune of Rs. 1,625,746. Minister Abeywardana quoted the audit report as saying that Mahendran’s average monthly credit card expenses -paid by the Central Bank - had been Rs. 34,427,772.

He also said, that no invoice had been forwarded for reclaimed expenses to the tune of Rs. 7,870,027. He had pointed out many other shortcomings highlighted by the Central Bank’s Internal Audit Department.

Abeywardena was not the only politician to talk about this issue in public:

Former JVP Parliamentarian and anti-corruption stalwart Wasantha Samarasinghe was the first to raise the issue, demanding that an immediate investigation be carried out. While alleging that the Central Bank’s Internal Audit Department had said that Mahendran had splurged Rs.66 million of public funds on 163 occasions, Samarasinghe demanded the matter be brought to the notice of the current Central Bank Governor, Dr. Indrajit Coomaraswamy.

Samarasinghe warned that they – the Voice Against Corruption - would consider action against the current Central Bank Governor if the latter failed to follow up on the matters raised by the Central Bank’s own Internal Audit Department.


In an important development, former Central Bank Governor Arjuna Mahendran came out strongly against the leaked information, denying the allegations made against him.

“These statements are libelous in the extreme,” the former Central Bank Governor said. “They are based on extremely dubious and unverified sources. Nor has anyone from such media organizations which gave wide publicity to uncorroborated allegation approached me to find out my version of the story,” he alleged.

“The allegation that an internal audit report from the Central Bank of Sri Lanka has made comments that are unfavorable has never been brought to my attention.

“Such audit reports cannot be finalized until the accused party is given a fair hearing for his or her explanation of events. This is standard procedure in any government or private institution. Hence, this story has no basis in fact.”

He added: “It has been stated by the Minister of Finance that a group of disgruntled employees in the Central Bank of Sri Lanka who were closely allied with a former Governor are attempting to bring the current government’s policies into disrepute. This news item is an example of such activity. We have seen several previous instances in the last 2 years where confidential reports of the Central Bank have been disseminated to the press and social media to discredit the current government.”

“It is clear that these disgruntled staff of the Central Bank are trying to deflect attention away from their own wrongdoings of the past. The doctoring of GDP data, the expenditure of vast amounts of money on futile international media campaigns, the loss of over Rs. 6 billion of state funds that were handed over by these same Central Bank officials to a now-bankrupt primary dealer are issues that these unscrupulous officials are attempting to hide.”

“During my period as Governor I cancelled all the tamashas and excessive foreign travel enjoyed by a few select cronies of a former Governor,” he further alleged.

“This is why these persons lobbied for my removal. They have effectively scuttled investigations into their shady practices from the past. These include, buying gold at very high prices, buying highly risky Greek bonds, advising the government to undertake a highly risky hedging strategy for petroleum imports and incurring huge losses for the Central Bank for 3 consecutive years by undertaking dubious foreign bank borrowings guaranteed by the Central Bank.”

He added that the officials responsible for all these actions - which resulted in several billions of dollars of losses to the country - are still in very senior positions in the Central Bank.

“If the Central Bank rules and procedures were subverted in any way as a consequence of my actions, there are ample fora to seek remedial action.

His Excellency the President has set up a Commission of Inquiry with a broad mandate to investigate such matters,” he said. “It is therefore highly unbecoming of any responsible media organization to take it upon itself to give vent to rumour-mongers and others whose ulterior motive is to bring disrepute to my erstwhile superiors, the Honorable Prime Minister and the Honorable Minister of Finance, by attacking my conduct and pre-judging the outcome of the deliberations of the Commission of Inquiry.”

“For the record, all expenses incurred by me while serving as Governor of the Central Bank were made according to proper procedures and audited by the Auditor General’s Department,” he added.

In this context, many believe the Presidential Commission of Inquiry will be a strong platform for all parties involved to lay bare the issues. The President has directed the Commission to look into all aspects and submit its first report in three months.


Aside from the bond issue, the controversy surrounding SAITM intensified this week, with SAITM CEO Dr. Dr. Sameera Senaratne barely escaping bullets on Monday night.

It all began with the Court of Appeal’s judgement on January 31, that the medical degree offered by SAITM was lawful and could be accredited by the Sri Lanka Medical Council (SLMC).

The Government Medical Officers’ Association (GMOA) declared war on this ruling and, various student bodies, including the Sri Lanka Medical Students’ Union (SLMSU) and the Inter University Students Federation (IUSF), held a series of protests in Colombo.

The GMOA – the main professional body of doctors – threatened to take union action if the government failed to dissolve SAITM. They even convened an emergency meeting on Thursday to discuss their ‘next move’ following the Court of Appeal’s verdict.

At the meeting, the GMOA decided to join hands with political groups to exert pressure on the government to take action on the SAITM issue: They met with former President Mahinda Rajapaksa’s camp and also the Janatha Vimukthi Peramuna (JVP), a party that often floats its commitment to ‘free education’.

It is against this backdrop, that former President Mahinda Rajapaksa also made the statement that the government should take the GMOA’s views on SAITM into consideration: He added that the government should take appropriate action on SAITM, if the institution did not meet proper standards.

In making these statements, Rajapaksa, under whose Presidency SAITM was formed, consolidated his position as a crusader against SAITM and private medical education in Sri Lanka.

It is important to understand that the issue of SAITM did not fall from the sky. Its founder, Dr. Neville Fernando, is considered a close friend of former President Rajapaksa and launched his business with the backing of the state.

Aside from giving SAITM University Grants Commission’s recognition, former President Rajapaksa also gave out scholarships to 10 students who obtained 3As at the Advanced Level examination, but failed to enter state medical faculties: They were given scholarships worth Rs. 7 million each, to complete their medical education at SAITM.

Former Higher Education Minister, S.B. Dissanayake and his Ministry Secretary Dr. Sunil Jayantha Nawarathne were present at the event – which goes to show that the previous government had no issues with the private medical college, formed by Dr. Fernando. What is only exemplified, is that the former President’s remark against SAITM last week, is a mere demonstration of political opportunism.


However, the many parties that have already come out against SAITM held a joint rally in Nugegoda this week, demanding the government to resolve the issue. The Janatha Vimukthi Peramuna (JVP), the Frontline Socialist Party (FLSP), the United Socialist Front, the IUSF, the GMOA, the Mahajana Eksath Peramuna (MEP) were all present at the rally, together with a large gathering of supporters and university students. It was also the first time the JVP and the FLSP shared the same stage after their split, five years ago.

While the political parties and other organizations took the matter to the streets, the Sri Lanka Medical Council, the body that is responsible for maintaining the standards of the medical sector in Sri Lanka, said, it would make a final decision on the matter, on February 17.

The management of the SLMC, headed by Prof. Carlo Fonseka, met on Wednesday to discuss the controversy surrounding granting accreditation to SAITM.

It is against this backdrop that President Maithripala Sirisena said, on Thursday, that he would intervene in the matter to ensure that no injustice would happen to medical students of state universities.

“As the President of the country, I am not partial to any party in this issue. I will bring justice to every student while being impartial. I will have discussions with all relevant parties and solve this problem in a reasonable manner,” the President said, addressing a public meeting in Talawakele, on Thursday morning.

The former President Chandrika Bandaranaike Kumaratunga, Ministers P. Digambaran, Mano Ganeshan, M.H.M. Haleem, Faizer Mustafa, Arjuna Ranathunga and State Minister V. S. Radhakrishnan were present when President Siriena made the promise.

He requested all medical students to engage in their studies without any boycott in attending lectures:

“We cannot let the children who are to take over the future of the country, to be misled by groups with vested interests. The government will fulfil its responsibility to open ways for the students to win the competitive world in a fair society”, the President stated.

He said actions would be taken to enhance the standards of free education by strengthening it through supplying required facilities for all universities.

He also pointed out, educational institutes were needed to support students who are unable to enter state universities due to limited opportunities.

Sources close to the President said, the latter would hold discussions with all stakeholders of the issue, in the coming days.The GMOA and other bodies involved in the issue are likely to present their proposals to the President.

The President’s Office sources also added that the President would appoint a high-profile committee to advise the government on the SAITM issue.

One of the solutions that has been suggested is to consider SAITM graduates on the same scale with those who obtain medical degrees from foreign universities.

That will compel the SAITM graduates to pass the ‘ACT 16’ examination before starting their careers as doctors, in Sri Lanka. However, SAITM is adamant that they should be given the same status as other state universities – a demand that has earned the ire of many groups in the higher education and health sectors.

This is why the President’s intervention is crucial to resolve the matter that has already become a simmering crisis in the political sphere.