Ex-COPE Head: Govt. planning debt jubilee for its cronies

By Chaminda Silva

The government was going to write off loans obtained by a number of its close business associates under the guise of domestic debt restructuring, Nidahas Janatha Sabawa (NJS) MP Charitha Herath told The Island.

He said that close government associates had borrowed colossal amounts of money from the state-owned banks.Dr. Herath, a former Chairman of the COPE (Committee on Public Enterprises), said that successive Sri Lankan governments had allowed their close associates to default on billions of rupees borrowed from state banks.

“It seems that domestic debt restructuring is inevitable. And we have received information that close business associates of the government will enjoy a debt jubilee while state banks and pension funds will suffer,” he said.

Herath said that although some politically affiliated businessmen had not paid back billions they owe to state banks, the banks had not taken any action.

“For example, a politician from Matale took a huge loan to build a hotel. The hotel functions, but the bank loan has not been paid. A politician from the East also owes colossal amounts to banks. And under the so-called domestic debt restructuring, these people are to receive great concessions,” he said. Ultimately, an initiative to stabilise Sri Lanka’s finances, might end up burdening public finances more, Dr. Herath said.