“Move to hand over Sevanagala Sugar Co. to Daya G alleged”: PMD responds

Dhanushka Ramanayake, Director General (Media) of the President’s Media Division (PMD) has sent us the following clarification:

“The attention of President’s Media Division has beenbrought to the news item on pages 01 and 02 of The Island newspaper dated 30.10.2023, titled “Move to hand over Sevanagala Sugar Co. to Daya G alleged.”

Mr. Daya Gamage, a Sri Lankan entrepreneur and an active member of the United National Party under the leadership of President Ranil Wickremesinghe, is closely associated with politics. This connection highlights that any insinuation of a “conflict among allies” in the news, whether intentional or inadvertent, is misleading and based on incorrect information.

In the spirit of our mutual commitment to delivering accurate information to the public, we wish to present the correct details regarding the news piece in The Island newspaper from 30.10.2023, titled ‘Move to hand over Sevanagala Sugar Co. to Daya G alleged.’

No decision or proposal has been made to transfer Sevanagala Sugar Company to Daya Group.

As per the report in The Island newspaper, the Sevanagala Sugar Factory was brought under government ownership through the Revival of Underperforming Enterprises or Underutilized Assets Act No. 43 of 2011. This act also facilitated the government’s acquisition of several financially struggling institutions, including the Pelwatta Sugar Factory, Hilton Hotel and Grand Hyatt Hotel.

At the time of this acquisition, the investment in the Sevanagala Sugar Factory was attributed to the Daya Group Company, which is owned by Mr. Daya Gamage, a notable Sri Lankan entrepreneur. In cases where financial losses were incurred by investors due to the government takeover of these struggling businesses a designated assessment committee was appointed. The provisions of the same act were invoked to determine and provide compensation where warranted.

Consequently, compensation was disbursed to the companies taken over by the government. However, in the case of the Sevanagala Sugar Company, no compensation was forthcoming due to specific technical issues.

In response to this situation, Mr. Daya Gamage, as the investor in the Sevanagala Sugar Company, initiated three legal proceedings to seek compensation or the return of the property. He expressed his willingness to regain ownership and resume business operations without requiring compensation as an alternative resolution.

The government’s decision in this matter was to provide compensation rather than returning the property. In response, employees at the Sevanagala Sugar Company filed two fundamental rights cases in the Supreme Court, both of which are currently awaiting resolution.

To calculate the compensation owed to the investor for the handover of the Sevanagala Sugar Company to the government a Compensation Commission was re-established. This commission’s task is to assess the losses suffered by the investor encompassing property not only the immovable property of the Sevanagala Sugar Company but also considering the business losses incurred due to the acquisition of specific motor vehicles, machinery and equipment meant for its further development.

The Compensation Commission is chaired by the Chief Valuator of the Government and includes two retired Chief Appraisers from the Government Valuation Department as members. They are responsible for conducting the compensation calculations. To maintain transparency throughout this process, the investor has been granted approval by the cabinet to appoint a monitor.

As it stands, the government’s decision is to compensate the investor for property acquisition losses and business losses determined by the Compensation Commission. No proposal or decision has been made regarding the reversion of the property, and such a proposal has not been approved by the Cabinet.

In an effort to ensure transparency in government property disposal, a new Public Enterprises Reform Unit has been established, with criteria approved by the Cabinet. If the property is to be re-disposed, it will be done through a transparent tender process following these established guidelines.

It’s important to note that the government has not chosen to return the property to the previous investor through any other procedure and an additional related case is still pending in court.

In the spirit of providing a fair platform for all information, I kindly request that you give the same level of publicity to this accurate account as you did to the initial news in the newspaper.