7 Things You Don’t Miss About Mahinda…
BuzzFeed News, which has really invested in investigative journalism, has interesting coverage of international dodginess involving the Rajapaksas. It’s interesting because it shows the wasteful and rent-seeking way that government operated. In this case, SLT was forced to invest $10 million in a shell company which did little besides pay a Rajapaksa nephew over 7 lakhs a month.
The BuzzFeed investigation is wide-ranging, connecting everything from Lyca Mobile to David Cameron. The fact that Mahinda is implicated is almost tangential to their broader investigation, but it’s quite interesting to us. As is the fact that Lyca is considering buying Hutch.
What is shows is the standard Rajapaksa practice of crony capitalism, well I wouldn’t even call it that. More like phony capitalism. Rajapaksa’s network was full of people who did nothing (or actually diminished value) and took rent for it anyways.
[Former SLT CEO] Young said he could see no good business reason for SLT having bought into Sky Network: “It was a company that effectively had no assets, had no operations, and had no value – so effectively SLT bought something, paid for it, and it had no value.”
But it had value to Rajapaksa’s nephew Hettiarachchi, who “was given an office, a car, a driver, an expense allowance, and a very generous salary”, said Young. He said Hettiarachchi was paid around $5,000 a month yet had almost nothing to do with the running of the business, turning up to board meetings only once every couple of months. “So we were just forking out of SLT to actually pay his salary and costs, because [Sky Network] wasn’t generating any income.” (BuzzFeed)
To be honest, I’ve never quite understood why Mahinda even did this. His regime was more like the mafia in, say, Goodfellas, than an actual government. The modus operandi of much mafia business is to take over something legitimate, extract as much money from it as possible (running up letters of credit, stealing resources) and then abandon it or burn it to the ground.
With everything from SriLankan Airlines to SLT to any number of smaller deals, people under Mahinda used his protection to just steal, destroying value and public money in the process. The way this works in a mafia is that a chunk of everything you steal is kicked up to the boss, which one sorta has to presume was happening here.
Despite notable improvements (highways, the cleanup of Colombo) the amount of money that Mahinda Rajapaksas mafianomics was extracting out of Sri Lanka was colossal. Thank God he’s out.
Our new government isn’t great (current President Sirisena’s brother is Chairman of SLT and Finance Minister Ravi Karunanayake’s brother-in-law is at Sri Lanka Insurance) they’re still not as professionally malignant as the Rajapaksa government.
I’d recommend reading the whole BuzzFeed report. It’s an example of how fascinating actual reporting can be.