Sri Lanka Supreme Court holds Rajapaksa brothers and top officials responsible for worst economic crisis

Sri Lanka's economy collapsed as it shrank 7.8 per cent last year, pummelled by long power cuts, soaring inflation, a plunging rupee and record high interest rates caused by the worst financial crisis in over seven decades.

Colombo: In a landmark judgement, Sri Lanka's top court on Tuesday ruled that former president Gotabaya Rajapaksa, ex-prime minister Mahinda Rajapaksa, former finance minister Basil Rajapaksa and other senior officials violated the fundamental rights of the people by mishandling the economy and causing the unprecedented economic crisis.

Sri Lanka declared economic bankruptcy in April 2022 by announcing its first-ever sovereign default. The island nation was hit by its worst financial crisis in history, with its foreign exchange reserves falling to a critical low and the public coming out on the streets to protest the shortage of fuel, fertilisers and essential commodities.

A five-member bench of the Supreme Court was ruling on the petition filed by Transparency International, Sri Lanka and four other activists in 2022.

The bench, in a majority 4-1 ruling, said that the respondents, including the Rajapaksa brothers- former president Gotabaya Rajapaksa, former prime minister Mahinda Rajapaksa, former finance minister Basil Rajapaksa- were responsible for economic mismanagement in the island country between 2019-2022.

Former Central Bank of Sri Lanka (CBSL) governors Ajith Nivard Cabraal and WD Lakshman, and ex-secretaries to the Treasury PB Jayasundera and SR Attygalle, were also found guilty of rights violations.

The petitioners had claimed that tax concessions worth SLR 681 billion granted to businesses in 2019 by Gotabaya Rajapaksa during his tenure as the president were the main reason for the economic slump.

Other actions, such as pegging the USD at Sri Lankan Rupee 203, the delay in approaching the International Monetary Fund for a bailout, and the decision to honour a $500 million international sovereign bond payment in January 2022 in the looming forex crisis, were cited as examples of mismanagement.

Attorneys for the petitioner said they wanted a court declaration that the mishandling of the economy by those responsible had violated the fundamental rights of people.

Since the petitioners approached the court in the interest of the public and did not seek compensation for themselves, the Court was not inclined to order compensation other than costs incurred by petitioners.

Thus, the apex court ordered all respondents to pay the petitioners legal costs of Rs 150,000 each.

Cash-strapped Sri Lanka still has a total foreign debt of $46.9 billion.

Mahinda Rajapaksa was forced to resign in May 2022, while Gotabaya Rajapaksa quit in July, following unprecedented anti-government protests over the country's worst economic crisis that led to acute shortages of staple food, fuel and power. Former finance minister Basil Rajapaksa also resigned in June last year.

The petitioners had sought action against persons responsible for the economic crisis in Sri Lanka. It was filed in the public interest, considering the lack of accountability and transparency in high-level decision-making that has brought Sri Lanka to its knees, Transparency International, Sri Lanka, said in a press release.

The press release said that the actions and inaction of the respondents led to the shortages of food, medicine, fuel and gas in the country, victimising the entire population in an unprecedented manner.