-By A Special Correspondent
(Lanka-e-News -15.June.2025, 10.50 PM) For years, Daya Gamage stood as one of Sri Lanka’s most powerful industrial-political hybrids — a businessman turned politician, whose reach extended from linen shirts and apparel factories to Parliament chambers and state boardrooms. His connections ran deep within the United National Party (UNP), and he was seen as one of the prime beneficiaries of the cozy relationship between political power and public finance.
But the tide has turned.
On July 2nd, at precisely 10 a.m., three companies belonging to Gamage’s once-sprawling business empire — Daya Group Limited, Daya Apparel Exporters (Pvt) Ltd, and Olympus Constructions (Pvt) Ltd — will go under the hammer in a public auction, by order of the Colombo Commercial High Court.
The reason? A court-sanctioned effort to recover a staggering Rs. 104,229,342 in unpaid loans owed by Gamage to the state-owned People’s Leasing and Finance PLC — a debt he has largely failed to service.
In a formal notice issued by the Registrar of the Commercial High Court, signed off by the Deputy Fiscal, it was confirmed that the public auction will proceed as scheduled — the companies, which once flourished under political protection and public funding, will be liquidated in broad daylight for all to see.
Of the original Rs. 108 million owed, Gamage has reportedly repaid only Rs. 4 million — a pittance compared to the liability at hand. The state lender has now taken the legal route to recover the remainder, putting an end to what critics describe as yet another tale of state-subsidised privilege gone wrong.
This auction is not merely about recovering funds. It is a dramatic reckoning — a moment of political and financial catharsis for a country that has, for decades, watched elites dine on public wealth with impunity.
To understand the symbolism of this moment, one must first understand the trajectory of Daya Gamage. Once a household name in Sri Lanka’s Eastern Province and the business corridors of Colombo, Gamage rose to prominence as a textile magnate during the 1990s. His Daya Apparel group, built on lucrative export contracts, was hailed as a model of regional entrepreneurship.
But his real ascent began when he entered politics under the UNP banner. With backing from party stalwarts and a knack for aligning business interests with political loyalty, Gamage soon found himself appointed Minister of Primary Industries under the Yahapalana government.
It was during this period that his businesses began receiving unusually generous lines of credit from public financial institutions — most notably, the People’s Bank, Bank of Ceylon, and People’s Leasing.
Critics alleged that these loans were politically motivated, disbursed with limited scrutiny and later quietly written off. The most infamous of these transactions involved a colossal Rs. 2.647 billion loan from People’s Bank to Gamage’s apparel company — a loan which, according to official sources, was later classified as a “bad debt” and effectively cancelled during Ranil Wickremesinghe’s dual tenure as Prime Minister and Finance Minister.
The practice of converting politically connected loans into “non-performing assets” was rife during Wickremesinghe’s time in office. According to internal banking reports, public banks were pressured to absorb over Rs. 54 billion in unpaid loans extended to corporate allies of the UNP and SLFP — with very little chance of recovery.
Gamage’s defaulted debts stood out not only for their size, but for the brazenness with which they were handled. Senior banking officials, speaking anonymously, described how collateral valuations were inflated, repayment terms relaxed, and internal objections sidelined under political instruction.
“These weren’t commercial transactions — they were political IOUs,” said one former executive at People’s Bank.
In Gamage’s case, the collateral provided was often speculative — land valuations based on future zoning approvals, factories with outdated machinery, and export orders that never materialised. But none of it mattered: the loans were approved, the funds disbursed, and the public left holding the bag.
But the winds have shifted. The arrival of the National People’s Power (NPP) government, led by President Anura Kumara Dissanayake, has brought with it a new political mood — one that is aggressively anti-corruption and anti-oligarch.
Gone are the days when political donors could treat state banks as personal ATMs.
The Gamage auction is being held up as a test case — a symbolic demonstration that even the most well-connected figures will not escape scrutiny. Officials close to the Ministry of Finance have indicated that further auctions of defaulter properties are in the pipeline, including those linked to media tycoons, construction moguls, and even certain retired parliamentarians.
“This is not revenge,” said one senior aide to the President. “It is restitution. The people were robbed. Now, we recover what is owed.”
For Gamage, the timing couldn’t be worse. Stripped of political office, his influence has dwindled. His once-sizable network of UNP backers is now in retreat, and the country’s financial regulators are under new, assertive leadership.
Observers note the bitter irony in Gamage’s downfall. As a legislator, he was among the most vocal supporters of fiscal discipline and industrial development. He frequently lectured opponents on entrepreneurship and spoke passionately about public-private partnerships as tools of national upliftment.
But behind the podium, his operations were being propped up by state lenders who were bleeding losses. The apparel export firm, once lauded as a regional success story, was effectively functioning on borrowed time — and borrowed money.
Even his construction arm, Olympus Constructions, was marred by cost overruns, incomplete contracts, and unpaid dues to suppliers. Insiders say employees at Daya Group have gone unpaid for months, and key managers have quietly exited the scene in anticipation of legal fallout.
“The only thing keeping him afloat was his political cover,” said a former associate. “And now that’s gone.”
The announcement of the public auction has triggered widespread discussion on social media and among Colombo’s political class. Many see it as a long-overdue correction — a sign that Sri Lanka’s culture of impunity is finally being dismantled.
“Daya Gamage is just the beginning,” tweeted one political commentator. “The banana tree has been chopped. Let’s get to the rest of the plantation.”
Others have been more sceptical, warning that unless prosecutions follow, auctions may be seen as performative rather than transformational. Still, the symbolism is potent: a man who once benefited from the invisible hand of political protection will now have his assets sold off under the cold glare of public auction.
While the July 2nd auction will focus on company assets, legal analysts suggest that further proceedings could target Gamage’s personal holdings, including real estate and luxury vehicles.
Additionally, there is speculation that the Attorney General’s Department may initiate proceedings to investigate whether fraudulent misrepresentation occurred during the original loan applications — a move that could open the door to criminal charges.
If that happens, Gamage may find himself not only bankrupt but behind bars.
In a country where political elites have long looted with impunity, Daya Gamage’s fall from grace is more than a personal tragedy. It is a cultural moment — a shift in public expectations and a warning to others who still treat public finance as private property.
It is, as one Colombo banker put it succinctly, “the beginning of the end of the Banana Republic era.”
For Daya, the auctioneer’s gavel will fall not just on his companies, but on a way of doing business in Sri Lanka. One that, for the sake of future generations, must never return.
-By A Special Correspondent
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by (2025-06-15 17:19:54)
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