CBSL, COPE and “the Great Bond Scam”

CBSL, COPE and “the Great Bond Scam”

CBSL, COPE and “the Great Bond Scam”

Written by Tharushan Fernando

20 Aug, 2016 | 10:26 pm

The report of the Parliamentary Committee on Public Enterprises or COPE, states that the Central Bank of Sri Lanka has been negligent in obtaining information regarding the controversial bond issue.

Submitting the report to parliament recently, COPE Chairman, Sunil Handunnetti said the investigation report would be delayed further.

The first COPE report of the eighth parliament of Sri Lanka, was tabled in parliament on the 9th of this month. The report which considers 19 public enterprises, also includes details on progress into the Central Bank bond issue investigation.

The report criticises the procedure followed by the Central Bank in furnishing information regarding the bond issue. While COPE had requested information on the bond issue from the Director of the Public Debt Department at the Central Bank on May 11, 2016, there had been no response.

The Auditor General had informed the Governor of the Central Bank on May 25, 2016 that if the submission of information is delayed, the matter would be reported to parliament.

On June 2, the Central Bank noted that arrangements could be made for auditors to visit the Central Bank and obtain the necessary information by examining records.

The next day, the Deputy Governor of the Central Bank P. Samarasiri, addressed a letter to the Auditor General noting that arrangements have been made for officials to examine the records and obtain the necessary data.

The COPE report notes that as such, while the Central Bank did not directly refuse to provide information, the procedure that was followed, caused the Auditor General’s report to be delayed.

The report notes that as a result of the actions of the Central Bank, several harmful situations were created including –

Information had to be obtained by examining a massive amount of data on computer networks and the requirement of specialist knowledge made it difficult to obtain information instantly.

The fact that the Public Dept Department which had provided the information requested in the past, had informed that information could be obtained by examining records this time around, is problematic.

While audit officers obtained information after much effort, the information had to be confirmed by the Central Bank again.

And, delaying the constitutional duties of the Auditor General by not providing specific information and limiting the scope of the Auditor General by attempting to put staff through a tiresome process.

Meanwhile, when all responsible authorities including the Central Bank Governor were summoned before COPE. Deputy Governor P. Samarasiri had noted that the Central Bank and the Auditor General have an agreement to the effect that sensitive information will not be provided and that such information can be obtained in person.

The Deputy Governor pointed out that the opinion submitted by the Attorney General on December 2, 2014 was also a reason for this.

However, the COPE report notes that the Committee was of the view that the opinion submitted in the Attorney General’s letter, cannot be interpreted to mean that the submission of information to the Auditor General should be limited.

Nevertheless, while the Auditor General’s report on the bond issue has been submitted to the Speaker, a summary has been referred to COPE.

Former Deputy Governor of the Central Bank of Sri Lanka,W.A. Wijewardena stated that this accusations levelled at the Central Bank is very serious and the parliament must certainly act on this accusation.

He added that the Auditor General can be considered to be the third eye on the Monetary Board of the Central Bank and if they have refused to provide information to the Auditor General, then what the Monetary Board has done, is in effect, blinding their own third eye.

He further noted that a very serious situation has arisen as a result of the Central Bank of Sri Lanka violating the Monetary Law Act and the Constitution.

Former senior banker, Rusiripala Tennakoon stated that it is seen that obstacles have been placed in providing information and providing information to COPE, as a deliberate obstacle; thereby the responsibility for this, lies with the Governor of the Central Bank, the Minister in charge of the financial sector of the country, the Finance Minister and all other competent authorities.

He went on to note that if the officials at the Central Bank, have deliberately covered up information with the knowledge of the governor against whom the accusation has been leveled, then it must be condemned.

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