CBSL Bond Scam: Authorities yet to take action over loss of billions

CBSL Bond Scam: Authorities yet to take action over loss of billions

CBSL Bond Scam: Authorities yet to take action over loss of billions

Written by Tharushan Fernando

02 Dec, 2016 | 8:43 pm

Authorities are yet to take action against those who are accountable for causing losses worth billions through the Central Bank Bond Scam.

Allegations were made that the treasury bonds issued on February 27, 2015 and March 20, 2016, caused massive losses to the country, and that it was done through a Primary Dealer named Perpetual Treasuries owned by Arjun Aloysius who is the son-in-law of then Governor of the Central Bank of Sri Lanka Arjuna Mahendran.

With information on the matter coming to light, President Maithripala Sirisena ordered for a committee to be appointed to probe the matter –  and later it was appointed through the intervention of the Prime Minister.

The three-member committee appointed by the Prime Minister comprised of lawyers closely associated with the United National Party, namely,  Gamini Pitipana, Mahesh Kalugampitiya and Chandimal Mendis.

Their report was produced to Parliament on May 19, 2015 and it called for a further investigations, without naming those responsible.

The Committee on Public Enterprises or COPE was then chaired by D.E.W Gunasekara and during eleven meetings, evidence was recorded from 42 persons.

When the report was to be tabled, parliament was dissolved on June 26, 2015.

Following the elections, Sunil Handunnetti was made the Chairman of COPE. COPE commenced its probe into the matter, amidst many obstacles.

It was at this time that the Central Bank refused to disclose information to the Auditor General citing that it cannot release “sensitive information.”

Despite obstacles, the observations of the Auditor Generals report was that during both bond issuances, the country suffered a loss of Rs.1674 Million.

It was also observed that the Governor of the Central Bank of Sri Lanka had failed to operate in a professional manner.

While COPE investigations took place based on the Auditor General’s Report, a UNP MP resigned from COPE and Minister Sujeewa Senasinghe was appointed to fill the opening.

Later, several members of COPE alleged that UNP members in the Committee had raised issues and attempted to undermine the final report.

Allegations were also raised that certain state officials who were summoned to provide evidence before COPE had to undergo many issues,  prompting the Chairman of COPE Sunil Handunnetti to step out of the meeting.

The final report of COPE was presented to parliament by MP Sunil Handunnetti, with the foot notes by UNP MPs attached to it.

The Auditor General later said that he only agreed to the report that excludes the foot notes.

The observation of COPE was that Arjuna Mahendran should be held accountable for this issue,  and legal action must be taken against Perpetual Treasuries.

However, the Prime Minister later ordered for the COPE report to be directed to the Attorney General.

It is currently in the possession of the AG and his observations are yet to be directed to the Prime Minister.

Later the committee received a statement bearing the signature of the secretary of the Monetary Board of the Central Bank with clarifications of the foot notes of the report and other attachments.

A report released by the Central Bank recently noted that during the first seven months of 2016 , the debt burden of the country had increased by Rs.70.1 Billion due to the sale of bonds for higher prices.

Media reports also noted that Perpetual Treasuries generated a profit of Rs. 5 billion during the first year in which the treasury bonds were issued.

Therefore , while many facts have been exposed through several reports,  how is it that those who have allegations against them are roaming free ?

“We can gather all we have and get the Attorney General’s advice on it”,said the Prime Minister Ranil Wickremesinghe, on October 28, 2016,

He added that parliament has secured a victory and as the government of good governance ‘we’ are accountable to it and if an inquiry was held into the Greek bonds then this issue will not arise.

“We did it, we turned rogues into those who follow good governance “, he said

On November 02, 2016, the premier noted that the Attorney General was told that if he needs more documents, and if they are in Parliament, to please meet with the Speaker. He can see what needs to be done and assess the report and appoint another team to study it.

Later on,  the next day, November 21, 2016  the Prime Minister said that the Attorney General can advise the government – with the exception of our privileges – other questions are posed to the Attorney General it was stated.

On November 30, 2016, the Prime Minister noted that the Bond Issue has been looked i to but the task of of investigating the buildings, which were bought in Brazil and New York by the Central Bank,  will be handed over.

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