Politicos & the infamous People's Bank Loan of 10 Bn

Colombo (News 1st) -  People's Bank on several occasions in its clarifications stressed that the Rs. 10 Bn loan transaction was done following the proper procedures. A statement from the Chairman of People's Bank - Hemasiri Fernando states that the loan facility was granted after considering the business scope of the Company and the repayment capacity of the Company. Fernando's letter notes Jehan Amaratunge and MTD Walkers PLC are considered as separate legal entities before the Law and therefore there is no issue with respect to this transaction. According to what Hemasiri Fernando states, the People's Bank appears to have followed the regulations and other requirements of the Central Bank of Sri Lanka. However, Former Senior Banker Rusiripala Tennakoon says there are many issues within this transaction itself. Tennakoon has already sent a letter to the Governor of the Central Bank requesting this matter be investigated. According to Tennakoon when a loan of Rs. 10 Bn is given to a company in which a Director of the Bank is also listed as Director, the Banks Audit Committee must approve it. Since 2010, Jehan Amaratunge had been serving in the Audit Committee of People's Bank. Tennakoon questions as to how can one say there was no influence from Amaratunge when this loan was given to MTD Walkers. Jehan Amaratunga is a member of the Board of Directors at the People's Bank. Amaratunga is also the Executive Deputy Chairman of MTD Walkers PLC. Didn't a similar incident take place with regard to the Central Bank Treasury Bond Scam? It was revealed at the Presidential Commission of Inquiry the manner in which Former Central Bank Governor Arjuna Mahendran steered the auction in a manner that benefited his Son-in-Laws Company. Are they not attempting to justify the interference of Jehan Amaratunge in this transaction just as they did with the Bond Scam, rather than conducting an inquiry and pursuing the matter? Wasantha Samarasinghe convenor of the Voice Against Corruption states if the Director of People's Bank approves a loan of Rs. 10 Bn for himself it could be assumed that with the passing of time this loan would become a non-performing loan. The Ceylon Bank Employees Unions point out there is an increase in political interference in State Banks. The Union states, the Chairman of People's Bank has been given an order via political intervention to promote 10,000 employees within two weeks. Ranjan Senanayake the Secretary of Ceylon Bank Employees Union states that very recently state banks were sent a list noting the decisions of those who were subject to political persecution. It had given notice, to promote and grant financial benefits to unsuitable individuals. Ranjan stated that the union informed this to the government authority stressing the fact there is a proper system to be followed with respect to promotions. Lakshman Kiriella, the Minister of Public Enterprise said such a list was never sent to the banks. However, the Minister said that the party committee recommendations were sent to the Cabinet Minister Ranjan Senanayake concludes that they had to file a writ with the court of appeal against the People's Bank List which was received. The Union makes a statement to the Government, the President and the Prime minister that State Banks are crucial centers in the economy and such bias actions would cripple them.