Forensic Audit reveals potential nexus between employees of Central Bank and primary dealers

Forensic Audit reveals potential nexus between employees of Central Bank and primary dealers

Forensic Audit reveals potential nexus between employees of Central Bank and primary dealers

Written by Staff Writer

25 Jan, 2020 | 11:42 pm

Colombo (News 1st): The 5th volume of Forensic Audit report revealed links between former and current officials of the Central Bank and the employees of primary dealers. Certain connections initially revealed by the Presidential Commission of Inquiry appointed to probe into Central Bank bond scam, have been confirmed by the Forensic Audit report.

The connections vary from the high ranking to the low ranking positions of the Central Bank. The Five Forensic Audit Reports on treasury bond transactions that had taken place between 2002 and 2015, reveals potential relationships that could turn out to be potential conflicts of interest and non-compliance with the Central Bank.

According to the report, when reviewing the documents provided by the Central Bank; deviation and anomalies reported during the process, followed. The identified officials operated at the supervision department and they had the authority to approve or initiate action.

The report mentioned the following instances.

A. Former officials of Supervision Division took up positions in other primary dealers

B. Social media connections such as, personal and professional, between the CBSL officials and officials of other primary dealers

C. Relatives of CBSL officials in the roles of key staff employees of primary dealers

D. Business partnership and shareholding pattern in primary dealers and group companies by any higher management of the primary dealers involved in conducting regulation and supervision function

The report added that relatives of former Governors had a beneficial interest, held key managerial positions through directorship or shareholding in other primary dealers and/or its associated companies.

It was mentioned in PCOI Report that the relatives of Ajith Nivard Cabraal held influential positions in primary dealers and/or related company of primary dealers, during his tenure as a Governor of the CBSL.

Arjuna Mahendran before testifying before the Commission of Inquiry said that his son-in-law had a beneficial interest in PTL and continued to be a Director and Shareholder of the Holding Company of PTL while he was the Governor of the CBSL.

The forensic audit points out, due to non-compliance, not having proper policy guidelines in place and the lack of transparency in certain transactions, the government incurred heavy losses in its treasury bond transactions.

Speaking regarding the issue UNP MP Ajith P. Perera noted that this is an organized crime network spread across businesses linked not only to Arjuna Mahendran and Arjun Aloysius, but also Ajith Nivard Cabraal and his relatives. He said they reached an agreement yesterday to hold a two-day parliamentary debate on the forensic audits, during the final week of February. He stressed that those responsible for the bond scam, those who protected the perpetrators, and those who benefitted from the scam must be punished, regardless of their political representations.

Meanwhile, Minister Johnston Fernando noted that he has not read the forensic audit report as they are yet to receive this report. He added that the UNP defrauded the Central Bank and it is pointless talking about past transactions. He said those responsible for the Central Bank bond scam must be punished, and this is where their government will come into the picture.

Speaking to the media today UNP MP Bundula Lal Bandarigoda noted that prior to the release of the forensic audit reports, Ajith Nivard Cabraal came forward to claim that the forensic audits cannot be accepted. He said the forensic audit reveals how he issued bonds under direct placements and conflict of interests in the bond transactions that had taken place since 2002. He noted that whether its Arjuna Mahendran or Ajith Nivard Cabraal, they as the opposition will not back down to ensure, all those responsible for misusing public funds will be punished.

State Minister Mahinda Yapa Abeywardene today speaking regarding the audit noted that they have not analyzed the forensic audit report properly. He said they have not received the complete copy of it yet, therefore, he added that after they analyze the complete report, they will express a view in this regard.

JVP General Secretary Tilvin Silva also commenting on the audit noted;

“Both parties are thieves. They misused the funds of the EPF that belongs to the general public. They tried their best to hide the forensic audit report. But because we urged them to release it, they released a section of the report. But not the complete report. Once the complete report is released, we can see both party’s true colors. After the UNP came into power in 2015, they brought in Arjuna Mahendran to defraud the Central Bank. Public funds were misused through treasury bond transactions even more during Mahinda Rajapaksa’s government. Now both parties are trying to sweep the forensic audit reports under the carpet.”

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