Are the CBSL Forensic audit reports incomplete?

Are the CBSL Forensic audit reports incomplete?

Are the CBSL Forensic audit reports incomplete?

Written by Hassan Shazuli

14 Feb, 2020 | 11:55 am

Colombo (News 1st) – Local economic experts raised questions with regard to the acceptability of the recent forensic audit reports concerning the Central Bank Bond Scam.

Remarks to this effect were made during a seminar hosted by the Organisation to Protect Public Funds and State Banks in Colombo.

Former Bank of Ceylon Chairman Rusiripala Tennakoon commenting on the reports observed that details pertaining to the Central Bank’s issuance of treasury bonds from 2001 until 2005 had not been included in their investigations.

“This is an incomplete report,” Mr. Tennakoon remarked.

He pointed out that the audit firms, in their reports, had stated that the documents could not be used in legal proceedings before a court of law.

Mr. Tennakoon claimed that the reports are biased and misleading as the auditors had highlighted the losses while excluding the dividends earned as a result of investing funds belonging to the Employees’ Provident Fund.

Speaking at the seminar, former Central Bank Deputy Governor Dr. W.A Wijewardena said that the losses in this report have been calculated by obtaining the average selling and buying rates of treasury bonds, which is calculated by the Central Banks based on the rates put forward by primary dealers.

“Another mistake committed by the auditors is that they have assumed that prices in the market will always remain constant,” Dr. Wijewardena stated.

Meanwhile, the former CBSL Governor noted that the documents pertaining to the bond issuances from 2002 to 2005 were available in the CBSL’s archives.

He pointed out that the auditors could have skipped the consideration of these reports as soft copies of them were not available.

Also addressing the gathering, former Committee on Public Enterprises (COPE) Chairman D.E.W Gunasekara called the forensic audits as unscientific as it had not considered market realities.

He also noted that the name of former Central Bank governor Arjuna Mahendran, the main suspect behind the bond scam, had not been included in the report.

Mr. Gunasekara lamented that the Parliament has failed to debate on the CBSL bond scam, although the issue has figured during several discussions.

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