By Shamindra Ferdinando Courtesy The Island

Former Central Bank Governor Ajith Nivard Cabraal yesterday said the Sirisena-Wickremesinghe government owed an explanation to the country as to why action hadn’t been taken against any of one of those named in the Presidential Commission of Inquiry report on treasury bond scams of 2015 and 2016.

Cabraal said so in response to a query by The Island yesterday. Pointing out that the report containing the findings and the recommendations had been handed over to President Sirisena on Dec 30, 2017, Cabraal emphasized that there couldn’t be any justification in holding up judicial action. Cabraal was Governor of the Central Bank from July 1 2006 to January 9, 2015.

PCoI’s Chairman Justice K.T. Chitrasiri handed over the report to President Sirisena in the presence of two other members of the Commission, Justice P.S. Jayawardena and retired Deputy Auditor General V. Kandasamy. Secretary to the Commission, Sumathipala Udugamsuriya was also present

Cabraal pointed out that President Sirisena appointed the three-man commission on January 27, 2017 to investigate, inquire into and report on the issuance of treasury bonds during the period February 1, 2015 to March 31 2016.

When The Island pointed out that President Sirisena is on record as having said that the commission had recommended that Sri Lanka should conduct a forensic audit regarding alleged fraudulent and corrupt practices beginning 2008 to 2014, Cabraal said that President Sirisena should release commission findings and recommendations without further delay. “Let the people know the findings as well as recommendations in respect of treasury bond scams involving Perpetual Treasuries Limited. I really want to know the recommendation as regards 2008-2014 period.”

Cabraal said that as he took over the Central Bank in July 2006 it wasn’t clear why the commission didn’t want to inquire into his entire term. Challenging the government to prove wrongdoing on his part during his tenure as the Governor, CBSL, the ex-Governor said that he was eagerly awaiting the release of the findings and the recommendations to compare them with the statement made by President Sirisena on January 3.

Responding to another query, Cabraal said that as Auditor General Gamini Wijesinghe had already dealt with issuance of treasury bonds during 2008-2014 in response to a request by the then Finance Minister Ravi Karunanayake on August 19, 2016, it would be interesting to know whether Chitrasiri’s commission took that into consideration.

The question is whether President Sirisena’s statement actually reflected the findings and recommendations contained in the report, Cabraal said, adding that thanks to wide print and electronic media coverage of the bond commission proceedings the people couldn’t be deceived. The bottom line is that the public knew what the recommendations ought to be, Cabraal said, urging the government to expedite the process.

Cabraal stressed that whatever the parliamentary process in respect of the bond report such procedure shouldn’t either delay or hinder the Attorney General acting on the findings and the recommendations. Cabraal said that so far there hadn’t been any indication whatsoever as regards action taken by the Attorney General. Pointing out that recent special parliamentary session hadn’t in anyway contributed to speed up the inquiry, Cabraal said that it wouldn’t be fair to hold up the judicial process until parliament meets again on January 23.

Referring to President Sirisena’s January 3 statement, Cabraal said that obviously the SLFP leader conveniently refrained from commenting on some critically important matters that had transpired in the commission.

There hadn’t been any reference to the circumstances leading to Prime Minister Ranil Wickremesinghe directing Singaporean Arjuna Mahendran to change fool-proof and time-tested auction cum direct placement system that was in place since 1997, Cabraal pointed out. Cabraal said that for 18 years that system ensured successive governments obtained required funds at the best possible interest rates. On the other hand, that system prevented any primary dealer exploiting it at the expense of the national economy, the accounting professional said.

“Give me one good reason to change the system in place”, Cabraal said, pointing out that had there been exploitation of that during his tenure as the Governor, yahapalana leadership should have said so at the time Premier Wickremesinghe issued instructions to Mahendran to implement auction only system. Cabraal said that the parliament was told of time tested and highly effective auction cum direct placement system being corrupt and unregulated on March 17, 2015. “Obviously, it was propaganda to divert attention.”

Cabraal said that President Sirisena refrained from commenting on several critical matters; ministers Ravi Karunanayake, Malik Samarawickrema and Kabir Hashim attending a meeting at the Central Bank on the day before the first fraudulent transaction, there was also no mention of the role played by the Bank of Ceylon (BoC) in financing Perpetual Treasuries Limited amounting to Rs 10 bn, the Central Bank making available Rs 40 bn via its ‘Intra-day Liquidity Fund (ILF) as well as BoC, People’s Bank and the National Savings Bank having been issued specific instructions by then Finance Minister Karunanayake to bid low for treasury bonds in the presence of incumbent Treasury Secretary Dr. Samaratunga.

Cabraal said those responsible for prosecuting wrongdoers should keep in mind that the country’s biggest annual tender is for the issuance of treasury bills and treasury bonds amounting to staggering Rs 2,000 bn whereas the second tender would be for oil amounting to approximately Rs 375 bn.

He said the SLFP couldn’t take advantage of the bond commission report. That was the undeniable truth, Cabraal said, adding that there was no question as regards the UNP’s culpability in the first bond scam in Feb 2015. For the second far bigger robbery carried out in March 2016, the responsibility lies with all political parties which backed the dissolution of parliament to prevent the then COPE (Committee on Public Enterprises) Chairman Dew Gunasekera from tabling comprehensive report on the first scam, Cabraal said.