Media Unit Anti-Corruption Front

The Anti-Corruption Front (ACF) wrote to President Maithripala Sirisena on May 05 calling for a Presidential Commission of Inquiry to be established with regards to looking into Treasury bonds issues.

The ACF noted that this was in order to have transparency with regards to the issuing of Treasury bonds done by the Central Bank of Sri Lanka (CBSL) and with the view of preventing corruption.

The ACF has on several occasions previously brought the issue of the issuing of Treasury bonds by the CBSL to the attention of the relevant parties. Observations made by the ACF with regards to Treasury bonds issues made on 2015 February 27 and 2016 April 01, have given rise to many grave suspicions concerning the said issues.

It is most unfortunate that the CBSL has hitherto been unable to convince the public regarding the transparency of the aforementioned two bonds issues. The first issue has by now been almost completely forgotten and while the ACF wrote a letter to the CBSL querying about the bonds issue in April this year, with a copy of the said letter also sent to the President, the ACF has yet to receive a reply regarding such.

The CBSL was heavily criticized by the ACF during the tenure of the past regime due to the lack of professionalism and transparency in the conduct of their affairs. It is the lack of transparency in these dealings that is one of the reasons as to why the country is presently caught in a massive debt trap.

The Government of Sri Lanka under President Sirisena has on five occasions, once in 2015 and four times during 2016, issued Treasury bonds.

The Government has taken no steps/measures thus far to clear the suspicion and doubt concerning the last Treasury bonds issue which took place on April 01.

Regarding this, the ACF on April 07, in a letter also copied to the President, put forward the following observations,

1. The CBSL has only made an announcement and a notice for the issue of Rs 40,000 million worth bonds.
2. On 2016 March 29, considering that there had been or was a high demand for bonds on the said date, Rs 80,000 million worth bonds had been issued.
3. Out of this amount, Rs 28,975 million was sold on the basis of a high interest rate of 14.23% (Rs 80.52 million for a period of 14 years and one month).

Based on the aforementioned observations, the ACF expects that the CBSL would respond to the following questions.

1. Why were Rs 40,000 million worth bonds advertised and instead Rs 80,000 million worth bonds issued?
2. Why did the CBSL grant approval to the country’s economy’s most expensive bid?
3. What are the names of the primary dealer companies that bid for 14 years and one month? What were the amounts of the shares they obtained and what were the interest rates pertaining to those and them?

If the CBSL is not going to reveal the aforementioned information and details to the public and establish that the said bonds issue had been done in the best interests of the State, as per the Constitution, the responsibility of intervening falls on the Executive President.

The ACF therefore humbly requests that the President appoint a suitably qualified Presidential Commission of Inquiry or as wished by the President any other suitable inquiry mechanism to look into Treasury bonds issues made since the yahapalana (good governance) Government came to power in 2015 January.

Media Unit

Anti-Corruption Front

5^th May 2016