Monetary Board probe reveals heavy EPF loss 9.5 Bn loss Central Bank bond scams
Posted on March 27th, 2017
By Shyam Nuwan Ganewatta Courtesy The Island
March 26, 2017, 12:00 pm
A special investigation, commissioned by the Monetary Board of the Central Bank of Sri Lanka, has revealed that bond scams under the current government have caused a staggering loss of about Rs. 10 billion to the Employees’ Provident Fund (EPF).
A report prepared by the investigation committee is scheduled to be submitted, within next few days, to the Committee on Public Accounts and the Presidential Commission of Inquiry into the controversial bond transactions.
The report was submitted to the Monetary Board meeting on March 23, according to highly placed sources. The investigative team led by Assistant Governor of the Central Bank of Sri Lanka (CBSL), Kumudinee Saravanamuttu, looked into the investment of EPF monies in Treasury bonds in 2015 and 2016.
The Island learns that two high ranking CBSL officials including one involved with the EPF have been accused of their links to a primary dealer.
Sources said the report sets out in detail the manner in which the EPF scam had been carried out by the two high ranking CBSL officials who had connived and done deals with the primary dealer. It has also been found that the deals which caused massive losses to the EPF have been done directly with the primary dealer or routed through other intermediary primary dealers. However, the probing team had found an audit trail which enabled them to trace all the transactions and calculate the losses to the EPF, sources said.
At the Monetary Board meeting on March 23, board members demanded that the two officials found guilty for swindling public funds be interdicted immediately and disciplinary action taken against them. However, several top officials confined their action to sending two ‘show-cause’ letters to the officials, clearly named in the report as offenders.
The soft-peddling of the issue and not taking clear action against the corrupt officials and allowing them to remain in the service at the same positions would result in they doing further damage and intimidating other officials who were against corruption, sources said.