Lanka bond commission report serves President Sirisena’s political interest
Posted on January 3rd, 2018
Courtesy newsin.Asia
Colombo, January 3 (newsin.asia): The report of the Sri Lankan Presidential Commission which probed a massive illegality in the issue of Treasury Bonds by the Central Bank of Sri Lanka (CBSL) in 2015, serves the political interest of President Maithripala Sirisena.
The report on the multi billion rupee scam, the main contents of which were revealed to the country by Sirisena on Wednesday, helps him keep the coalition with the United National Party (UNP) going despite sharp differences and moves within to scuttle it.
By only mildly ticking off UNP leader and Prime Minister Ranil Wickremesinghe for going by the false assurances given by the erring bank Governor Arjuna Mahendran, the report helps Sirisena safeguard his relations with his Prime Minister, who heads the single largest party in parliament.
By saying that similar scams had taken place when Mahinda Rajapaksa was President, and his man Ajith Cabraal was CBSL Governor, and that the bonds issued between 2008 and 2015 should also be investigated and legal action taken, the report helps put Joint Opposition leader and carping critic Rajapaksa and his henchmen in the dock.
With Sirisena saying that he has asked the Attorney General to begin the legal process, the Rajapaksa camp will have cause to worry in the run up to the crucial local bodies elections in February.
President Sirisena, who is now portraying himself as a crusader against corruption and thereby against the corrupt former regime headed by Rajapaksa, has declared that he will go by the commission’s recommendations to reform the monetary system and also the Central Bank.
The President’s faction of the Sri Lanka Freedom Party (SLFP), which has been losing public support for not living up to its 2015 election promises, is expected to use the anti-corruption plank provided by the bond scam report to weaken the Rajapaksa camp ahead of the February elections.
The report has recommended legal action against former Governor Arjuna Mahendran and his son in law Arjun Aloysius, head of Perpetual Treasuries (PTL), a primary dealer. The only politician singled out for punishment is former Finance Minister Ravi Karunanayake, though the CBSL was under the purview of the Prime Minister and not the Finance Minister.
The Scam
In late February 2015, soon after Sirisena and Wickremesinghe came to power replacing the Mahinda Rajapaksa regime, the Central Bank suddenly decided to raise LKR 10 billion from a sale of 30-year government bonds with a coupon (fixed interest rate) of 12.5% , when it had initially advertised an offer of LKR 1 billion with a fixed interest rate of 9.5%.
Despite the sudden change in the terms, Perpetual Treasuries Limited, a primary dealer owned by Arjun Aloysius, who is also the son-in-law of then Central Bank Governor Arjuna Mahendran, and its associate Bank of Ceylon, took 73.5% at an an interest rate of 11.5%. It was suspected that Aloysius had inside information about the hike and was prepared for it while others were in the dark.
Arjuna Mahendran, a Sri Lankan-Singaporean banker, had been chosen for the top banking job by Wickremesinghe. But under a cloud over the scam, Mahendran resigned and was replaced by Dr.Indrajit Coomaraswamy, said to be a nominee of President Sirisena.
Sirisena’s Sri Lanka Freedom Party (SLFP) and Wickremesinghe’s United National Party (UNP) were sharply divided on the bond issue though they were both part of the National Unity government.
Early in 2017, Sirisena felt that the SLFP would lose political credibility if it did not clear itself of the charge that it was also protecting the wrong doers. Sirisena then asked the Prime Minister (under whom the Central Bank functioned) to clear his name. Instead of making his submissions in writing Wickremesinghe decided to appear before the commission and answer all questions.
Extent of Scam
The bond commission found that the illegal bond issue made to benefit the PTL headed by Arjun Aloysius , CBSL Governor Mahendran’s son-in-law, had caused a total loss of LKR 11,145 million. Out of that LKR 8529 million had been from the Employees Provident Fund (EPF), the Mahapola Scholarship Fund, National Savings Bank and Sri Lanka Insurance Corporation. The balance was from private institutions.
Hence the loss to the public sector – EPF, Mahapola, NDB and SLIC – was over Rs 8.5 billion. Perpetual Treasuries Limited (PTL), the primary dealer and the kingpin of the scam, had made a profit of LKR 11,145 million within five months, the report found.
In the auction held on 27th February 2015 alone, Perpetual Treasuries Limited has made a minimum profit not less than LKR 688 million. The Commission is of the opinion that further investigations could reveal that this amount could even be more than that. As revealed during the investigations, PTL had made an undue profit of Rs 11,145 millions in the secondary market. In this, EPF and other government institutions had lost more than LKR 8,524 million or LKR 8.5 billion,” the report said.
The report stated that PTL had earned profits through means that are not legal, with the involvement of Governor Arjuna Mahendran, CBSL officials and some external parties.
Prime Minister’s Role
The report said that Prime Minister Wickremesinghe had erred in going by the information and assurances given by the then Governor, Mahendran, on the question of conflict of interest” in regard to his son in law and primary dealer Arjun Aloysius.
The Commission is of the opinion that the Prime Minister made his statement in parliament regarding the appointment of Mahendran believing in the facts presented by Mahendran and Samarasiri, especially, the promises made by Mahendran. The report also says that the Prime Minister should not have done that. The Commission further stated that these facts were before the parliamentary Committee on Public Enterprises (COPE) and the Prime Minister had not stated these, because of that he had not taken proper action against Mahendran,” President Sirisena quoted the report as saying.
When Wickremesinghe testified before the commission, he revealed that in January 2015, he was told that Aloysius would be resigning from PTL and that he was going to spend his time developing the Mendis distilleries business.
That was all I knew. Other than that, I didn’t know his affairs,” the Prime Minister had said. I had no information that he (Mahendran) in fact deliberately misled me,” he added.
After the matter went to parliament, he had left it to parliament to proceed further in the matter, the Prime Minister said. Wickremesinghe added that the conflict of interest issue had been there before too, referring to former Governor Ajith Nivard Cabraal’s sister’s alleged Directorship in PTL.
Spineless CBSL Officials
The report stated that senior officials of the CBSL were inactive” before Arjuna Mahendran. Bad decisions were made because these officers had become inactive.
Mahendran had made interference into Treasury bond auctions through a process of incorrect and unconventional methods and he was responsible for providing internal information to outsiders. Such conduct has allowed one party to obtain undue monetary gains,” the report states.
Former Finance Minister’s Role
The Commission’s report refers to the allegation against former Minister of Finance Ravi Karunanayake regarding the payment of rent for the ‘Penthouse’ apartment by Walt and Raw Company owned and controlled by the Aloysius family.
Karunanayake was responsible for that and recommended that the government should to take necessary action against Ravi Karunanayake under the section of bribery and corruption, and further legal action should be taken under the penal code for giving false evidence at the Commission,” the President said.
Misuse of Employment Provident Fund
The Commission mentioned the misuse of funds of the Employees Provident Fund (EPF), and stated that a forensic audit examination should be conducted to find out the amount of losses of EPF. The people responsible for these frauds have been identified and the Commission recommends legal action against them ,the President said.
The report recommends that, the legal action be taken against relevant persons and officials who are responsible for the fraud including Perpetual Treasuries Limited, Arjuna Aloysius and Kasun Palihena. It also recommends action to recover lost funds. Accordingly, the government is in consultation with the legal authorities ,the President said.
Probing Past Illegalities
The Commission pointed out that similar scams had happened even in 2008-2015 (when Joint Opposition leader Mahinda Rajapaksa was in power). It recommended that the CBSL should first conduct a forensic audit with regard to the alleged fraud and corrupt practices from 2008 onwards, and based on such findings, legal actions should be taken.
The present report dealt only with the events in 2015 and 2016, but funds of the EPF were lost mostly between 2008 and 2015 ,the President said.
I have already submitted this report to Attorney-General and the Commission recommends that the criminal and civil court action must be taken through the Criminal Investigations Department and the Commission to Investigate Allegations of Bribery or Corruption,” he said .
Recommendations
Considering the recommendations of the Commission, the government is to make new Monetary Law Act to avoid such malpractices in the CBSL in future. The existing legal provisions are old and need replacement,” President Sirisena said.
The commission also recommended that the Registered Share Market Act must be replaced by a new legal act. Members of Monetary Board and Central Bank Governor must be appointed by the Constitutional Council in concurrence of the members. The regulations must be amended accordingly ,the report said.
The report recommended that there should be highest levels of supervision over the Public Debt Department.
As auditing at the Central Bank has not been conducted in a proper manner, the Commission recommends that the Audit Department must be reorganized completely. A Legal Department must be established in the Central Bank and ensure that the Legal Department functions efficiently.”
In a broader recommendation ,the commission stated that the Attorney General and the Commission to investigate Bribery or Corruption must take legal actions to implement the recommendations of the Commission.
Recovering Money
As regards recovering money from fraudsters, the Commission recommended that parliament legislate for speedy recovery. The commission had also said that all the expenditure occurred for the Commission must be recovered from Perpetual Treasuries Limited.
We agree to that recommendation,” the President said.
I have already submitted a copy of the Commission Report to the Attorney-General and he will identify the persons against whom the legal action must be taken and initiate necessary criminal or civil legal action to implement the recommendations of the Commission , the President stated.
Reform of CBSL
The confidentiality, astuteness and auditing methods of the Central Bank of Sri Lanka were extremely weak, the report said. There were no tele-recording systems, electronic monitoring or even CCTVs. The current Governor of the Central bank has already taken steps to remove weaknesses and rectify these errors.
The Governor has informed that he has suspended some employees of the Central Bank after their malpractices were revealed in the investigations in the Commission and disciplinary actions are being taken against those officers. I expect the Governor to make a statement in the near future regarding the shortcomings in the Central bank as revealed in the commission’s report,” the President said.
Monthly Review
I have informed my Secretary to hold monthly review meetings with the heads of relevant departments and institutions to examine the progress in implementations of the recommendations of the commission to take legal steps against those individuals and take other required steps in an efficient and speedy manner,” the President said.
I would like to specifically state here that I would not hesitate to take steps to recover the loss of Rs 11,145 million to the government and take legal action against the offenders and punish them,” he assured.
The President said that his approach will be non-partisan and alleged wrong doers from both political parties will be investigated.
(The featured picture at the top shows Sri Lankan President Maithripala Sirisena addressing the nation on the bond commission report)
January 3rd, 2018 at 3:35 pm
need a commision for this too!
http://www.dailymirror.lk/plus/article/-How-Deforesting-is-Killing-An-Island-s-Natural-Heritage–143185.html
January 3rd, 2018 at 4:47 pm
It does NOT matter if it serves My3’s interests or not. He has done the RIGHT thing. All patriots must HAIL the president for this.
A patriot will NOT rob the nation or ALLOW robbers to go UNPUNISHED.
This is just the beginning. 33 more reports are in the process. Wait till they are taken up one by one.
IF Sira plays his cards right he can DESTROY all his enemies with these 34 reports. SL GAINS. Excellent timing. 2018 and 2019 are ELECTION YEARS.
January 3rd, 2018 at 5:06 pm
Christie Says:
January 3rd, 2018 at 4:52 pm
මහෙන්ද්රන් බඩකරපු එකා අවුරුදු දෙකකට පස්සෙ දැම්මෙ බෙට්ටක්?
මේක මුන් සුදනන් වෙන්න කරපු ලොකු ප්රෝඩාවක්.
අලුත්ම චන්ද ගුන්ඩුවක්.
හැබැයි මේ ගූ ගොඩ (මේ ආන්ඩුව) මහෙන්ද්රන් ඇතුලු ඉන්දියන් පරපෝසිත්යන් වදපු බෙටිනෙ.
Christie Says:
January 3rd, 2018 at 5:02 pm
“(Monitory Law Act)”. India has its own monitory law acts to monitor Hon President and his government.
Our Ordinances and laws are pretty good an adequate to claw back the 11 billion Rs. unlawfully taken away from the country.
Will the Commission report lead us to recover the money?
January 3rd, 2018 at 5:19 pm
Prosecuting a minister or anyone else is a cunning way to pacify the gullible masses who lost more than 11 billion Rupees.
What we need is immediate recovery of the money lost and penalties and interest to compensate the loss.
Those involved should be immediately arrested until the money is recovered.
January 3rd, 2018 at 6:45 pm
@ Lorenzo,
Saving of Rs 11 Billions is nothing if My3 shows blind eyes to the Federal constitution. If there is a war between North and South after giving full powers to North, Rs 11 Billions won’t be sufficient for one week’s military expenditure. US, India, Norway, UK and every Western country will support the Ealam state to grab their share on the natural resources surrounding the Island and the Southern government will be begging for funds from China and Russia to save the borders.
While Sumanthiran is propagating publicly the Federal Issue to his election candidates, My3 is keeping quiet and now jumping up and down all of a sudden on the Bond Issue. He did not utter a word up until now on the Bond fraud other than appointing the Committee. It looks like he has got the instructions only now to fire the gun to divert the public attention.
His firing only makes a sound.. That’s all
The timing suits well for the enemies of Mother Lanka. These looks like well calculated actions.
January 3rd, 2018 at 7:52 pm
Here are some questions which I would have asked Ranil the Traitor if I was on the Presidential Commission.
1. Was the bond scam which was put into action as soon as Yahapalanaya came in and the Exec PM was appointed, planned way before the election and if so who did the planning? Did it come as a ready-made plan from international groups who were the ones who wanted Ranil to be appointed as the PM?
2. The key players such as Paskaralingam (Head of Treasury), Arjun Mahendran (Governor Central Bank), Arjun Aloysius of Perpetual Treasuries – were they ready primed and waiting to come to Sri Lanka immediately after the election and take up the high monetary posts?
3. How was the bond scam pulled off so fast?
4. Both Ranil and Malik Samarawickrema have stated that the UNP received no funds from the bond scam. Yet we all know that the UNP was broke and were Rs. 3 billion in debt. Yet very soon after the bond scams they are supposed to have got enough money to give Rs. 50 million to each of the MPs as well as repair Sri Kotha which was in shambles.
5. Why did My3 dissolve the Parliament just as the COPE report was about to be presented to the Parliament? Did Ranil instruct My3 to do so?
6. After the first bond scam, why was My3 not allowed to investigate the bond scam? Why did he allow Arjun to remain as the Gov of CB resulting in a second bond scam in 2016? If My3 had any backbone he should NOT have dissolved the Parliament and should have had the COPE report and acted on it fast. That would have prevented the second bond scam. He could not since he came into power with the grace of the UNP though he is the official leader of the SLFP. What a mess we have in Sri Lanka. The real leaders like MR are not allowed even in the opposition. However, all the scum bags who lost the vote were brought in by My3 into the Parliament and given Ministerial posts by My3 through the National lists. How hypocritical our backbone less President is.At the end of the day, it is the country that suffers.
7. Did international powers have a hand in protecting the people who were involved in the bond scam from prosecution? It is such an open /shut case of insider trading that it should not have taken such a long time to close the case and bring the culprits to justice.
8. The Monetary Board of the Central Bank also had powers to stop unethical bids which were negative for the country. Why did the Monetary Board not stop the scams?
January 3rd, 2018 at 8:50 pm
Hiranthe,
That is NOT right. We have to say GOOD for GOOD things and BAD for BAD things.
Otherwise politicians will FIRST WIN YOUR HEART, BLIND YOU TO REALITY AND DESTROY THE COUNTRY.
January 3rd, 2018 at 8:53 pm
Neville,
Please post Run-nil’s answers IF you get them!
I AGREE with you on point 6. My3 dissolved parliament to SAVE Ravi from a NO CONFIDENCE MOTION. But NOTHING HAPPENS by a no confidence motion. Isn’t it? NO ONE has been jailed by a no confidence motion.
January 3rd, 2018 at 8:57 pm
We talk so much about BOND SCAM report and forget the other 33 REPORTS!!! Why?
ALL CROOKS must be punished.
January 3rd, 2018 at 9:23 pm
Namal tried the same trick when MR was in power. He approached the BOC chairman with the same mob (PT ltd) to do the same trick and in this case BOC chairman who is a respected businessman refused Namal’s request for funds.. My advise for the chairman is to resign immediately which he did so.. He got impeccable credentials when it come to dealing with this kind of a scenario..
I have a feeling this bond scam was going on for a while and present govt or the president should look in to the Bond dealings for at least from year 2000 onwards.
Worst point of all these is Central Bank Governor Arjun Mahendran is not qualified for the job even as a deputy… This is SL’s curse since they all hire the wrong uneducated filth and get the country in to trouble or debt in this case. I was surprised this was not picked by the commission and this rogue, Anil should have impeached and should have thrown in jail since he has been doing these kind of scenarios using proxies and this time he got caught with his pants down.
EPF and other pension funds should have strict financial guidelines for investments and should be taken out from the polls… MR also put his fingers here.
This is why audit commission was diluted and this started long time ago so that ponies will steal money from these funds.
Ravi should be in jail and also they need to look into his ltte money laundering issue since AG, deliberately charged him under a different act knowing he will be off.. What a bunch of crooks running the law and order. AG’s dept in politicised and need to be fully independent.
January 3rd, 2018 at 10:30 pm
Agreed.. All crooks must be punished including My3, Run-nil and the yahap team and MR and others from the previous regime if proven from the other 33 Reports. No one has the right to loot the country.
At the same time, like in India, those who are planning to divide this country should be punished and put behind the bars as well.
Once all the crooks and opportunistic politicians are behind the bars (including cunning mad old man Viggie), country will prosper. All the communities will live peacefully.
January 4th, 2018 at 4:10 am
Lorenzo Your Sirisena propaganda will not work this time. People know that Sirisena is under Ranil’s thumb he cannot do any thing to upset Ranil. It seems he has gone back on his speech and rectifying his mistake of refering to what the Commission report had said about Ravi and Ranil. The Commission report will come to nothing.Ranil will do some thing for the people to forget about it and Sirisena will be making speeches to paint Ranil white to Make him Mr. Clean and insist in bringng pressure on President Mahinda Rajapakse with appointing another commission to investigate Central Bank activities from 2008 to 2014. That must be the plan of the RAW and the MI5-You should know.
January 4th, 2018 at 4:26 am
Charles,
There is no Sirisena propaganda. Sirisena’s SLFP is going to LOSE like dogs because MR divided the SLFP. NO AMOUNT of propaganda can save SLFP.
But I PRAISE the good work of ANYONE. I’m not spiteful (kuaka-kama in Singhala).
A patriot will NEVER allow ANYONE to ROB MOTHER LANKA. Winning the war does NOT give anyone a license to ROB SL.
As an anti-UNPer you must be very happy with what Sirisena has done! But you are not. Is it because of the other 33 reports?
January 4th, 2018 at 4:29 am
Lorenzo says : It does NOT matter if it serves My3’s interests or not. He has done the RIGHT thing. All patriots must HAIL the president for this.
Appointing Commissions is President Sirisena’s favourite pass time. But he is slow in taking action interms of the Commission Reports. If he is to take action on the Commission Report he should ask both Ranil and Ravi to resign and appoint another Prime Minister immediately.
Perhaps he should appoint Mahinda Rajapakse as Prime Minister and bring the SLFP together and end the present mess into which Ranil has put the country.
Lorenzo tell that to your boss.
Read comment by Cerberus. He is serious. He does not make unnecessary comments.
January 4th, 2018 at 4:38 am
President Mahinda Rajapakse has not robbed any thing. It is only Ranil’s propaganda as advised by the RAW and MI5. They have been doing nothing to develop the country for the last three years except trying in vain to accuse and bring toTribunal President Mahinda Rajapakse and those arround him. They will continue that only activity of theirs for the next two years. In the mean time the country will become poor, undevelopped and perhaps with a resurgence of terrorism as it had been before 2005.
January 4th, 2018 at 4:42 am
RAW agents don’t use Portuguese names. They shed even their father’s Portuguese surname!
RAW agents don’t OPPOSE 13 amendment. They GUARD it like a treasure!
RAW agents can be found in PRO-ENDIA websites like Colombo Telegraph, etc.
RAW agents surround MR NOT My3. They are living like kings (not in hiding).
January 4th, 2018 at 4:46 am
I didn’t say MR robbed anything!
But MR had some OPPORTUNISTIC FRIENDS after the war. They ROBBED everything they could. Now they have LEFT MR (a few are still with him to PASS INFORMATION to My3). Don’t trust MOST SLFP MPs with MR. They pass information to My3. They too have families to feed. Vasu is another very close friend of My3 (and Viggie).
January 4th, 2018 at 5:02 am
Lorenzo Secret Agents work in strange ways they are invisible as secret Agents but see them as patriots and philanthropists as well.
January 4th, 2018 at 9:31 am
Great questions, Cerberus! Hopefully we will get some answers, if not from RW, from others in the know, as more and more people start questioning the 2 leaders RW and MY3 on these lines. I for one have grave misgivings and see this entire Scam as a well conceived affair with the heads of state involved directly in the plotting, and the timing of the Report’s disclosure intended to stirring a diversion designed for the upcoming LG elections which had kept on being postponed. Knowing RW’s penchant for malicious glee he must be in high spirits watching the people of Lanka being taken for a great big ride. MY3 is Ranil’s man and will NEVER do the necessary that any self-respecting Head of State should do to have this “plotter” of nation dismemberment forced to resign, or thrown out via impeachment .
The entire lot is in cahouts to rob the country and the working people of their pension monies. That is the gist of it all. MY3 is full of empty words of fury at the main players of this scam, and his well rehearsed words are only meant to soothe the gullible.
January 4th, 2018 at 5:50 pm
Charles, you seem to know about SPIES a lot. The ONLY known RAW agent is with MR. You know his name. Hint – he was behind 13 amendment, Perumal, Premadasa and MR. He is NO philanthropist.
January 5th, 2018 at 3:32 am
Ever since Ranil being appointed by Sirisena overlooking parliamentary protocols, all what he has done are to make Sri Lanka a failed state. This is the objective of the Western Christian nations. Only way to subjugate Sri Lanka and Sinhala Buddhists and to bring them under the suzerainty of the west is to make them paupers. This is what he started – denying the farmers their fertilizer denying them a correct price for their produce, stopping of all development activities, selling of state assets, bringing disrepute to Sri Lanka as a whole on all financial and monetary indices and making Sri Lanka again open to the LTTE terrorists and their sympathizers. The objective of bringing Jadapalanaya with a vain creature such as Sirisena in the guise of President of the country was to administer the agenda of the Christian West.
Now even after getting caught with his pants down on the Bond Scam / Robbery the biggest in the history of Sri Lanka and perhaps in the whole of Asia, he does not have the decency to call it quits. If he was the “Mr Clean” as some idiots seem to believe or if he has an iota of self-respect he would have resigned on 27 Feb 2015 the day the Bond Scam saw daylight. From that day onwards all his actions were to exonerate the thieves – whose identities are no longer secret. Now that the idiotic daylight robbery is all exposed, he nor his fellow thieves do not even have fig leaves to hide behind.
However, Ranil is still required by the Christian West and the Christians and other low lives in Colombo and their bootlickers in the rest of the country for their benefit alone. This is the reason he was entrenched in the UNP for the last nearly 3 decades, and this is the reason they will all rally behind to keep him in office.
If Sirisena is not a spineless guttersnipe he should rise up to the occasion and fire Ranil from his post as the Prime Minister of Sri Lanka. Today I listened to the media discussion when somebody tried to paint him as a lion for stammering out a statement after receiving the Commission of Inquiry Report. He is simply a stick in the mud that inclines in the direction it is pushed. He was pushed by the media and that is how the CoI came about. Now he is trying to get credit for it. He thinks he was voted in by a majority in Sri Lanka 6.2 Million. He should know that these votes are not all democratic votes, but rather minority racist and jihadist votes which are block votes of those inimical to the existence of Sri Lanka as we know her. He is simply a self-serving individual totally devoid of any self-respect willing to do the bidding of any who will subscribe to keep him in office as the President of Sri Lanka, a position he couldn’t even have dreamt of ever!
What is most strange is the silence of the United Opposition except for little musings here and there. Bond Scam and the resulting impoverishment of the Sri Lankans is the main theme that they must take to the people of Sri Lanka at the Local Government elections.
Twenty-Two Million Sri Lankans who are impoverished to the tune of Rs 30,000 each by the Bond Scam should be brought to the streets till Ranil Wikkamasinghe and his cohorts are expelled forever from the politics of Sri Lanka!
SIRISENA TOO SHOULD BE ARRAIGNED FOR CRIMES AGAINST THE SRI LANKAN PEOPLE SINCE HIS COMING INTO OFFICE AS A RESULT OF CHRISTIAN WEST / INDIA BACKED REGIME CHANGE.