Editorial Courtesy The Island

We waited, with bated breath, for a pulse-pounding, earth-shattering revelation on Wednesday. But, President Maithripala Sirisena only read out a statement, selectively disclosing some of the recommendations made by the Presidential Commission of Inquiry (PCoI), which probed the Treasury bond scams. However, he, credit where credit is due, has at least done that much unlike his immediate predecessor, Mahinda Rajapaksa, who swallowed presidential probe committee reports whole and flashed grins like a Cheshire cat.

President Sirisena revealed that the PCoI had recommended criminal and civil action against former Governor of the Central Bank of Sri Lanka (CBSL) Arjuna Mahendran, his son-in-law and owner of Perpetual Treasuries Arjun Aloysius, former Finance Minister Ravi Karunanayake et al. We were also told that action would be taken to introduce new laws to recover the losses caused to the Employees’ Provident Fund, the Mahapola Scholarship Fund, the NSB etc.

The PCoI recommendations, as revealed by President Sirisena, are most welcome. However, what the President has done by way of a presidential commission probe is akin to reinventing the wheel. For, a similar course of action was recommended by the Attorney General’s (AG’s) Department way back on June 30, 2015. We pointed out, in this space, on August 2, 2017, while the bond probe commission proceedings were still on, that no probe into the racket would be complete without an investigation into the AG’s Department file which had been either shelved or made to disappear.

On June 30, 2015, the CID handed over a file (No: C/187/161/2015) on the first bond scam to the AG’s Department, during the tenure of Attorney General Yuwanjana Wijethilake. A senior official who happened to accept the file found a prima facie case of insider trading and market manipulation and duly opened a criminal file and handed it over to a counsel for further action. In the mean time, President Sirisena dissolved Parliament and held the August 2015 general election, thwarting an attempt by the COPE (Committee on Public Enterprises) headed by D. E. W. Gunasekera to place its report on the first bond scam before Parliament. A UNP-SLFP government was formed after the polls.

We revealed that, strangely, criminal action against the bond racketeers had been terminated by the AG’s Department and the file at issue turned into a confidential document (CF/08/2015), which was passed on to another senior counsel. In June 2016, that counsel had, acting within the parameters set by his superiors, recommended that civil action be taken against Perpetual Treasuries to recover funds, we revealed. The file has not been sighted ever since.

We called upon the PCoI to summon the incumbent AG and ask him what had become of the file and why criminal action as regards the first bond scam had been terminated. But, no such action was taken and the mystery remains unsolved. Will President Sirisena care to order an investigation with a view to tracing that vital document? If action had been taken against the bond racketeers on the basis of the AG’s Department recommendations in June 2015, the second bond scam (2016) which was far worse than the first one—like the second wave of the Boxing Day tsunami—could have been averted.

President Sirisena told the nation in the lead-up to the Aug. 2015 general election that he had wanted Mahendran removed as the CBSL Governor in view of serious allegations against the latter. He should explain why he baulked at brining adequate pressure to bear on the government to remove Mahendran, who was under a cloud. Can he deny that he succumbed to political expediency at the expense of good governance?

The PCoI has not found anything irregular as regards the appointment of Mahendran as CBSL Governor by Prime Minister Ranil Wickremesinghe, according to what the President told us on Wednesday. But, what about the PM’s all-out effort to re-appoint Mahendran as the CBSL Governor despite the availability of irrefutable evidence that the latter had been involved in the bond scams? It was the President’s intervention which put paid to the PM’s attempt. The President deserves praise for his bold decision which almost caused the collapse of the government. However, according to what the President revealed on Wednesday, it is not clear whether the PCoI has commented on the issue of the deplorable reappointment bid which dented the much-flaunted good governance credentials of the government irreparably. Has the PCoI chosen to ignore the vital issue completely?

The PCoI has suggested that the bond transactions during the period from 2008 and 2015, too, be probed. This is a welcome suggestion, but the government must not use such an investigation to obfuscate the issue at hand and delay action against the perpetrators of the mega bond scams in 2015 and 2016. It is imperative that the recommendations of the PCoI anent the scams it probed last year be implemented, first of all while a serious effort is made to bring the self-righteous politicians who masterminded the racket to justice.

Parliament must be summoned immediately and the new legislation as well as amendments to the existing laws, which the President promised on Wednesday, introduced as a national priority. This must be done before the LG polls. One shouldn’t be so naïve as to expect the ill-gotten wealth of the bond racketeers to be seized and the main culprits brought to justice. There is reason to believe that all the fraudulently acquired money has been taken out of the country. However, new laws are called for to enable the seizure of stolen funds because they will, at least, have a deterrent effect on other rogues of the same ilk. Besides, People have a right to know who will support the proposed course of legislative action to recover losses and who will not so that they can make an informed decision when they exercise their franchise on Feb. 10.

President Sirisena denied the public their right to know what the first COPE report on the Feb. 27, 2015 bond scam contained in time for the last general election. Voters were kept in the dark. The least the President can do to atone for that cardinal political sin, if at all, is to have the new laws and amendments drafted and Parliament summoned forthwith to pass them before the upcoming polls.

Meanwhile, a sine qua non of ensuring the success of the forensic audit, recommended by the PCoI, is to prevent the desperate racketeers from covering their tracks and trying to derail investigations. Let President Sirisena be urged to take over the CBSL immediately. A few moons ago, we reported that CBSL Deputy Governor P. Samarasiri, bracketed with Mahendran in the PCoI report, had removed a whole slew of files from the bank and security officers had been ordered not to stop him. The President must act fast if he is genuinely desirous of making the bond racketeers and their confederates in the CBSL pay for the biggest ever financial crime in the country. It is the moment of truth for the President, who wears his commitment to good governance on his sleeve. Now that he has talked the talk so eloquently, he has to walk the walk.