Courtesy The Island

January 6, 2018, 7:46 pm

Former Central Bank Governor Ajith Nivard Cabraal yesterday said that Treasury Bond issues from 2008 to 20014 have “already been closely examined by the Auditor General (AG) in response to a request made Aug. 19, 2016, by then Finance Minister Ravi Karunanayake under section 43(2) of the Monetary Law Act.”

He was responding to President Maithripala Sirisena’s statement last week that the Bond Commission had recommended that the Central Bank “should first conduct a forensic audit with regard to the alleged fraud and corrupt practices from 2008 and based on such findings legal steps should be taken.” Cabraal said that the AG’s report dated Jan. 16, 2017, based on such examination has been submitted to the finance minister and is also available on the website of the AG.

“If therefore, President Sirisena wishes to ascertain for himself as to whether there has been ‘fraud and corrupt practices from 2008’ and whether ‘such practices had caused losses to government because of similar incidents as revealed in the Commission Report’ he has only to refer to the Auditor General’s Special Examination Report,” Cabraal said.

He said that he had diligently followed the Bond Commission proceedings but had not seen any media reports reporting any specific evidence placed before the commission indicating impropriety in the issue of bonds during the period 2008-2014.

“However, there is of course the instance where Prime Minister Ranil Wickremesinghe made a much-publicized but unsubstantiated allegation in Parliament on Mar. 17, 2015, wherein he (in my view, deliberately and mischievously) referred to the time-tested and highly effective ‘auction cum direct placement’ method of issuing Treasury Bills and Bonds as a corrupt and unregulated ‘private placement’ system, while alleging that massive frauds took place during that time as a result of such corrupt practice,” Cabraal said.

He further said that it has now been revealed that “this time-tested method of issuing/selling Treasury Bills and Bonds was inexplicably, arbitrarily and suddenly changed into an ‘auction only’ system, on the instructions of PM Wickremesinghe by Governor Mahendran, thereby making one of the most costly and damaging political interferences in the history of our nation.

“That change also enabled the biggest scam in the history of our nation to be carried out, while also creating a steep spike in the interest rates paid by the government for all Treasury Bills and Bonds by over an incredible 2%, enhancing interest rates across the entire economy, and causing a series of setbacks and losses throughout our economy.”

Cabraal concluded by making a references to Australian press reports that the well known Snowy Mountains Engineering Company’s overseas staff had won an AUD 2.3 million dollar aid-funded sewerage project in Sri Lanka in 2011, by bribing a named senior minister of the Sri Lanka cabinet and his advisor with a political “donation.”

“Considering the deep commitment displayed by President Sirisena toward good governance, I am confident that he would initiate a serious and independent investigation so as to ascertain whether there is any truth in the allegation reported in the Sydney Morning Herald. I am equally optimistic that the present UNP-SLFP ‘Yahapalanaya’ joint government would pursue such a course of action with great enthusiasm, since that would be totally consistent with their unwavering values of good governance”, Cabraal said.