KAMALIKA  PIERIS

CID had been directed by the Commission of Inquiry, to probe links between Aloysius and the MPs who had added footnotes to the  COPE report on the Treasury bond scam. The investigation, conducted by the Criminal Investigation Department (CID), showed a spate of telephone conversations between Arjun Aloysius and some members of the COPE team that probed the bond scams. There were 227 with Sujeewa Senasinghe, 176 with Harshana Rajakaruna, 73 with Hector Appuhamy and 18   with Dayasiri Jayasekara.    Some at least, of these calls,   were taken during the COPE hearings.

The CID informed the Commission of inquiry that Deputy Minister Sujeewa Senasinghe had had the highest number of telephone conversations with Aloysius during the period under investigation. The total number of telephone calls to and from Senasinghe to Aloysius between the periods July 4, 2015 to March 3, 2017, which coincided with COPE sessions,  was 227. Sujeewa Senasinghe had been put onto to the COPE team probing the alleged Central Bank bond scam when Velu Kumar resigned on July 5, 2016. 63 of the calls were during his tenure as a member of the COPE team probing Aloysius.

Sujeewa Senasinghe immediately called a news conference. He said he spoke to Aloysius to obtain information on the book he was writing on the Bond scam. ‘I did not have the information and therefore got details from Arjuna Mahendran and other officials. Is it wrong that I spoke to Aloysius? Aloysius is not an accused anywhere. After the second COPE was set up, I never spoke to him,’ announced Senasinghe.

Sujeewa did not explain, however, why he felt impelled to write a book on the subject whist being a member of COPE, said critics.  It was pointed out also that his book Maha Bankuwe Badhumkara Nikuthuwe Attha Nattha,” was published in 2015. The telephone records  produced by the CID took place during the COPE sittings,  6th May to 28th October 2016. These 62 calls were made one year after his bond book was published.

SLFP MP D. V. Chanaka had asked Sujeewa in Parliament,  whether Sujeewa  can tell the House what he spoke to Aloysius about. Sujeewa replied Merely because we are on the COPE Committee, why cannot we talk to a private person? Tell me a legal reason. Aloysius has not been made an accused. And if I need to get some information from him, why cannot I talk to him?

D.V.Chanaka read from the Senasinghe book on the bond issue. If you have something to buy and if your uncle has a shop, and if that item is available for sale at your uncle’s shop and if you purchase that item from your uncle’s shop in the normal course of trade, then who, in his right mind, can say the transaction was based on family relationship?” D.V. Chanaka then asked Sujeewa, Do you think that this is a case of  a person going to his father in law’s shop and buying a loaf of bread?

Sujeewa Senasinghe   had  also accepted money from Aloysius. He had  accepted three cheques to the tune of Rs. 3 million from W. M. Mendis & Company, belonging to Arjun Aloysius. The first cheque  was for one million rupees, issued from W. M. Mendis Company, a Bank of Ceylon account, to Senasinghe was dated August 24, 2015. The cheque was cashed by Ministerial Security Division (MSD and the money handed over to one of Senasinghe’s aides.

The second cheque also for one million rupees,  was issued on Nov. 12, 2015 from the same account. It  was cashed by Ministerial Security Division (MSD) . It was said by Senasinghe’s campaign team that the  money was spent on the election campaign. They did not know who gave the cheques. However, there was no election at that time. The third one-million-rupee cheque was issued on March 31, 2016 from the same account

There Finance Minister Ravi Karunanayake’s name came up frequently, although he himself denied any special relationship” with    Aloysius,  said Namini Wijedasa. Ravi Karunanayake’s name had come up frequently  in the investigation that Namini had conducted.   The CID   found 387 calls between Finance Minister Ravi Karunanayake and  Arjun Aloysius. You are linked with the Mahendra family , Ravi was told. This is ludicrous, replied Ravi. We have been family friends for years.  His son-in-law and my grandfather were known to each other. (sic)The family are also good friends of Premier Wickremesinghe.

Finance Minister Ravi Karunanayake had at been at a meeting of CEOs of Primary dealers  in March 2015. This  was unprecedented, said Bank officials. Former Deputy Governor of the Central Bank, Ananda Silva,  said he had been informed  on February 26, the day before the  Bond auction that  a meeting would be held at the Central Bank cafeteria   on the 26^th attended by three powerful ministers of the government and he had been asked to attend.

Those present at the meeting chaired by Arjuna Mahendran had  included  Ministers Ravi Karunanayake, Kabir Hashim and Malik Samarawickrama, Finance Ministry Secretary Dr Samaratunge and some officers of the Road Development Authority. The discussion  was on obtaining funds for some road development projects. It was most unusual for politicians to visit the Central Bank and participate in meetings in this manner. The practice was for CB officials to visit the respective ministries and hold discussions with the senior officers or ministers, Silva said.

 Chairmen and senior officials of three major state banks, Bank of Ceylon, the People’s Bank and the National Savings Bank, testifying before the presidential commission of inquiry probing the bond scams  said that on two occasions in 2016,  Finance Minister Ravi Karunanayake had instructed them to make bids at the treasury bond auctions held on March 28, 2016 and March 30,2016, at lower interest (yield) rates. Prime Minister Ranil Wickremesinghe’s Senior Advisor R. Paskaralingam had also been present .As a  result, their institutions had been deprived of an opportunity to make substantial profits.

General Manager of the People’s Bank N. Wasantha Kumara said it was the first time in the country’s history that a finance minister had asked the state banks to bid for treasury bonds at lower interest rates. In answer to a question why the state banks had carried out Karunanayake’s instructions, Hemasiri Fernando of Peoples bank, said the state banks belonged to the Treasury and therefore they had to abide by those instructions. Karunanayake was the line minister therefore they had followed instructions.

The senior officials of the three banks also said that though they had followed the instructions given by Minister Ravi Karunanayake, the latter had failed to honour his promise that the Central Bank would not accept bids at rates higher than the yield rate range he had mentioned to them.

Perpetual Treasuries it  was said,  had   two ‘Things to Do files’ . one   for father in law, Arjuna Mahendran the other for   Ranil Wickremasinghe  . From the beginning, we have repeatedly said Prime Minister Ranil Wickremesinghe is responsible for the bond scams and it happened with is blessings and instructions. Now, his involvement has been proved and he should resign at-least now,” MP Aluthgamage said. there has been enough of evidence before the Commission against those responsible and now it was time to take legal action against them.” Derana news  of 4.1.18 aired the  statement  Ranil must resign.  He appointed Mahendran”.

Business Times (BT)  did an opinion poll on the bond scam in January 2018.  The survey, conducted over just 10 hours, attracted a wide response from a cross-section of people including company directors, public officials, social activists and students. It reflected the public’s anxiety to ascertain the findings of the Commission whose widely-publicized proceedings itself attracted a lot of attention amongst scandalous profit-making by  Perpetual Treasuries. (PTL)

In a quick BT survey through email 82 per cent of the respondents said  Bond Commission’s findings is a fair and independent view of corrupt deals in the disputed bond trades.  a resounding 99 per cent said Yes” when asked whether strong action should be taken against those named in the report as being involved in the corrupt deals, while 90 per cent agreed that the report should be speedily released to the public.

asked whether the Government will definitely take action against the accused persons”, 53 per cent responded with Undecided,” 26 per cent said No” and 21 per cent said Yes”.  Some respondents who did their own polls on a Twitter account found the same result. people are not convinced that the government would take action.

The Commission seems to be too lenient in its statements on the PM’s role, respondent said. The politician mentioned (in the report) will be let off. So will the head of the bank. The rest of the guys named will be punished then bailed out,” said another disappointed respondent people are not convinced that the government would take action. Given the poor track record of this Government in its action against the so-called crooks” of the last regime, taking action” is a debatable point.

There could be some legal hurdles. Can a court of law pass judgment on the basis of the findings of a Commission? Unlikely. So the AG’s Department will have to prove fresh cases against each of the accused. The government may go through the motions for appearances sake, but the chances of all parties being adequately punished are slim, said respondents.

Yahapalana as usual, tried to put the blame on the Rajapaksa regime. There have been issues over bond transactions since 2007/2008 period. Nobody spoke of them,” said President Sirisena in 2017. investigations should cover a ten-year period of bond issues by the CBSL.

Prime Minister Ranil Wickremasinghe  said that bond sales had been made from 2008 to 2014 on private placements without informing the Monetary Board of the Central Bank or Parliament.  90 percent of these had been done on private placements using EPF, ETF and National Savings Bank funds. ”  Ranil Wickremasinghe announced that  the government would launch a special probe into bond sales related issues from 2008 to 2014 to the tune of Rs 5,147,751,210,000. 

Ajit Nivard Cabraal replied these allegations. My attention is drawn to the statement made by President Sirisena on 3rd January 2018, on the Report of the Presidential Commission of Inquiry. In his statement, it is said, inter alia, that the “Commission is of the opinion that similar incidents as revealed in the Commission Report had happened even in 2008. The Commission recommends that the Central Bank of Sri Lanka 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 he did not see  any references to improper Bond issues of 2008 to 2014, emerging in the Commissions proceedings. however, if President Sirisena wishes to ascertain for himself as to whether there have been “fraud and corrupt practices from 2008” and whether such practices had caused losses to the government he has only to refer to the Auditor General’s Special Examination Report.

Cabraal observed that Prime Minister Ranil Wickremasinghe in Parliament referred to the time-tested and highly-effective “auction cum direct-placement” method of issuing Treasury Bills and Bonds as a corrupt and un-regulated “private placement” system and   said that massive frauds took place  in  the Rajapaksa period  due to this method.

Cabraal replied, the “auction cum direct placement” system that was in place from 1997 up to 27th February 2015 enabled the Central Bank to obtain the best possible interest rates and consequently borrow at the least cost to the Government. That system also ensured that no undue advantage was enjoyed by any primary dealer, since all dealers were required to invest in the Government Securities at around the prevailing market yield curve. Accordingly, this time-tested, transparent and well-thought-out system (contrary to the baseless allegations of the Prime Minister), enabled the Government to issue Treasury Bills and Bonds through the Central Bank without any substantiated allegations of fraud and/or misconduct and/or major controversy for over 18 years!

Cabraal said that at the invitation of the Bond Commission, on 25th October 2017, he  submitted a comprehensive assessment of the loss suffered by the Bond scam, which places the direct loss to the Government,  (using Auditor general’s data), at Rs.1,674 million, and the loss due to the increase in the interest burden of the Government as a result of the unnecessary and unwarranted increase in interest rates at Rs. 144,598 million. In addition, there is also the loss suffered by the general public due to the increase in interest rates, losses suffered by the economy due to the erosion of confidence as a result of the bond scam, as well as the losses suffered by the EPF and other Government institutions.

in response to President Sirisena’s comments about the Treasury Bond issues from 2008 to 2014, former President Mahinda Rajapaksa has already stated that he would welcome a forensic audit on the bond issues pertaining to the period of the UPFA government. In like manner, I would also welcome any examination or investigation in order that the suspicions raised by the Prime Minister relating to the bond issues during the period that President Sirisena himself was a senior Cabinet Minister, could be either confirmed or dismissed.

 Lastly, Cabraal pointed out that  Perpetual Treasuries  did not rob  money from the EPF and other government institutions at gunpoint or by breaking their safes. These institutions willingly handed over funds to PTL  in return for personal benefit. In such a case, aren’t they the real culprits who caused losses to the government?

I believe the existing laws are adequate to prosecute them if the government has the will.PTL was able to make this enormous profits only because of the help it got from insiders in these government institutions, who probably were well compensated. It was a game played by PTL together with insider in these government institutions to siphon off public funds. Therefore, without pointing the finger at PTL alone, authorities should immediately prosecute the relevant officials in these other institutions for aiding and abetting PTL for robbing them. They should also be made liable to pay back the money they earned through these transactions.( continued)