Posted on February 10th, 2020


Central Bank bond scam has been in news media of Sri Lanka since 2015 and when I was watching TV programs on this matter I had a feeling that it has been used by many people in the country to mislead public who haven’t clear understanding about the dealing and some TV presenters and the participants of TV programs were groping in the dark without clearly identifying the issues relating to the case and how the issues breached the prevailing laws and accepted financial procedures of the country.  I also had a reasonable doubt whether a television company has taken a bribe from Mr. Arjun Aloysius and broadcasts TV programs to mislead the public.  If it could prove the TV company might responsible for criminal liabilities. I am writing this article purely based on the right to express an opinion, which is recognized in Sri Lanka. 

It is required to identify main issues relating to the case which clearly show the breach of law and trust of the public. I have not seen the forensic audit report and contents in the report either, and the contents of the report are not aware of the public.  According to my understanding the case involved in a range of acts, which breached the Criminal Law and Administrative Law of Sri Lanka. I feel that identifying the issues point by point is important to the public as they have no proper understanding of the case.

•          Borrowing funds to the government at a higher rate of interest than the remaining rate at the market was cheating and with a malice motive because the additional expenditure to the government will go to someone’s pocket.  It is already revealed that who got the additional expenditure to incur to the government and it is quite clear that decision-makers to brow funds at a higher rate were guilty of cheating the government. In simple terms, if the control price of one measure of rice is Rs 85 and anyone buys more than Rs 85 it means that it is cheating the consumers.  Who made this decision and the purpose of the decision-maker were forensically vital and did forensic auditors concerned on this fundamental issue relating to the bond scam and has it mentioned and written in the report? Many persons who were analyzing the bond scam in the media did not mention this fundamental issue and the consequences of the issue.  The consequences of the borrowing action would broader and it will go to the future.

•          Who made the borrowing decision to obtain funds at a higher rate and had the person who decided to take such a borrowing knew about the breach of law in terms of criminal and administrative law of Sri Lanka?  Mr. Ranil Wickremasinghe as a graduate of law and Mr. Arjun Mahendran as a graduate of philosophy and the experienced banker would have known they were making decisions contrary to the law.  According to the administrative law of Sri Lanka, public officers have the power to make administrative decisions if such decisions were within four corners and the decision should have beneficial to the public. If it was not within these conditions, they would have treated as ultra-virus decisions. The possible consequences of the decisions are broader and it has no benefits to the public despite the public or the government has to supper for a longer period. Who did the borrowing decision and how such a decision will negatively impact the public?  Did forensic auditors calculate the possible negative impact to the government? What were the supporting points of decision-makers when they were making an ultra-virus decision?  The information should have recorded in the minutes of the Monetary Board.  Minutes of the meeting of the monetary board of the central bank should have been recorded the explanations and the public has no understanding of what was mentioned in the minutes of the meeting. If neither Mr. Arjuna Mahendran and Mr. Ranil Wickremasinghe believe that they are not guilty of the decision they should come forward and explain to the public.  Despite Mr. Arjuna Mahendran is hiding in Singapore and Mr. Ranil Wickremasinghe is silent. The behavior of Mr. Arjuna Mahendran and Mr. Ranil Wickremasinghe proves that they have accepted the guilty of wrongdoing.  This information is most probably enough to have an ex-pate trial against both Mr. Arjuna Mahendran and Mr. Ranil Wickremasinghe.

•          The information relating to the Central Bank Bond scam doesn’t provide clear evidence to the public who decided to borrow funds at a higher rate than the market rate, either by Mr. Arjuna Mahendran, the governor of the Central Bank or Mr. Ranil Wickremasinghe, Honourable Prime Minister or both were together is not clear to the public.  If Mr. Arjuna Mahendran took the decision, the procedure was that the decision should have been informed to the monetary Board and get the covering approval. When Mr. JR Jayewardene was president of Sri Lanka wanted to obtain his travel allowance for the US $ 1000, which was an amount higher than the regulation and I referred to the governor of the central bank and obtained the approval over the phone and later obtained covering approval from the governor in writing.  In this way, Mr. Arjuna Mahendran should have reported to the Monetary Board and obtain approval.  Did forensic auditors investigate this matter?  It is not clear to the public.  If Mr.  Ranil Wickremesinghe, the prime minister took the decision he should have got the approval from the cabinet (Executive) and later the approval for the executive decision from the legislature (parliament).  According to the information available to the public, it seems that there was a clear breach of procedures which amounted to cheat public funds and criminal breach of trust.

•          As the information is given to the public, there was a breach of criminal law and civil (breach of administrative law). The punishment for the criminal breach may be jail terms while the breach of civil law will be indemnifying the loss incurred to the government.

•          The purpose of the forensic audit was to identify supportive information for litigation of responsible persons and the volume of money involved in the two areas, but the public has no information about the forensic audit results and it seems that TV programs on this matter are misleading the public or attempt to coverup.

•          What was the purpose of borrowing money and how did use borrowed money were other aspects that should have investigated by a forensic audit? If money misappropriated without using for the purpose who got the real benefits out of funds.  As people understand a part of the money was distributed to candidates of UNP in the 2015 general election and can the ruling party use the government funds for election expenses? Who were the UNP candidates used funds and they also guilty of misappropriation of government funds? The public was not given information about this.  According to criminal law provisions, the members of the parliament who got the benefits from borrowed funds are guilty and they also should a part of the trial. 

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