{"id":42115,"date":"2015-03-08T17:09:40","date_gmt":"2015-03-08T23:09:40","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=42115"},"modified":"2015-03-08T09:11:17","modified_gmt":"2015-03-08T16:11:17","slug":"central-bank-blues-greens","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2015\/03\/08\/central-bank-blues-greens\/","title":{"rendered":"Central Bank Blues (greens?)"},"content":{"rendered":"

BY MALINDA SENEVIRATNE<\/em><\/span><\/h2>\n\n\n\n\n
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When son-in-law makes a killing on moves made by papa-in-law, it’s fishy. \u00a0Arjuna Mahendran is on the spot and he cannot pass judgment on himself or his son-in-law.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Financial irregularity was one of the many charges leveled at the Mahinda Rajapaksa regime.\u00a0 The \u2018rot\u2019 so to speak began at the top, according to critics.\u00a0 It was and still is argued that this state of affairs is a direct or indirect product of a system of governance marked by centralization of power following the dictum \u2018power corrupts, absolute power corrupts absolutely\u2019.<\/p>\n

Maithripala Sirisena\u2019s campaign theme, naturally, was good governance.\u00a0 Promises were made to correct institutional flaws, bring to book miscreants and ensure things like transparency and accountability.\u00a0 Professionalism would replace political patronage, the people were told.<\/p>\n

Today, with President Sirisena in effect having transferred his mandate to Ranil Wickremesinghe and conceded (in effect) executive powers to a party with minority representation in Parliament, the political equation is marked by instability.\u00a0 The Sri Lanka Freedom Party has more MPs than the United National Party. The reform project is at odds with the prerogatives of political expedience with the two major parties engaged in intense brinkmanship.<\/p>\n

It is in this context that stability, professionalism and squeaky clean operations at the high temples of financial management are imperative.\u00a0 Politicians will quibble; that\u2019s a given.\u00a0 The economy must be on a strong footing with robust rules and regulations to eliminate irregularities of the kind the current dispensation accused its predecessors of indulging and indulging in.<\/p>\n

It was hoped that the \u2018bad\u2019 were not only swept out, the \u2018good\u2019 replaced them.\u00a0 Today, there are questions about \u2018the good\u2019.<\/p>\n

The Governor of the Central Bank Arjuna Mahendran made a promise.\u00a0 He said that the Government would offer a detailed response to allegations that a firm connected to him through his son-in-law Arjun Aloysius may have used \u2018advanced knowledge\u2019 to profit from the bond issue.\u00a0 The Government, however, did not respond.<\/p>\n

The Deputy Minister of Policy Planning and Economic Development offered an elaborate \u2018explanation\u2019 drawing from theories regarding interest rates, but studiously avoided the issue of insider trading, an issue which his party had routinely charged the previous government of encouraging.<\/p>\n

The issue here is that controversial deals were made over the past week by Perpetual Treasuries, a firm connected Aloysius.\u00a0 Perpetual Treasuries is a\u00a0fully\u00a0owned subsidiary\u00a0<\/em>of\u00a0Perpetual Asset Management whose parent company is\u00a0Perpetual Capital Pvt Ltd, a family run company with Arjun Aloysius functioning as its Chief Executive Office\/Director.<\/p>\n

Mahendran claimed that Aloysius had resigned from Perpetual before he, Mahendran, took up the post.\u00a0 But why speak of resignation and appointment in the same breath? After all, Perpetual is a legal entity and there\u2019s no legal requirement for Aloysius to give up a lucrative business just because a relative got a job, surely?<\/p>\n

Mahendran, had information which in the hands of a \u2018dealer\u2019 would be extremely valuable and moreover \u2018convertible\u2019 into billions of rupees.\u00a0 That conversion was made.\u00a0 Among the beneficiaries was a company that stands accused of involvement in controversial stock market deals with the Employees Provident Fund (EPF) during the previous regime, deals which were heavily criticized by several individuals who are now ministers and deputy ministers.<\/p>\n

The question that arises then is not whether Aloysius should have resigned but whether Mahendran should have been appointed in the first place.\u00a0 The Government ought to have known that appointing as Governor the father-in-law of a man involved in what was deemed \u2018irregular\u2019 was bound to stir controversy.\u00a0 Well, it has certainly hit the fan, as they say.<\/p>\n

The new Government doesn\u2019t have it easy what with deadlines set and lots of things on its to-do list yet to be done.\u00a0 It cannot afford this kind of distraction.\u00a0 It can score in terms of commitment if swift action is taken in this matter.<\/p>\n

Harsha De Silva has promised an investigation.\u00a0 This is a welcome move.\u00a0 Mahendran can help in giving credence to such an investigation by stepping down.<\/p>\n

That will not only clear all doubt about the Government\u2019s good intentions, it will considerably boost the UNP\u2019s stocks among the voters.\u00a0 Ranil Wickremesinghe doesn\u2019t hold all the political aces, but that does not stop him from sorting this issue.\u00a0 In fact it might get him the extra trumps he desperately needs at this point.<\/p>\n

As things stand, inaction, pooh-poohing and\/or artfully dodging the issue will only give credence to the view that wrongdoing continues to thrive even after the \u2018wrongdoers\u2019 were \u2018sent home\u2019.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

BY MALINDA SENEVIRATNE When son-in-law makes a killing on moves made by papa-in-law, it’s fishy. \u00a0Arjuna Mahendran is on the spot and he cannot pass judgment on himself or his son-in-law. Financial irregularity was one of the many charges leveled at the Mahinda Rajapaksa regime.\u00a0 The \u2018rot\u2019 so to speak began at the top, according […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[75],"tags":[],"class_list":["post-42115","post","type-post","status-publish","format-standard","hentry","category-malinda-seneviratne"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/42115","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=42115"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/42115\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=42115"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=42115"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=42115"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}