Bailout Probe

May 08, 2007 (LBO) — Sri Lanka has appointed a special presidential commission to probe finance companies that went bust in the past, after the country’s top whistle-blower found fault with monetary authorities for not recovering large amounts due to the state.

Sri Lankan President Mahinda Rajapakse has picked justice Priyantha Perera to head the commission which also includes lawyer Faisz Mustapha, banker Eastman Narangoda and the head of the accounting watchdog Ajith Ratnayake.

The head of the parliamentary Committee on Public Enterprises, or COPE rapped the Central Bank last year for not monitoring financial institutions properly and failing to take action against illegal finance companies.

Perera and his team have been tasked with the responsibility to examine individual conduct of central bank officials who overlooked non-banking financial institutions from 1991-2005, secretary to the presidential commission, Nandani Dissanayake said.

The commission has to recommend steps to be taken against such officials and suggest methods to recover funds from failed finance companies, she said but declined to say how many finance companies went bust.

The committee has to also suggest actions that could be taken against the directors of failed c