Sri Lanka’s PM says more to investigate on CB bond scam, a select committee to be appointed

Ranil Wickremesinghe

Aug 05, 2015 (LBO) –Sri Lanka’s Prime Minister Ranil Wickremesinghe said the government has done every possible investigation on the alleged bond scam, but will further investigate through appointing a parliamentary select committee and submit a report to the parliament after the election.

“What good governance means is that if there is an allegation you will investigate it, and have we done that or not in the case of the allegations that were made on central bank bond issue?” Wickremesinghe asked the audience of the Economic Summit 2015 held in Colombo, Tuesday.

“I won’t go on replying to the charges that were made. I think the parliament should decide on it. I have set down the procedure and we have done three investigations,”

“Earlier nothing was investigated in the Central Bank. We are continuing the criteria and the report would be done in a very professional manner.”

“So we have decided with all the parties which comes under United National Party to appoint a select committee and go ahead. All those who served in this select committee get re-elected and reserve in that committee and others are decided by party leaders, so that you can investigate this fully.”

Wickremesinghe said that the government policy for good governance was followed in investigating this bond issue.

The said bond was declared on the 27th February 2015 by Central Bank of Sri Lanka and carried accusations of insider trading which related to the bids of Perpetual Treasuries, a firm connected to Arjun Aloysius, the son-in-law of Governor Arjuna Mahendran.

Perpetual Capital group had been charged for controversial stock market deals with the Employees Provident Fund which have been questioned before.

“One allegation made that there was big loss because the interest rates had increased. We took a policy decision that there cannot be private placements unless urgent,”

“We have been criticizing it in the Parliament, asking why can’t you pay the market rate in the local markets for the rupees and end up paying the market rates for the foreign bond holders,” Wickremesinghe said.

He said the government must restructure its spending priorities, if it makes capital that much more expensive for the government.

“You can’t be having cheap money so that you can build palaces in Jaffna. No, we have to pay the market rates,”

“When I found out that Governor was not following it, I told him, look I want it done from the next day on-wards. So that is a policy decision.”

A three-member board was appointed by the Prime Minister to probe the alleged Treasury bond allegation when the issue arose and created havoc in the bond market.

However, the committee was accused of being biased to the ruling party.

Nevertheless, the committee had said in its report that there was no evidence to the effect that the Governor had direct participation with regard to the activities of the Public Debt Department and the Tender Board Committee.

However, the Committee has noted serious lapses on the part of the Bank of Ceylon through whom Perpetual Treasuries had routed an unusually large amount of bids for the 30-year bond.

“In the meantime some of the parties went to courts and made serious allegations which the court dismissed,” Wickremesinghe said.

“So in a situation in which the internal investigation says there is nothing against the Governor and the court has dismissed the case against the governor, can I ask where more we can go on this basis? Will you ask anyone to go ahead on that basis?”

A Committee on Public Enterprise (COPE) appointed a sub committee comprising 13 Government and Opposition legislators on May 22 this year to look into the controversial Central Bank Bond issue, following the Speaker’s ruling on a motion submitted by UPFA Parliamentarians seeking the dismissal of Central Bank Governor.

Chairman of the COPE committee was quoted as saying that the report could not be submitted to the Parliament due to the dismissal of Parliament by the President calling for an election.

However, Wickremesinghe says otherwise.

“They gathered evidence, the governor has given evidence. Previous governor and many others also had given evidence. However it was concluded without a report.”

“The chairman refused to call the members of the committee to submit the report,”

“There were further allegations to come to investigate relationship between perpetual treasuries and the central bank under the previous administration. So there was a big question as to whether information got out in many ways which the member of parliaments wanted to investigate,”

“Finally I had to be called to give evidence. So what more can I do?” he asked.