Bond Commission Report: Moment Of Truth For Country

By Amrit Muttukumaru –December 17 2017

The country is awaiting with a mix of excitement and trepidation the Report of the Presidential Commission of Inquiry (PCoI) into the alleged Treasury Bond Scam which will one way or another indicate whether there is hope for optimism for the future of the country. The report is crucial for reasons which include:

1) It has captured the popular imagination unlike no other scam in a country awash with scams under successive administrations since television in vivid colour and social media enhanced by good investigative reporting in the print media have brought its sordid details to even the humblest of homes. The people have drawn their own conclusion and if they sense there has been a ‘cover-up’ particularly of its masterminds it would further undermine the ‘rule of law’ which is a sine qua non for any meaningful socio-economic development.

2) Those who voted for the ‘Yahapalanaya’ government under trying circumstances to usher in ‘good governance’ after the traumatic Rajapaksa years feel betrayed and demand accountability. 

 

3) That Sri Lanka is an unreliable and unstable country where the ‘rule of law’ is not applied uniformly is well known to the outside world. Equally well known is its endemic corruption, social injustice and inability to address long festering minority issues. It is due to this that ethical FDIs are few and far between. In its place we have had some questionable proposals with alleged money laundering origin. The controversial Chinese and Indian investments are largely driven by geo-political consideration with the potential to destabilize the country. Any ‘cover-up’ will confirm the worst fears of the international community.

4) After nearly 70 years of independence the country has come to such a sorry pass that we have to suffer the ignominy of:

“The US State Department” reportedly fielding “a Resident Legal Advisor in Colombo to provide anti-corruption and asset recovery training and also support the Commission to Investigate Allegations of Bribery and Corruption (CIABOC)”

Does this not indicate we are near to being a ‘failed state’’?

In this context if the Report of the PCoI is not credible, will it not confirm this with all its implications? 

 

Have not some PCoI actions during the inquiry stage raised fears of what’s to come? 

Partiality?

Readers can decide for themselves whether or not the PCoI abandoned ‘DUE PROCESS’ for other witnesses by glaring PARTIALITY to one witness?

Core of Bond Scam:

1) ‘Conflict of interest’ arising from then Central Bank Governor Arjuna Mahendran’s son-in-law, Arjun Aloysius – owning/controlling PTL (Perpetual Treasuries Limited) – a Primary Dealer.

2) Arjuna Mahendran – a foreign national being handpicked for the position of Governor, CBSL by the Prime Minister although aware of the ‘Conflict of interest’. The PM himself confirmed this in his affidavit and while testifying before the PCoI.

3) The Central Bank of Sri Lanka (CBSL) the issuing agency for Treasury Bonds which normally falls under the Ministry of Finance being brought under the purview of the Prime Minister.

4) The PM continued to have Mahendran as CBSL Governor although he was aware that Mahendran had reneged on his ‘assurance’ to him that his son-in-law (Arjun Aloysius) will sever all links with PTL prior to his appointment as CBSL Governor.

5) The PM robustly defended and endorsed Mahendran for a second term despite the widespread perception of Mahendran’s role in the alleged Bond Scam.

6) Being fully confident on the propriety of the issuance of Bonds, the PM robustly defended the same in Parliament despite the evidence that subsequently transpired before the PCoI.

7) During his testimony at the Bond Commission the PM stated: “Mr. Aloysius did say to me he need bit of time to dispose his share holding to get good price. (shares of Perpetual Treasuries Ltd or shares he held in other entity in the name of PTL). I met him (Aloysius) at one or two parties, and there he told me that he was pursuing his interests in Mendis distilleries.”

What is at issue is the integrity of the Central Bank of Sri Lanka. How can the PM who is also responsible for the CBSL even consider a “bit of time” to resolve a ‘conflict of interest’ concerning the Governor and that too articulated “at one or two parties”?

Despite all this, did not the PCoI take some unusual decisions in regard to one witness?

1) Unlike in the case of other witnesses, the PM was given questions in advance by the PCoI to enable him to provide answers by way of affidavit.

2) Unlike in the case of other witnesses, the PCoI decided to invite the AG himself who wasn’t involved in the investigation up to that point to personally lead evidence for the first time. Up to this time, Messrs. Dappula de Livera and Yasantha Kodagoda – Senior Additional Solicitor General and Additional Solicitor General respectively lead evidence.

3) Unlike in the case of other witnesses which included former Finance Minister Ravi Karunanayake who were grilled by Messrs. Dappula de Livera and Yasantha Kodagoda, limited questions were posed to the PM. The PM was at the PCoI reportedly for less than an hour to clarify matters arising from his affidavit

4) Much is being made that the PM ‘volunteered’ to come before the PCoI although ‘not summoned’ like the other witnesses. The media has even reported that PCoI Chairman – K. T. Chitrasiri (SC Judge) “emphasised that the question of compelling PM Wickremesinghe to appear before the commission had never arisen”.  I respectfully ask (i) in view of the facts and circumstances should not the PM have been ‘summoned’ like the other witnesses? (ii) if not why? (iii) what does this indicate?

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