Governor Indrajit – Shameful To Avoid Response On Money Laundering

By Amrit Muttukumaru –MARCH 21, 2018

Amrit Muttukumaru

Dr. Indrajit Coomaraswamy was appointed Governor, Central Bank of Sri Lanka (CBSL) with great expectations to ‘clean up’ and give it credibility after its ignominious conduct in recent times where the egregious Bond Scam (prior to him assuming office) figures prominently. One wonders whether the CBSL has learnt anything from the Bond Scam and other misdemeanors going by the example of the European Union designating Sri Lanka as a ‘high risk country for money laundering’ subsequent to the ‘Financial Action Task Force’ (FATF) placing the country on its ‘grey list’ reportedly from NOVEMBER 2017 for which Dr. Coomaraswamy who assumed office as Governor from 3 JULY 2016 must bear some responsibility.

The EU stricture confirms what discerning persons long suspected. Even before the stricture, the country was attracting questionable FDIs which include the non-existent Volkswagen AG assembly plant and the controversial tyre factory in Horana. The large Chinese investments are mainly geo-political in nature connected to big power rivalry in the Indian Ocean which could haunt us in the future.
It is shameful that even after two weeks the CBSL has failed to respond to my article published in the ‘Colombo Telegraph’ on 4 March and subsequently in the print media:

‘Money Laundering’ Label Disastrous For Country; CBSL Wake-Up!

The issues being avoided include:

1) Money Laundering/Tax Evasion?

What action has CBSL taken in relation to:

i) Kaushitha Rathnaveera, a Senior Dealer of PTL (Perpetual Treasuries Limited) disclosing to the Presidential Commission of Inquiry (PCoI) probing the Bond Scam that “millions” encashed by him were “several times” left on “PTL CEO Kasun Palisena’s chair”.

ii) Nuwan Salgado, Chief Dealer of PTL disclosing to the PCoI that on the “instructions of PTL CEO Kasun Palisena” he maintained a record of payments to “informants” code named as ‘Charlie’, ‘Tango’ and others.

iii) B.R. Sinniah, Chief Financial Officer of GTLPL said to be controlled by former Finance Minister Ravi Karunanayake’s family in his testimony to the PCoI disclosing:

“Chairman ‘Lakshmi Kanthan’ who resides in Britain had arrived at the Company on two occasions in February 2016 and 2017 and dumped cash amounting to Rs.145 million in the Chairman’s safe”

“it had not been supported by any documentation or receipt issued to Mr. Kanthan neither were there any entries in the GTLPL accounts books regarding these two cash inflows”

How can the CBSL ignore this?

2) PEPs as Bank Directors 

i) In the context of Politically Exposed Persons (PEPs) being at the centre of the worldwide efforts for the prevention of money laundering, the CBSL continues to ignore ‘directors’ of banks who are obvious PEPs as per its own definition.

It begs the question when even the mere “Opening of accounts” in banks by PEPs is under scrutiny in Sri Lanka, how the Director of Bank Supervision could advise me there is “no restriction for appointments of PEPs as Board members of licensed banks”?

ii) The situation is so HOPELESS in Sri Lanka that it was revealed at the PCoI that B.R. Sinniah (said to be CFO in Karunanayake’s family company) was “appointed to the Board of Directors of the BoC” by Minister Karunanayake.

Although B.R. Sinniah had presumably ceased being a bank director when Dr. Coomaraswamy assumed the position of CBSL governor, the fact of the matter is that under his watch too there are PEPs who are bank directors.

iii) During the tenure of former CBSL Governor – Nivard Cabraal, his sister Siromi Wickramasinghe – clearly a PEP was a bank ‘director’ which included being Chairman of ‘State owned’ entity HDFC Bank (Housing Development Finance Corporation).

It must be flagged that although all PEPs are not involved in money laundering or unlawful activities, the high risk they pose cannot be ignored. Should not laws and guidelines which are there for a purpose be adhered to?

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