EPF Scam: Central Bank Governor Accused Of Pussyfooting

March 29, 2017 

The Central Bank’s stance on the accused perpetrators of the Employees Provident Fund (EPF) scam is been severely criticized by Central Bank whistleblowers.

Indrajit Coomaraswamy – Governor CBSL

A group of whistleblowers went on to say that the precent Governor, Indrajit Coomaraswamy and the Monetary Board should know that this was the very same institution that once had a reputation for taking a firm stand and even going to the extent of sacking wrongdoers for stealing Rs 300.

Responding to the accusation levelled against the Central Bank, the institution has yesterday said: “The Central Bank of Sri Lanka wishes to clarify its position on certain media reports that carried erroneous facts on the proceedings of the Monetary Board meeting held recently.”

“The Monetary Board had a discussion on the Report on the Examination of the Employees’ Provident Fund Transactions in Government Securities with a view to decide the suitable course of action to be followed in respect of the findings. The Monetary Board decided to commence disciplinary proceedings in terms of the internal procedures of the Central Bank of Sri Lanka against any officials of the Bank where there is evidence of wrongdoing,” the Central Bank further said in a statement.

Even though many media institutions carried stories regarding the monetary board discussion, it was Colombo Telegraph who went on to carry a detailed report.

Colombo Telegraph firmly stands by its published story.

We reported on Monday ( March 27, 2017): “At the Monetary Board meeting, Monetary Board members Nihal Fonseka and Chrishantha Perera had demanded that the officials involved are immediately interdicted and disciplinary action taken. However, Treasury Secretary Dr. R. H. S. Samaratunga and another Board member Mano Ramanathan have been non-committal. Finally Governor Indrajit Coomaraswamy had wanted to soft-peddle the issue fearing further controversy and decided to send a “show-cause” letter to the officials who have been clearly named in the report as offenders”.

Criticising the Central Bnaks’s stand a whistleblower said: “What had been suggested by the two independent board members had been that they should be immediately interdicted so that they cannot influence the disciplinary proceedings; the amount of loss has been Rs 9.5 billion and given the seriousness of the misdemeanor, Central Bank should be out of bound for them. Now any disciplinary inquiry while they are in service is a mockery like the inquiries done when Arjuna Mahendran was the Governor; no body came forward to tell the truth. Yesterday, even Deputy Governor P Samarasiri has taken an independent stand before the Commission. Central Bank interdicts officers concerned even for a lesser loss like Rs 1000. Here the loss is Rs 9.5 billion!”

“A field officer attached to a poverty alleviation project run by Central Bank had misappropriated Rs 300 from poor beneficiaries and he was immediately interdicted from service; the disciplinary inquiry led to his expulsion and he even went before the Supreme Court claiming that his FRs had been violated; Supreme Court dismissed the case on the ground that it was a crime to rob money from poor women; In another instance, a clerk in EPF attempted to misappropriate some 10000 rupees belonging to a member and he was interdicted from service, dealt with disciplinarily and expelled from service; on another occasion, the salary clerk responsible for sending salaries to bank accounts had sent Rs 5000 to his account by deducting the same from the salary of another employee. He was interdicted, disciplinary action was taken and expelled from the Bank,” another whistleblower told Colombo Telegraph.

The EPF scam which caused a loss of Rs. 9,500 Million has been officially brought to the notice of the Monetary Board by a special investigative team of the Central Bank at its meeting held on 23rd March 2017.

The Investigative Team was led by Assistant Governor Kumudhini Saravanamuttu and consisted of Pavithra Withanage and Yohan Samaratunga.

The report sets out in detail the manner in which the scam has been carried out by two officials of the Central Bank who have connived and done deals with Perpetual Treasuries linked to former Governor Arjuna Mahendran’s son-in-law Arjun Aloysius, the sources said.

According to the report, the delay which caused the massive losses to the EPF have been done directly with Perpetual Treasuries or routed through other intermediary dealers, Pan Asia Bank and DFCC Bank.

However, a clear audit trail has been left behind making it possible for the Investigative Team to trace all the transactions and to calculate the losses to the country’s main fund, the EPF, the sources added.

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