New presidential commission to investigate old bond frauds!

Aug 26, 2017

Cabraal in Greek bond scam; media heads to be summoned as FCID begins probe!

After the special presidential commission of inquiry completes its deliberations into the Central Bank bond sales, a similar commission will be set up to inquire into the bond transactions and the seriously suspicious transactions carried out through the EPF during the previous regime, say president’s office sources.

The preliminary draft in that regard is presently underway, and it will soon be implemented and the culprits brought to book in a transparent and speedy manner, the sources say.

A president’s office official said many financial irregularities have been exposed in the investment of the country’s reserves to buy Greek bonds in 2011 with a face value of 33 million euro for 22.16 million euro.

Those bonds were sold in the same year and the European Central Bank-given other assignments in exchange for the bonds were obtained to withdraw from the transactions, but the Sri Lankan state lost more than Rs. 2,100 million from it, approximate estimates show.

The reserves comprised money obtained on credit, and further loans were obtained to repay them, the official said, adding that the financial harm caused to the country due to having continuously obtained credit was very grave.

Those bond transactions took place under the direct method and the nature of the transactions makes it clear that corruption had taken place, and several officials who held top Central Bank positions at the time will have to appear before the commission, he said.

Also, there is evidence how shares of a leading financial institution bought with EPF money were invested in the Malaysian EPF’s Khazanah National Berhard during the period Ajith Nivard Cabraal was the CB governor, which is adequate to launch an investigation, he said.

The Hyatt Hotel deal involving the EPF and Insurance Corporation despite there clearly being no chance of any profit, sale of around 40 tons of Sri Lanka’s gold reserves to Japan’s Suisse Securities, causing losses by investing CEB’s EPF money in bonds through a private company, payment of money by the CB for various matters not relating to the bank will also be investigated, he said.

Also Cabraal and several wealthy businessmen friendly with the then government were behind the artificial increase of financial, gas and hotel company shares and buying those shares at high prices using the EPF money (pump and dump). They had later invested the money they earned as profit in media networks and other major investments.

With the commencement of the investigations, it will come to light as to how agents of the financial mafia that abused state finances during the Rajapaksa regime became billionaires, said the official. Also, the secret will be revealed behind a campaign by certain media network owners who are finding faults of the ‘Yahapaalana’ government only and indirectly nurturing racism in order to bring the Rajapaksas back to power. The official added that according to legal and financial experts, a separate commission needs to be appointed in light of the available complaints and evidence to investigate fraud that had taken place in the share market during the 2011-15 period.

The official said the two bond commissions will establish the stability of the ‘Yahapaalana’ government.

However, Wijedasa Rajapaksa, who was removed as the justice and Buddha Sasana minister, has told the media that the CB bond issue was the biggest robbery that had taken place in the country, and that he lost his position due to a conspiracy by the ‘footnote gang’ that prevented the revealing of the identities of the big-shots in the fraud before the presidential commission.

Achintha Bandara