Bond Saga Aftermath Of The Presidential Commission Report

By Rusiripala Tennakoon –February 3, 2018

Ongoing public debate after the publication of the Presidential Commission Report centers around several conjectures and concerns regarding the future follow up steps. There are serious attempts to shelve the process recommended by the CoI by interested parties. However the Presidential directives appear to be relevant and effective for the implementation of the recommendations of the Commission and other corrective measures.

Proposed Parliamentary Debate 

It is interesting to note why so much of importance is given to a debate rather than insisting on the speedy implementation of the findings and recommendations. When the second COPE report was tabled in parliament by its Chairman Sunil Handunneththi, the country witnessed what the parliament did. After protracted exchanges of insinuations, innuendos and allegations against each other it became evident that it was going to be the end of the chapter. Those who were responsible to initiate meaningful action have already taken calculated steps to send the issue to hibernation. Before the Parliamentary debate the second COPE report had been sent to the Attorney General by the Prime Minister. It was reported that the AG’s department had not concluded the decision whether action on the Bond issue should be taken as a civil matter or a criminal matter. It is in this context that the President decided to appoint a Presidential Commission of Inquiry. The gazette notification was issued on 27th Jan 2017, a few days after the Parliament debate appointing the CoI. The COI, after a lengthy inquiry assisted by the AG’s department has issued its report based on the evidence placed before them giving their conclusions, and determinations along with observations.

 

Recommendations And Observations 

Chapter 33 of the report contains the recommendations made by the CoI. It is pointed out that relevant Law such as the Monetary Law, Local Treasury Bills Ordinance and Registered Stock and Securities Ordinance need to be replaced in consultation with the CBSL.

Appointment Of The Governor 

CoI has recommended that due consideration should be given to develop criteria and specified procedures to govern the selection of the person to be appointed as the Governor of the CBSL. The recommendation goes to explain the importance of the position of the Governor and asserted this view stating, it is hardly necessary to emphasize that, Governor of the CBSL is a key official who hold enormous responsibilities and that, he must be a person of highest integrity and ability and also have the required knowledge and experience to effectively perform his duties in the best interest of the Nation and its people. They have suggested that it is best for such a selection be made at a level such as the Constitutional council. CoI is of the opinion that even the appointment of the members to the Monetary Board should be done in this manner. Arjuna Mahendran was appointed the Governor of the CBSL on 23rd January 2015. The Commission report states that as this is before the period of the mandate commenced they have no jurisdiction to determine the merits or demerits of the appointment. But they have stated the fact that they cannot be insensible to the concerns expressed in the public domain with regard to the propriety of Mahendran’s appointment following his alleged interventions in the Treasury Bond Auction held on 27th February 2015 and his relationship with Arjun Aloysius of Perpetual Treasuries Ltd.which obtained the lion’s share of the bids accepted at that auction.

Among the concerns expressed about this matter in the public domain was whether it was unlawful or unsuitable to appoint him as he was a non-citizen. It was the PM who had telephoned him and invited him to serve as the Governor of the CBSL. It was a requirement for the appointment to be recommended by the Finance Minister but as the CBSL was then placed under the Minister of National Policies and Economic affairs, Mr.Ranil Wickremesinghe, he said in evidence that the Finance Minister made the recommendation with his concurrence. Regarding this the CoI has opined that the issue was not “a question of law” but it was a ‘value judgement’ which had to be made by those who considered the wisdom of appointing Mahendran, who was not a citizen of SL, as the Governor of the CBSL.

 

The wisdom of bringing the CBSL under the Minister of National Policies and Economic affairs too was a matter focused on by the CoI. While observing that the CBSL was under the Finance Ministry before 2015, CoI has pointed out that it is a decision taken by the executive which is entirely outside the scope of their Mandate.

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