COPE report on CBSL Bond scam
House debate not sure

President orders setting up of probe Commission


President Maithripala Sirisena has instructed the Attorney General to take immediate steps to appoint a Special Presidential Commission to inquire into the allegations of malpractices in the bond issue of the Central Bank of Sri Lanka and take required legal action, President’s Media Division said in a release yesterday.

It said: A gazette notification to appoint a Commission comprising a judge of the Supreme Court, a judge of the High Court and an expert in auditing will be issued this week. The Commission is mandated to submit a report within three months.

The President called upon all relevant parties to extend fullest cooperation to the Commission to successfully carry out its assigned duties.

On Oct 28, 2016 COPE Chairman Sunil Handunnetti informed Parliament that his committee had found that former Central Bank Governor Arjuna Mahendran was directly responsible for the Treasury bond scam and recommended legal action against him and the other Central Bank officials responsible for it.

Handunnetti, presenting the report on the Treasury bond scam, said that the committee observed that there was enough grounds to believe that former CB Governor Mahendran had interfered with or exerted his influence on the bond sales from Feb. 27, 2015 to May 2016.

He said that the incident had led to an erosion of confidence in the Central Bank.The COPE has observed that Perpetual Treasuries recorded massive profits and recommended that if the company’s profit making has resulted in any loss to the Central Bank or the government, then it should be recovered from it by initiating legal action.

The COPE recommends that Parliament should directly intervene to monitor the process of implementing the watchdog committee recommendations and to prevent the recurrence of such incidents in the future. It recommends a proper mechanism be in place in the CB and affiliated institutions to prevent similar incidents in the future.

It recommends that the President appoint a special observation group to monitor financial activities of the CB.

The COPE recommends holding a separate investigation into Perpetual Treasuries Ltd.

The COPE Chairman said all members collectively had agreed to the 15 recommendations of the report, but there had been dissent on the content. He said out of the 26 members in the Committee 16 members had endorsed the report without footnotes, whereas nine members had endorsed it with footnotes.

The report contains 55 pages and annextures running to 1,900-2,000 pages. It deals with the investigations into the CB Treasury Bond sales from February 2015 to May 2016. It includes 15 recommendations and 15 conclusions.

The report is scheduled to be taken up for debate in parliament starting from 10.30 am today, parliament sources said. Ven Thiniyawala Palitha Thera has filed a fundamental rights petition challenging the report of the COPE on the bond issue.

Palitha Thera, is claiming that the COPE report is "littered with inconsistencies and/or contradictions and/or misrepresentations" which, he says, "makes certain findings and/or statements in the COPE report unsafe, and/or prejudiced and/or biased…". He claims it is therefore a violation and infringement of his fundamental rights.

The government has indicated its willingness to go for the debate, yet Ven Palitha Thera’s FR petition before the Supreme Court may hinder holding the debate on the grounds that the matter is sub judice, party sources pointed out.

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