Bond scams: Is loss Rs 11 billion or 1.5 trillion?


The Presidential Commission which probed bond scams has recommended further investigations. This would mean that it requires further, thorough, transparent and independent investigation to find out under whose directions Arjuna Mahendran worked and permitted his son-in-law to earn billions of Rupees within a matter of few months. The investigation has to find out who masterminded the racket, to enable Perpetual Treasuries to earn enormous amounts of money at the expense of the public, especially workers who contribute to the EPF.

No one, even with an infantile intelligence, would conclude that this was done purely on an understanding between the father-in-law and the son-in-law.

If that was so, and the Minister did not have any knowledge of this transaction, then the moment this matter came on the public domain, and became a political tool for Mahinda Rajapaksa and the Joint Opposition to sling mud at the Government, the Government in all sincerity, in order to come clean before the public and show that they are genuinely carrying the flag of good governance, transparency, rule-of-law - and in order to eradicate any suspicion among the public and the Joint Opposition, to show they are different from the crooked, corrupt government they defeated - should have made inquiries on the matters raised by the media, and possibly investigated the first bond transaction.

When the Prime Minister said in his evidence that he directed Arjuna Mahendran to ensure, utmost good faith and transparency, in dealing with the sale of bonds, and quite contrary to this direction, Arjuna Mahendran had changed overnight to the ‘auction only’ method; what did the PM do to arrest this situation?

He has not done anything at all. Instead of which, he, in every single forum, before Parliament and before the public, defended his appointee, Arjuna Mahendran.

Though the Commission Report has said there was nothing improper in the appointment of the Governor, the Commission was very critical of the Governor Arjuna Mahendran, not taking oaths as is prescribed in the Constitution.

Why did not the Minister-in-Charge of the Subject, request that his appointee Arjuna Mahendran, follow the law of the land? Technically, he had ceased to function as the Governor when he wantonly disregarded the mandatory provisions of the Constitution and the Establishment Code. He had ceased to function and had become funcus officio.

Why did the Prime Minister and Ravi Karunanayake, the then Minister of Finance, permit a chosen individual who was entrusted with resurrecting the economy of the country, to disregard and defy the laws of the land? Is this not an item of evidence, to show the complicity of the person, the Minister-in-Charge of the Subject?

Thereafter, when this matter became a focal point of debate in the House of Parliament, and most members without an iota of knowledge called hoarse to establish a mechanism to investigate the alleged crime that has been committed, How should any reasonable, prudent man who is a moralist, an anti-corruption crusader , who became the Prime Minister of this country, react?

By this time, the CID was directly under the UNP. The Central Bank had its own Investigating Unit, and the Auditor General was also under the Government. Instead of permitting any of these agencies to inquire, and if possible arrest and produce the suspect in courts, what did the Prime Minister do?

He could have at least moved a Parliamentary Select Committee to investigate into this. There was a very exuberant anti-corruption messiah who was the Director General of the Bribery Corruption Commission, Mrs. Dilrukshi Wickremasinghe, who could have been sounded immediately to stop this scam, as the Prime Minister would have felt that Mahendran, instead of becoming the savior of the Sri Lankan economy, has become a robber baron who was interested in plundering the moneys that belong to the people, with his son-in-law, Arjuna Aloysius.

Not a stone was turned, and when the cries became louder, they appointed three (03) lawyers and staunch supporters of the UNP, and ordered them to direct this investigation. The most senior member was Mr. Gamini Pitipana, and it was therefore called the Pitipana Commission. Isn’t this the same thing that the former administration did?

Unless you have short memories, you would have not forgotten the Committee headed by a Senior. President’s Councel that inquired into the alleged incident of former MP, Mervyn Silva, tying a public officer to a tree.

The conclusion of that Committee was that this person, the victim, was an ardent supporter of the Minister and had volunteered to tie himself to a tree in order that the Minister would get the public support and sympathy for his struggle to eradicate dengue. No one could expect a Committee of (03) three Snr. Lawyers of the SLFP to find Mr. Silva guilty of any crime.

The UNP and the then Opposition, simply laughed at the crude joke perpetrated on them, by Mahinda Rajapaksa and his cronies.

Ranil Wickremesinghe who laughed most at the crude banality of the pseudo Disciplinary Committee, where even ‘King Kekille’ would have felt bemused at the findings for exonerating the accused, and then finding the complainant of dereliction of his duty for having tied himself to a tree in the presence of large number of people and TV cameras.

The Pitipana Committee was only slightly different, and as expected exonerated Arjuna Mahendran, but yet said that one transaction was suspicious. However, they were unable to give a detailed report as they did not have the resources to go into those transactions. Therefore, the least they did to better than the Weerasinghe Committee was to recommend a forensic audit, with digital foot print be carried out.

Then what did the Leader of the United National Party, the Prime Minister as the Minister-in-Charge of the subject do, to ensure that the recommendations are carried out? If at least a forensic audit was done the Auditors would have been able to evaluate the actual loss occurred by the country. According to some experts, this is what the forensic audit would probably show.

In the year 2014 our Total Debt was Rs. 7,400 Billion of which the foreign borrowing debt was Rs. 3,200 Billion. The local debt was Rs. 4,200 Billion.

After the Great Bank Robbery, the interest shot up by 3% and in the year 2015 alone, the loss to the government could be calculated on the following basis: Rupees 4,200 Billion x 3% which is Rs. 126 Billion.

With 126 billion we could have built the Colombo – Kandy Highway.

By changing the system of buying the bonds from the Direct Placement method to the Auction Only method, the approx. loss incurred by the Government is 55 Billion. That would be sufficient to reconstruct the Colombo-Katunayake Highway.

The loss incurred by the EPF was around 20 Billion, this cost would have been sufficient to build Galle-Matara Highway.

Due to the excessive borrowing and inflation, and as the rate of interest shot up by 3% the loss incurred to the ordinary borrower and the corporate sector was around Rs. 280 Billion. This amount is sufficient for several projects like the Norochcholai Coal Power Plant, the Mattala Airport and the Hambantota Harbour.

When exposure was made about the greatest scam that was made in the history of Sri Lanka by the Governor of Central Bank and the political cronies who protected him, was one reason why the foreign investors withdrew the investment and therefore the rupee was depreciated by almost 16%; and on that score alone, in the year 2015, we have lost approx. Rs. 512 billion which is sufficient for mega project like the Colombo-Katunayake Highway, the Colombo-Galle Highway, the Colombo-Galle Highway, the Galle-Matara Highway, the Norochcholai Coal Power Plant, the Mattala Airport and the Hambantota Harbour.

Now, the interest rate has shot up on all the borrowings, which will affect everyone for the next 30 years. When the State Minister of Finance made a statement, the real loss from the Bond robbery, is not Rs. 11 billion as stated by the Commission, the cumulative effect and the loss would amount to nearly Rupees One Trillion.

Not only us, but our children, grand and great grand children as well would have to bear the loss of this robbery conducted by elitist leaders of this country.

I am reminded of a remark made by Chairman of the Batalanda Commission Jayawickrema: a crime is generally committed by the underworld, but preparation, planning, the protection of the underworld and the guidance and leadership come from the super world.

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