4 December, 2020

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Auditor General Silent On Corrupt CA Sri Lanka 

By Amrit Muttukumaru

Amrit Muttukumaru

By what perverse logic does Chandra Jayaratne described as a “good governance activist” expect a corrupt CA Sri Lanka to “Safeguard the Integrity” of the Auditor General – H.M. Gamini Wijesinghe under attack by powerful vested interests threatened by his demand for accountability for alleged egregious wrongdoing? He does so in his independence day letter to the President and Council of the Institute of Chartered Accountants of Sri Lanka captioned “An Appeal to Safeguard the Independence, Integrity and Professional Position of the Auditor General” also copied to the President and Prime Minister of Sri Lanka.

In his letter he inter alia informs CA Sri Lanka “I am sure you realize that the position of the Auditor General, is the most prestigious and responsible office a member of the Institute can hold

Chandra was made fully aware by this writer through ‘open’ letters in the media and e-mails of the ‘open & shut’ case of professional misconduct by the ‘Partners’ concerned of the Sri Lanka affiliates of PwC and Ernst & Young in the fraudulent privatization of the Sri Lanka Insurance Corporation confirmed by (i) Supreme Court (ii) Parliament’s COPE (iii) Attorney-General and the failure of CA Sri Lanka and Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) to hold those concerned accountable.

This is apart from CA Sri Lanka ‘Ethics’ Committee itself more than 10 years ago further to my complaint endorsing the findings of its Investigating ‘Panel’ of a prima-facie case of ‘Professional Misconduct’ by PwC and EY and ALL their Partners at the relevant period in the scandalous SLIC privatization.

Not only did he not respond but more reprehensibly he has never referred to this ‘open & shut’ case in his regular missives in the media on good governance with emphasis on accountability.

Surely, is there any need to inform Chandra Jayaratne and Auditor General – Gamini Wijesinghe both senior chartered accountants held out to be good governance activists of this egregious professional misconduct?

Gamini Wijesinghe of whom much is expected and described by an influential section of the media as “fearless” and a “knight in shining armour” will definitely enhance his credibility and moral authority by demanding accountability for this ‘open & shut’ case. Previously he was Director General of SLAASMB.

While PwC (Indonesia & Sri Lanka) functioned as Consultant, ‘Investment Banking and Legal Advisory Services’ to the Government of Sri Lanka, EY (Sri Lanka) were the ‘Auditors’ to SLIC.

Peculiar Letter

Earlier in another letter to President, CA Sri Lanka and Chairman, SLAASMB in the ‘Daily Mirror’ of 25 October 2016, Chandra urged them to “introduce necessary regulatory reforms and oversight mechanisms, to assure upholding of professional standards, best practices, ethics”.

This is strange since all chartered accountants are aware that CA Sri Lanka established by Parliament by Act No.23 of 1959 has the necessary regulations “to assure upholding of professional standards” and what is glaringly lacking is the WILL to uphold the same.

CA Sri Lanka & SLAASMB

The ‘Supreme Court’ (SC FR Application No: 158/2007) in its landmark Judgment delivered on 4 June 2009, held the SLIC privatisation to be “illegal and invalid ab initio” and had ordered the removal “forthwith” of the auditors, EY. The judgment is also signed by incumbent Chief Justice Hon. K. Sripavan. (emphasis mine)

Not holding those concerned accountable violates with impunity Section 17 (2) (b) of CA Sri Lanka Act of Incorporation which clearly stipulates that when an ‘Investigating Committee’ appointed by the ‘Council’ “reports to the Council that a prima facie case of professional misconduct has been made out against a member, the Council shall appoint a disciplinary committee for the purpose of inquiring into the conduct of such member” (emphasis mine).

As for the SLAASMB, at the conclusion of its purported ‘investigation’ of this same fraudulent privatization, I received the following farcical response as per its e-mail dated 28 November 2005:
“Whilst we appreciate the contribution made by the complainants, we are not in a position to keep the complainant informed of the progress of the investigation and the outcome of the investigation, as it would undermine our policy on releasing information to the public.”

This was signed by Ms. Gayani L. Perera, then Technical Manager and presently Deputy Director General.

Mr. W.A Wijewardena – Former Deputy Governor, Central Bank of Sri Lanka was Chairman, SLAASMB on this date.

‘Partnership’ Law

Under the ‘Partnership’ law in Sri Lanka, ALL ‘Partners’ are ‘Jointly and severally’ liable for any wrongdoing. All Partners are aware of every audit and assignment. It is unethical for any ‘Partner’ to plead ignorance.

It is the responsibility of CA Sri Lanka to forthwith disclose the identity of those who were ‘Partners’ of PwC and EY at least 3 years prior to 11 April 2003 which is the date on which the fraudulent SLIC privatization took place.

It is outrageous that some ‘Partners’ falling under this period have been appointed ‘Directors’ of ‘quoted’ companies and Banks. Some have even been appointed by CA Sri Lanka to its ‘Quality Assurance Board’ and inducted to its ‘Hall of Fame’! Such is the impunity.

Conclusion

In another recent article Chandra Jayaratne inter alia states “Professionals are Accountable for the Destiny of Sri Lanka”. While agreeing with him, I ask him and other proponents of good governance such as ‘Friday Forum’ of which he is convener and Transparency International Sri Lanka of which he was a Director whether they are serious in combating corruption and abuse of power when the role of auditors is ignored? After all, are not chartered accountants and auditors the first line of defence against corruption in all entities dealing with financial resources?
Could the alleged Treasury Bond scams have taken place without the complicity of professionals in the hierarchy of the Central Bank and Bank of Ceylon – lawyers, accountants and others?
Although activists talk the hind legs off a donkey on the evils of corruption and some get paid handsomely for doing so, they fail to bite the bullet by ‘naming & shaming’ errant professionals and bigwigs in the corporate sector complicit in the corruption of politicians.

My experience after several years of ‘struggle’ as the complainant to CA Sri Lanka is that there is a conspiracy involving influential sections of the political, corporate, professional, media and NGO establishments for a ‘cover-up’ due to ‘wheels within wheels’ within our largely ‘wheeler dealer’ economy. The perilous state of the economy and social fabric for which successive governments are responsible bear testimony to this assertion.

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Latest comments

  • 2
    4

    What on earth is CA?!

    Dude, Amrit Muttukumaru please learn to write an article properly and please spell out abbreviations first time around, before using them!

    • 0
      2

      I had the same problem, But I tink it is the body, institute of chartered accountants?

      • 1
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        You problems have always been different to the average since you are not grown enough see problems. Please dont abuse social funds being offered to you UK govt.. return home and join hand with Rajapalkshe ground men, that will for sure guide you better. Good luck

    • 2
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      That should be “Chartered Accountants “. How come you failed to get it if you read the article ?

  • 0
    1

    Who is Chandra Jayaratne.

    • 0
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      Human rights activist:

  • 0
    1

    [Edited out]

  • 1
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    I completely agree with you Mr.Muttukumaru this not Yahapalanaya as you said “Wheeler dealer economy” all professional are corrupt even accounting bodies of SL.
    When late Indira Gandhi asked her father pandit Nehru whom she should select as her husband Nehru said all professionals are corrupt in India except landed proprietors.

  • 1
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    What is this bloke talking about? What is CA Sri Lanka? Canadian Aids? Criminal`s Association? Who is Chandra Jayaratne .. Is he Dimu Jayaratne`s brother?

    • 0
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      Who is Chandra Jayaratne .. Is he Dimu Jayaratne`s brother?

      You mean Kudu Dimu whose son, another Member of parliament, who tried to sabotage Maitheipala sirisena’s election campaign with violence and destruction ?

  • 1
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    Dude/Diogenes……………. when it suit you guys you are aware of abbreviations……………

    Read the article about Chandra Jayaratne a Yahapalanaya advocate and former Chamber of Commerce and who held various other responsible posts in the field of commerece or business.

    Ignorance is a bliss or for convenience?/

  • 0
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    CUT THE CRAP

    The professional ‘mafia’ have gone into panic mode. There is no limit to their deception.

    From the opening paragraph onwards it is crystal clear that ‘CA Sri Lanka’ is nothing but the ‘Institute of Chartered Accountants of Sri Lanka’!

    I once again ask: “Could the alleged Treasury Bond scams have taken place without the complicity of professionals in the hierarchy of the Central Bank and Bank of Ceylon – lawyers, accountants and others?”

    Unless there is ‘naming & shaming’ of wrongdoers corruption and abuse will march on.

    The mainstream media carrying this article is remote.

    A response without prevarication is awaited from the parties concerned particularly: (i) Auditor General – Gamini Wijesinghe (ii) Chandra Jayaratne (iii) W.A Wijewardena (iv) CA Sri Lanka (v) SLAASMB.

    Amrit Muttukumaru

  • 3
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    Amrit Muttukumaru

    Can you please tell What is your profession.For one incident even that happened 10 years ago you can’t blame the entire CA Sri Lanka and all the chartered Accountants. Chartered Accountants like Mayadunne former Auditor General and Gamini wijesinghe present Auditor General have done and doing a yeoman service to the country fearlessly. You say that ‘CA Sri Lanka’ is nothing but the ‘Institute of Chartered Accountants of Sri Lanka’!. Do you have any private grudge or jealousy against CA Sri lanka? If there are no accountants especially Chartered Accountants in this country the process of accountability will be zero. There will be day light robbery of public funds and assets. Government revenue collection will collapse.

    Why can’t you go to courts and prove your case? Lack of respect for genuine honest patriotic professionals is a curse of this country.

    • 0
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      Fully agree with Citizen.

      Amrit should challenge the final judgment of the Supreme Court delivered around 2010 on the SLIC privatization and ask for a full bench to review such judgment.

      Cannot see any reference to EY or PwC in the final judgment other than a new auditor being appointed to SLIC going forward.

  • 1
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    The Supreme Court has passed judgement. The Chartered Accountants institute is not conducting an inquiry to punish the wrongdoers because the Council is controlled by an audit mafia.

    • 1
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      Fully agree with Anil.

      Hence the reason to challenge the three member Supreme Court decision with a full bench.

      Guys like Amrit should be encouraged to challenge the Supreme Court decision.

  • 1
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    Well said. There is no doubt that Audit firms are covering large scale corruptions by Private Sector to have continued good favourable business relationship with the Boards, for repeat Audits. In my view Audit Firms, Valuers , Bank Senior Managements are also integral component of Engine of Corruption of Corporate bodies.

    • 0
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      raza

      You say ‘”There is no doubt that Audit firms are covering large scale corruptions by Private Sector”
      If you know a fraud or crime you have to report it to police. Auditors are governed by standards, guidelines and companies act and other laws. If they are violating these, they would do so taking a huge risk.. Auditors provide a significant service to the country. Not long ago one government auditor suffered by an attack.

  • 0
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    Anil Fernando

    Unless and until some one is proved and punished by courts he is assumed to be innocent. Chartered Institute is not a court of law to punish some body for fraud. This article is some personal vendetta against CA Sri lanka.

  • 1
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    Citizen, the chartered institute has the power to strip a member of his membership for professional misconduct. You don’t need a court of law for that. Only an internal inquiry.
    Jagath, Supreme Court has passed judgement . The ICASL has to act on it.

  • 0
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    AUDITOR – GENERAL: MEMBER, CA SRI LANKA ‘COUNCIL’

    Further to my above ‘Colombo Telegraph’ article, apologists/proxies have come up with ‘red herrings’ in the continuing saga of the ‘cover-up’ of the professional misconduct by the ‘Partners’ concerned of the two largest audit firms in the country – PwC & EY in relation to the fraudulent privatization of the Sri Lanka Insurance Corporation.

    The absurdities include (i) “What is CA Sri Lanka? Canadian Aids?” (ii) “Do you have any private grudge or jealousy against CA Sri lanka?”

    I am addressing you since as Auditor-General you are an EX-OFFICIO member of the powerful ‘COUNCIL’ of CA Sri Lanka. Previously you were Director- General of Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB)

    Your efforts towards good governance are applauded by all right thinking people of this country. You will be among the first to agree that the alleged Treasury Bond scams could not have taken place without the complicity of professionals in the hierarchy of the Central Bank and Bank of Ceylon – accountants, lawyers and others.

    Although the alleged egregious corruption and abuse of power in Sri Lankan Airlines has banner headlines, what is glaringly omitted is the identity of the airline’s longstanding auditor – Ernst & Young. Why?

    Are not chartered accountants and auditors the first line of defence against corruption in all entities dealing with financial resources?

    With all due respect I am of the opinion that your CREDIBILTY AND MORAL AUTHORITY will be greatly enhanced if you demand accountability for the ‘OPEN & SHUT’ case of the fraudulent SLIC privatization.

    IN THE CONTEXT of PwC (Indonesia & Sri Lanka) functioning as Consultant, ‘Investment Banking and Legal Advisory Services’ to the GOSL and EY (Sri Lanka) being ‘Auditors’ of SLIC:

    1) The ‘Supreme Court’ (SC FR Application No: 158/2007) in its landmark Judgment delivered on 4 June 2009, held the SLIC privatization to be “illegal and invalid ab initio” (Page 61) and ordered the removal “forthwith” of the auditors, EY (Page 63) The judgment is also signed by incumbent Chief Justice Hon. K. Sripavan.

    2) This fraudulent privatization was also confirmed by (i) Parliament’s COPE (ii) Attorney-General

    3) Even CA Sri Lanka ‘Ethics’ Committee itself more than 10 years ago further to my complaint endorsed the findings of its Investigating ‘Panel’ of a prima-facie case of ‘Professional Misconduct’ by PwC and EY and ALL their Partners at the relevant period.

    4) As a ‘Council’ member you are aware that not holding those concerned accountable violates with IMPUNITY Section 17 (2) (b) of CA Sri Lanka Act of Incorporation.

    5) You are also aware that CA Sri Lanka established by Parliament by Act No.23 of 1959 has QUASI-JUDICIAL powers.

    6) You are also aware that under the ‘Partnership’ law in Sri Lanka, ALL ‘Partners’ are ‘JOINTLY AND SEVERALLY’ liable for any wrongdoing.

    7) Is it not the responsibility of CA Sri Lanka to disclose the IDENTITY of those who were ‘Partners’ of PwC and EY at least 3 years PRIOR TO 11 APRIL 2003 which is the date on which the fraudulent SLIC privatization took place?

    Amrit Muttukumaru

    • 0
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      Amrit Muttukumaru

      Code of ethics is matter for CA to deal with. For any frauds or crimes you have to complaint to police.

      Auditors cannot be held responsible for each and every fraud and irregularities that are taking place in various institutions. They are not detectives or law enforcement authorities. They are not blood hounds. They are only watch dogs serving the much needed deterrent.

      Amrit Muttukumaru, You didn’t still reveal your profession? Your article is a reflection of abundance of ignorance.

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