Good governance activist and former chairman of the Ceylon Chamber of Commerce, Chandra Jayaratne has called on Minister of Labour and Trade Union Relations, W. D. J. Seneviratne to Initiate an Immediate Independent Inquiry, by persons with requisite capability, independence and integrity, to assess the operational efficiency and effectiveness of Bond Investments by the Employees Provident Fund (EPF).

Chandra Jayaratne

In a letter sent to Seneviratne on 03rd June 2016, Jayaratne said, “You would no doubt agree, whereas the fund management and administration accountability for the fund assets of the EPF lie with the Central Bank of Sri Lanka, that the Ministry of Labour and Trade Union Relations is the Custodian Trustee of the Employees Provident Fund, with direct oversight responsibility vesting in the Commissioner of Labour and Superintendent of the Employees Provident Fund.”

“In terms of the aforesaid Trustee responsibility and overall oversight responsibility, the ensuring of economic, efficient and effective fund management of the pool of investments held in Trust for the members of the EPF by the Central Bank of Sri Lanka, lies with You, the Ministry of Labour and Trade Union Relations as well as the said Commissioner of Labour and Superintendent of the Employees Provident Fund.”

“In view of the controversies surrounding the bond investments by the EPF, which have been raised since February 2015 till to date, I appeal to you to initiate an Immediate Independent Inquiry, by persons with requisite Capability, Independence and Integrity, to assess the Operational Efficiency and Effectiveness of Bond Investments by the Employees Provident Fund (EPF),” he said in the letter, which was also copied to President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe.

Full text of the letter;

3rd June 2016

Minister W. D.J. Seneviratna,
Minister of Labour & Trade Union Relations,

Ministry of Labour & Trade Union Relations,
Labour Secretariat,
Colombo 5.

Dear Mr. Minister,

Initiate an Immediate Independent Inquiry to Assess the Operational Efficiency and Effectiveness of Bond Investments by the Employees Provident Fund (EPF)

You would no doubt agree, where as the fund management and administration accountability for the fund assets of the EPF lie with the Central Bank of Sri Lanka, that the Ministry of Labour and Trade Union Relations is the Custodian Trustee of the Employees Provident Fund, with direct oversight responsibility vesting in the Commissioner of Labour and Superintendent of the Employees Provident Fund.

In terms of the aforesaid Trustee responsibility and overall oversight responsibility, the ensuring of economic, efficient and effective fund management of the pool of investments held in Trust for the members of the EPF by the Central Bank of Sri Lanka, lies with You, the Ministry of Labour and Trade Union Relations as well as the said Commissioner of Labour and Superintendent of the Employees Provident Fund.

In view of the controversies surrounding the bond investments by the EPF, which have been raised since February 2015 till to date, I appeal to you to Initiate an Immediate Independent Inquiry, by persons with requisite Capability , Independence and Integrity, to Assess the Operational Efficiency and Effectiveness of Bond Investments by the Employees Provident Fund (EPF).

The aforesaid investigation must inter alia address whether, the fund managers and administrators of the EPF as well as the management of the Central Bank and Employees Provident Fund have

1. acted in keeping with the expected standards of professionalism, conduct and ethical behaviors and
2. acted without resorting to insider dealings and without market manipulations and related party interests, and
3. actively participated in primary market auctions, driven primarily by the need to optimize the interests and returns of the EPF stakeholders, and
4. made the best efforts in the interest of EPF stakeholders to secure optimum investment yields and capital gains from both primary and secondary market transactions
5. collectively or individually not been guilty of any misdemeanors, bribery and corruption, conflicts of interests, personal gains and related party benefits

In support of the above request, I enclose a Press Release dated 2nd June, 2016 issued by the Secretary of the Monetary Board, wherein the Central Bank of Sri Lanka, as the official fund manager and administrator of the pool of assets of the EPF calls for, (at this late stage after all the repeated controversial Bond issues have already taken place) actions, I and several other professionals have since March 2015 been calling for, taking account of the under noted very same suggestions now made by the Central Bank in the Press release;

1. Ensure greater transparency, effective and honest communications with the market participants, prior to and following bond auctions
2. Introduce international best practices, inter alia including volumes advertised and accepted at public auctions
3. Change management strengthening controls, and compliance mechanisms, systems and procedures adopted by the Central Bank in line with international best practices
4. The Employees Provident Fund to actively participate in bond auctions, with transparency, professionalism sans insider dealings and related party interests and with due accountability to the stakeholders of the Fund

I remain confident that this appeal made to you, in the interest of upholding transparency and good governance and delivering on the aforesaid Trustee responsibility and overall oversight responsibility owed to nearly 2.5 million members of the EPF, will receive your immediate careful consideration.

Yours Sincerely,
Chandra Jayaratne

cc. President
Prime Minister
Secretary Finance
Secretary Ministry of Labour & Trade Union Relations
Governor Central Bank
Secretary Monetary Board,
Commissioner of Labour,
Superintendent of EPF
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