18 October, 2017

Corruption & Resignations: Our Situation Looks Rather Pathetic!

By Rusiripala Tennakoon –

Rusiripala Tennakoon

There are many things happening in the world relevant to the modern context of things happening here.

Plato wrote as given below:

“What is right is right and what’s wrong is wrong  ………. What is fine, no doubt, is everywhere legislated as fine and what is shameful as shameful but not the shameful as fine or the fine as shameful”.

Politics is a dirty game. Why is it so categorized? Because it is a game mostly played by wicked players. These players have no heart or compassion for the large numbers who elevated them to the position. Those down trodden and oppressed majorities are paying a high price to watch the dirty game of politics. The electors’ expectations to free them from bondages and social miseries are shattered by the nefarious political game players. Politicians are not only failing to deliver the goodies but they are far distancing them from the basic ethics and moralities the public demand from them.

In such a scenario we are compelled to look elsewhere to at least find out whether things are the same everywhere. To our great consolation, there are instances which we can site as exceptional cases of good political leadership influencing ethical conduct.

Photo courtesy Ishara Kodikara and Facebook Foreign Correspondents’ Association of Sri Lanka 

The recently elected French President Macron has insisted that his ministers must be morally irreproachable. His commitment in this regard has been so well acknowledged that he has been nicknamed “Jupiter” comparing him to the all-powerful Roman God of heaven and earth who embodies a sense of morality and the obligation of duty to correct behavior.

Four of his newly appointed cabinet ministers including a President of his powerful coalition partner from Mo-Dem party resigned their ministerial portfolios due to allegations of corruption.  Bayrou, President of the coalition ally said before resignation to a press briefing, “that he had been the victim of an orchestrated smear campaign but decided to stand down to prevent the government being exposed to controversy”.

The ruling party declared that their departure has “simplified the situation”. No doubt the step was a relief to all concerned and the country at large. Some of the members of the party of the resigned ministers are at the center of an inquiry into misuse of funds from the European Union.

The Anti-Corruption Police is conducting investigations into allegations of “breach of trust and concealment of the offence”.

In Pakistan President Nawaz Sheriff stepped down when the Supreme Court ordered to remove him from office over allegations of corruption. Accusations against him were mainly based on the famous “Panama Papers”.

Michel Termor President of Brazil was charged for corruption and helping a young entrepreneur who has made billions of dollars by transactions with insider trading.

Most recently in Australia two of the ministers of Malcum Turnbull government resigned from their portfolios on alleged corrupt practices.

Stuart Robert was alleged to have dealings with a mining Co in which he has shares linked to a trust. The Company was found to be a generous donor to the Liberal Party.

And this Minister was engaged in negotiating a deal with the Company and has participated in an overseas trip to China in that connection. Although there was no intention according to him and the conduct in question did not directly relate to his ministerial duties, he resigned with the commencement of the probe against him.

The main count sited as a violation on his part was that he has acted inconsistently with the statement of Ministerial Standards!

Health Minister Ms. Sussan Ley resigned based on an expenses scandal against her. It was also revealed that she had not correctly accounted for her overseas travels in her tax papers, although there was provision for certain expenses to be allowed for such purposes legally. In tendering her resignation she made the following public announcement. “I accept community annoyance, even anger with politician’s entitlements and it demands a response…….” Whatever she has committed or what is remaining to be revealed, she bowed down most respectfully to public opinion!

In this context our situation looks rather pathetic! If we look back to the Central Bank Treasury Bond Scam which caused much alarm and concern in the financial market of the country, the response to such by our political authorities fall below any respected standards anywhere in the world. The shock waves it created throughout the nation spilling over to the international investors many of whom rushed to withdraw their foreign investments, was not of sufficient magnitude to arouse the conscience of those in authority under whom the alleged corrupt act was perpetrated.

This was one glaring incident with no parallel in the history, which received the highest and strongest patronage of the politicians to cover up the issue instead of paying any noteworthy attention to the public cry that erupted after the scam came to light.

The first event associated with the scam was the Bond auction held on 27th February, 2015. After officially deciding to call for investments up to Rs. One Billion, it has now being established that the Bank officials were pressurized to accept bids up to Rs. 10 Billion. According to evidence it has been revealed that they were asked to accept all bids submitted which amounted to Rs. 20 Billion. To justify this highly unorthodox directive the then Governor of the CBSL Arjuna Mahendran is reported to have stated two things. 

One, that the government was in need of additional funds going beyond what is estimated in the cash flow statement of the Treasury.

The other reason attributed by him is that the Prime Minister wanted him to do away with the direct placement procedure hitherto followed with regard to Bond Issues by the CBSL.

There have been questionable acts preceding the first Bond Issue directly related to the issue. On 24th February, 2015 the Economic Management Committee which is under the PM has met and taken a decision that the development activities of the country should proceed with available funds only.

But strangely on 26th February, 2015 a meeting has been held at the CBSL premises which was attended by Cabinet Ministers. Ravi Karunanayake, Kabir Hashim, Governor CBSL Arjuna Mahendran and some officials of the Road Development Authority. Mr. Malik Samarawickrama also participated this meeting, in his capacity as adviser to PM.

At this meeting, as reported the need for urgent additional funds for Road Development activities has been decided and identified an immediate requirement of Rs. 15 Billion for this purpose. When this meeting was held the CBSL had already announced the issue of 30 year Bonds to the value of Rs. One Billion.

There are several matters that arise in the wake of this state of affairs.

  • The creation of a need for an additional amount of money urgently to the extent of Rs. 15 Billion over and above the estimated March Cash Flow statement appears to be an ostensible move than a genuine urgency.
  • The directive to do away with the direct placement purported to be given by the PM as declared by Arjuna Mahendran is not a decision of the Monetary Board as it should be.
  • The intervention of the Governor at the time of closing the bids at the auction on 27th February, 2015 is unprecedented and becomes highly suspicious due to the fact that the beneficiary of his intervention has been his Son-in-law’s Company.
  • Governor Mahendra has taken another step that causes suspicion by intruding into a meeting of the Market Operations Committee of the CBSL on 27th February, 2015 in the morning, just before the Bond Auction and influencing the MOC to increase the bank rate with immediate effect. What is intriguing is that this directive by the Governor is in contravention of a decision of the Monetary Board taken earlier not to change the Bank rate.
  • The adverse effect arising out of this arbitrary action is compounded by the fact that this decision led to a disturbance of the market trends causing an artificial upward movement of interest rates.
  • When the Tender Board of the CBSL met in the afternoon following the closure of the Bond Auction on 27th Feb 2015 Governor CBSL has instructed over the telephone to Deputy Governor Samarasiri who chaired that meeting to accept the offers up to Rs. 10 Billion disregarding the limit of One Billion already announced.
  • The highly risk prone decision of the PM as per the instructions given to Mahendra to do away with direct placements and conduct the Bond Auctions to secure all fund requirements only by auction has caused unexpected volatility in the Bond market with a resultant adverse ripple effect to increase the interest rates.
  • The failure to investigate the alleged irregularities of the 27th February, 2015 Bond Auction has paved the way for the perpetration of a bigger fraudulent deal in March 2016 Bond Issues.
  • The strange and suspicious manner in which the EPF coming under the control of the CBSL has maneuvered to slip the bidding at auctions but has subsequently swept the secondary market at much higher states to the benefit of selected market players.

From the foregoing there is enough and sufficient evidence of lapses, shortcomings, irregularities and wanton decisions that cost the nation huge losses for which all politicians connected directly should be held responsible and therefore they must take steps to relinquish their public office with immediate effect.

Talking about the past is not the solution and such statements would be considered as evasive, red-herrings only to deceive the public.

*Rusiripala Tennakoon – Former Chairman of Bank of Ceylon

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Latest comments

  • 4
    1

    It is indeed a great shame that the future of millions of young Sri Lankans has been placed in the hands of a few hundred corrupt , inept , shameless politicians and their henchmen . Drug dependence is at an all time high , and no one knows what happens to all the Cocaine and Heroin seized by Police and Customs . There is speculation that it finds it way into the market . Meantime , the politicians have a field day , raping and plundering this beautiful island and its’ people with total impunity .

  • 5
    2

    Ravi is not hero. He resigned before he was thrown out. Many people talk connecting Ravi with the bond issue. He may not be involved in the Bond issue but, his rent paid by AA can be considered as a bribe.

  • 8
    0

    An important witness to the “Bond Scam” has been made a victim over a matter of a “rental apartment”. This witness must have been questioned at length on that “undated” letter that did not bear any file “reference” issued at the “request” of the then Governor of the CB. In addition, this witness also mentioned the names of several other “Big Wigs” who were in the know of that “letter”. Most importantly, all “Authorized” officials in the Ministry of Finance “denied” any knowledge of such a letter. In the “background”, it is reported that a group of Govt. MP s have met the PM and discussed the “behaviour” of two officials of the AG’s Dept. who are assisting the Commission. Is this some “Mafia” style operation already taking place to dislodge the investigative machinery on this “Bond Scam”? Isn’t it time to IDENTIFY the “GOD FATHER”?

  • 2
    0

    The key issues of CB-Bond scam has not yet recovered by even after leaving Minister Ravi Karunauake of Deputy Leader of UNP. In this field of CB Bonds has the potentials to be revolutionize that my understanding of the way financial marker work. It must certainly be that CB Bonds of surely burgeoning discipline of strictly of behavioral finance is essential in by clean governances. But not that under the current misrule and mismanaging of UNP of Bond market lost all credibility. As well as lost trillions of Rupees public funds and her growth of Nation Economy>
    It is far from clear how much of the UNP leadership joint hand with MS that mode of operation work in doubtful? Those who put faith of UNP leadership of “wisdom of honest” mean NO MORE than that a majority of large group of People is more like to make a Correct Assessments than a small group of supposed to be UNP’s experts?.
    The possible component is that majority PEOPLE of Sri Lankan asking that very question that overconfident and over-optimistic of Ranil Wicks clique keeps the crony capitalist engine in motion comes from leadership of UNP?
    The lessons we have learn past Bond scam of CB that UNP’ Ranil Wicks’ clique has start process of creative destruction is the essential fact about Sri lanka. We have already noted the high attrition RATE among Bond market. In some reasons banks or stocks companies do not fail, but that they are explicitly and implicitly protected from collapse by governments.

  • 0
    2

    Another point that has not mentioned in this article is why Aloysius, when he is the part owner of the company, his father being the other owner, stepped down just before this bond sale and appointed the second in command. He mya have taken a legal decision and they may prove it was nothing to do with oncoming bondsale and the way were planing to cheat the process. but, when legislators as well as top beaurucrats and responsible private companies are considered they should have business ethics too. Even though Maithripala Sirisena is very slow to take decisions, Perpetual Treasruries has a history similar to this. Besides the author of this article should have explained about the story of foreign investors withdrawing their investments because of this fraud was exposed. Another thing is this article does not explain why Ranil wicrmasinghe proceeded with a second bond sale exactly the same way when questions were arosed about the first bond deal. There are lot of questions about such as appointing three UNP lawyers to invesitigate it and trying to dissolve the govt in order to by pass the COPE report. Another important point, this ex-BOC chair man should have explained is why BOC involved in this bond deal via Perpetual Treasuries. It looks tha incumbant BOC chariman who ever it is did not have anything ethics, did not work for the benefit of the bank which is semi govt and peoples’ money I suppose, instead he became a part of the fraud.

  • 2
    2

    Another important point, Brazilian President and South Korean president had to quit becuse of Frauds. In Sri lanka, president had written legislation to protect him and he/she cannot be prosecuted. I say, if Maithripala Sirisena understands it and f he a true buddhist who understands precepts, he should change the rules so that if the previous president had been fradulent, that enables the prosecutuion. that is what everybody talks. Previous president had used, more than once, his powers to punish prosecution and to save the con-person..

  • 2
    0

    It is no defence to claim that bribery and corruption, and misbehaviour in public office is acceptable because ‘it goes on worldwide’. In Sri Lanka, our political leaders and ministers swear to uphold the constitution and protect Buddhism. They then break all the noble pillars of Buddhist by resorting to every trick in the book. When caught they behave with brazen impunity and resort to every trick to evade being ousted. Political power and opportunity to amass gains prove too much to resist. We expect too much of the people we elect to office. Sadly, our politics now only attracts those who want to serve themselves. Those who will genuinely serve the country are in a minority. Until we have more genuine and decent people come into politics and oust the crooks and shysters, expect more of what we have seen in these last few years.

  • 2
    0

    Lankans share Rusiripala Tennakoon’s angst “Politics is a dirty game…………..mostly played by wicked players. These players have no heart or compassion for the large numbers who elevated them to the position………….”
    He lista a few world events. The following comments on some of them
    Macron of France recently profiled Africa having civilization problems.
    Navaz Sharif exit is a deal. His brother will succeed him, he will NOT be prosecuted. He will stage a comeback.
    Malcum Turnbull of Aus leads a government running the most inhumane detention centres. His predecessor Tony Abbott said at the 2013CHOGM in Colombo that a little bit of torture is acceptable.
    The resignation of RK is a silver lining – the deal (whatever?) is the dark cloud.

  • 4
    0

    Politics is a dirty game because the players are dirty. There is no exception to the rule. When the politicians are more inclined to better themselves, how could they deliver the goodies. Why was Mahendra brought in as Governor from Singapore by the Prime Minister because there was none suitable for that post in Sri Lanka. Every damn thing is done in the government with an ulterior motive. and hence they cannot deliver the goodies.

  • 2
    2

    CT editor,
    Where did you find out this photo from?
    It reminds me of a gorilla in deep shit! Is this the face of the young UNP today? Did you see how other bond scammers act in parliament yesterday? It is time to dissolve the entire UNP without insulting former great UNP leaders such as DS, Dudley, and Sir John.

  • 2
    0

    Thank God the rights of the Middle-Eastern worker money has finally being realized! The Lankan common man has woken up at last, to defend his realm from his hard earned money being gamboled and gambled away in Kabali-film style (in association with World-bank)….and also in James Bond BRICS style. Honorable-Realism is what is needed for Sri Lanka.

  • 2
    1

    Dear Mr Tennakoon

    Thank you for being straight forward and being decisive.

    I am writing to you as a former chairman of BoC. The bank extended unlimited funding for the bond purchase – looks like just over a phone call.

    1Can the BoC approve Rs 10 billion funding overnight?
    2What is the process to be followed when approving such a substantial amount of funding ?
    3Why hasn’t the board of directors being called up to give evidence ?
    4What hasn’t the senior management called up to give evidence ?
    5Why hasn’t the Auditor a General raised the issue?
    6Why hasn’t the CBSL questioned BoC on this matter?

    Jagath

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