19 May, 2024

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Nandalal Weerasinghe’s Wages Of Sin

By Ameer Ali – 

Dr. Ameer Ali

It is difficult to find another instance in the history of central banking where the Head of that bank with conscienceless audacity abusing the constitutional independence of that institution to raise unilaterally the wages of his staff to such a height, between 36 and 79 percent, and made them an un-imitable elite of officers to be envied by the rest of the community of public servants. This is one of many and multiplying horror stories one hears almost daily from paradise Sri Lanka. At a time when millions of hard-working heads of ordinary families and parents are found skipping meals or eating smaller portions to feed their children, when 30 percent of five-year old children are found malnourished, and when the danger of starvation is knocking at the doors of the poorest, the unconscionable act of munificence by the big chief Dr. Nandalal Weerasinghe (NW) fits into the proverbial robbery of Peter to pay Paul. The Centra Bank’s notoriety continues unabated.

Between 2006, when an accountant and politician Nivard Cabraal was appointed as CBSL Governor by his own party leader and President of the country Mahinda Rajapaksa, and 2022 when the current chief NW with his sound expertise and experience in monetary policy was appointed by President Gotabaya Rajapaksa (GR), the reputation of CBSL had suffered immeasurably. The $200 million dollar loss over the Greek Bond fiasco under Cabraal, the scandalous bond scam under Arjuna Mahendran and overlooked by the current President Ranil Wickremesinghe (RW) who was the Prime Minister then, the surrender of CBSL’s constitutional independence to the economic whims and fancies of GR during the Governorship of W.D. Lakshman, and the second reign of Cabraal which was marked more for his avaricious struggle to receive a fat pension and cabinet position than to tighten monetary controls and bring down the escalating inflation, are some of the unfortunate developments which contributed to CBSL’s disrepute and consequent bankruptcy of national treasury and collapse of the economy.

The Governorship of NW coincided with the forced resignation of GR and his replacement by the unelected RW, and more importantly with the entry of IMF to repair the national bankruptcy. The new governor to his credit already had the experience of working with IMF in Washington as one of its alternative Executive Directors between 2010 and 2012.  It was therefore fortunate that IMF found the most suitable person as the head of CBSL who would implement the IMF agenda in full. As expected, the route to recovery began with measures to stabilize and restructure the country’s finance sector. Sri Lanka being a debtor nation and IMF being the super watchdog of the international financial system, one of IMF’s supplementary objectives was to stabilize Sri Lanka’s financial sector so that the country could strengthen its currency, reduce the escalating inflation rate and accumulate enough hard currency to meet its debt obligation to foreign creditors. But when those creditors insisted that the cost of debt restructuring should also be shared by domestic financial institutions NW readily complied but deliberately excluded the banking sector from that exercise while shifting the entire cost of domestic debt restructuring to saving institutions like EPF and ETF.  In other words, while he spared the rich the poor were forced to carry the burden. NW’s capital controls and tight monetary policies did indeed bring down headline inflation from around 70% to a single digit, which received kudos from IMF. However, that reduction did not reflect on prices paid by ordinary householders when they did their daily shopping. But that did not matter either to IMF or NW, and IMF recommended more autonomy to CBSL. A helpless government obliged by passing the CBSL Act no.16 of 2023.

The point to note here is that NW having registered some success in stabilizing the finance sector failed to realize or did not want to recognize that his monetary stabilization along with RW’s fiscal measures hit the poor harder than the rich. Now with his distorted interpretation of the ‘autonomy’ implied by the 2023 Act he created more money to enrich his staff than what the economy could afford. What happened to NW’s intellectual integrity and Buddhist compassion? His justification of the pay rise in terms of stopping brain drain does not hold much water in light of the Finance Ministry’s order to stop salary increases to public servants. Could he at least justify this increase in terms of increased productivity of his employees? To add an anecdotal note, during the 1960s when me and my colleagues were recruited as probationary assistant lecturers by the University of Ceylon our salary was Rs. 605 which was envied by our batchmates who were recruited by the Central Bank. They received much less than ours. That disparity has been turned upside down today. That should say something about the current exodus of academics.  In short, the pay rise offered by Dr. Weerasinghe to his staff are wages of sin.                      

*Dr. Ameer Ali, Business School, Murdoch University, W. Australia       

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  • 4
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    Refer to my comment under: Playing The Fiddle While The Country Burns!
    Nathan, March 9, 2024.
    Get rid of the present Governor of Central Bank. Find a better Governor.

  • 6
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    “…the scandalous bond scam under Arjuna Mahendran and overlooked by the current President Ranil Wickremesinghe…”
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    I see…
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    “In short, the pay rise offered by Dr. Weerasinghe to his staff are wages of sin.”
    .
    Yups – Sins…
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    “The Centra Bank’s notoriety continues unabated.”
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    The CBSL is begining to look more and more like the main culprit behind the economic crisis…. with the passing of each day…

  • 6
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    The Central Bank staff already receive above average wages. There isn’t anyone getting less than 100,000 p.m. That means they can live much more comfortably than others. That excludes the CEB/ CPC employees, who also receive a munificient salary. But that is negotiated by JVP unions, which the author understandably doesn’t want to criticize.
    But even the JVP unions don’t award a 78% increase to those already earning a million. If at all a raise was necessary, it should have been, say, a flat 25% all round.

  • 13
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    Paying themselves a few million rupees salary a month each in a starving country that now has around 33% poverty with the vast majority of people eating less and skipping meals every day is a criminal act. These are economic crimes, on par with bribery and extortion, or receiving commissions for foreign contracts given. One clear message in the evolving horrors of the once resplendent isle that was an idyllic paradise on earth is that the parasitic scum that destroyed and continue to destroy its people, their health and their children’s future must be made to pay for their sins. The sooner the better.

  • 1
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    I got this comment ready for Dr Ameer Ali’s earlier article,
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    https://www.colombotelegraph.com/index.php/npp-national-question/
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    but comments have closed there.

    ~~~~~~~~~~~~~~
    .
    Update from the Maldives, for “leelagemali”,
    .
    Yes, there is a problem with the first minute of the YouTube that you had given. But how were you to know? The YouTube has been put together by Nasheed himself, but the first minute is old footage. Please look up the Wikipedia entry on Mohamed Nasheed. He had divorced Laila in 2021. Wikipedia states that in the entry for Nasheed.
    .
    This is for his ex-wife:
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    https://en.wikipedia.org/wiki/Laila_Ali_Abdulla
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    Last revised on 19 January 2024, but it doesn’t speak of the divorce. My knowing about the divorce is what alerted me, plus seeing Amal Clooney.
    .
    I met Laila, too, in 2018, as I entered the Berjaya Hotel, before meeting Nasheed.
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    Nasheed is now based in Ghana with his new (younger, Maldivian) wife. I think that my friend said that the marriage was in Colombo, and this month!
    .
    I, Panini Edirisinhe of 51B, Golf Links Road, Bandarawela, (NIC 483111444V) take responsibility for the veracity of all this.

    • 0
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      This comment was removed by a moderator because it didn’t abide by our Comment policy.

      For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2

  • 0
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    “the scandalous bond scam under Arjuna Mahendran and overlooked by the current President Ranil Wickremesinghe (RW) who was the Prime Minister then,

    Evil granted impunity to various people for various reasons. But on the other hand, the Mahendran’s case was not overlooked, but there was no case, so Singapore refused to extradite him. It was like an international verdict on Mahendran, that he was guilt free; the Yahapalanaya government was framing it. It was a verdict on a Tamil outside the Sinhala Buddhist Jury only court system. That is the reason, from day one, the Tamil provinces were denied the Justice authority which is in the constitution. Amir Ali’s bias is indicating why, SLMC, ACMC like Muslim parties supporting the government on denying the provincial council’s justice. Locally It was investigated by an anti-Tamil Sinhala Buddhists, PCoI, it was a commission formulated by a higher authority than Evil Emperor. If Amir Ali didn’t come to know that and that is why now he is blaming Evil, then he has no quality to be a professor. That report’s selected pages were only published, limiting to accuse Mahendran’s family. Those pages attempted to establish it was an insider deal. The Commission attempted to accuse Mahendran as the culprit who purposely caused the government Rs 2 ⁄ 3 billion loss and asked Yahapalanaya to have brought him from Singapore.

  • 0
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    Separately Appe Aanduwa attempted to get their Rs11B amount certified as loss to CB from western experts, so the racist Aanduwa can have that recovered from Mahendran’ Singapore properties. But the expert in contact explained a “normal unrealized loss”’ subject to perceived demand and supply; so, cannot be calculated. In other words, just for example, if the discount rate was 1% bond holding banks might have subscribed only for Rs 1B, if the discount rate was only 2% then B, if it were 5%, might have been 5B, as the actual rate the bonds issued were at 12% Banks subscribed to 11B. The foregoing is only for a talk to show how the discount is connected to Total subscription, but it is not possible to work it out with any math formulas. In reality because the high discount rate CB was prepared to offer, brought a larger amount of subscription, this kept total probable loss as high. Further it cannot be treated as a loss because in economics, if you have high demand for loan, the cost of loan will be high. Instead of Langkang throwing that money on negative earning white elephants projects, if they have put on projects that earn 18% ROI, their profit might have been 6%. It was only the government’s fault that the money was not put to appropriate use.

  • 0
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    The government had the freedom to return any unwanted subscription. But the Government decided to issue bonds for all subscribers. Unfortunately, to the imbecile Sinhala Buddhists’ calculations, that was the amount the Central Bank lost to PTL. What the point here is After Rowdy Royal, Rowdy Rambo like people swindled enough to go bankrupt, it is not an issue for UNP-SLFP, supporters of SLMC-ACMC supporters. But they contradict international experts on real economics. But insist on their own economics, it with which they bankrupted the country. They use that to serve justice to Tamils also. The bastides did not compensate Tamil for the annual pogroms they have been celebrating on Tamils’ hard-earned money or for the physical torture they endured. Sinhala Buddhist do have the same feeling when they burn Tamils properties time and again with the feeling Evil Emperor had when he was burning the proposed year 2000’s constitution. Even after Buddha has proved to Evil that the Karma is real by burning his library for UNP had burned Tamils library, he cannot still get the ordinary human feelings or compassion. I frequently wonder if they cannot sense the reality of Karma, then why do they cry on the loudspeakers Buddham Saranam Gacchami, day and night not allowing the sick people to sleep while school kids study?

  • 0
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    Though the transactions were handled through PTL’s private books, the deal of that bond sale was made by the finance minister Ravi Katunayake, who was in the court books for his past bribes and other racketeering accusations. Media reports claimed Ravi was on the call, previous nights of the auction day, as late as 12:00 AM, with the Banks’ executives and investors. At that time PTL was the investment agent and consultant for many ministers and parliamentarians. Old Rowdy Royals included in this clientele list. The media at that time described Aloysius, the owner of PTL, as a personal friend of Playboy Minister; may be something like a classmate. Mahendran, a Singapore Citizen was hired through Aloysius, who is Mahendran’s Nephew. At that time the treasury was bankrupt, White Flag Murderer administration urgently needed Rs 1B to take care of that month’s imports. A lower discount rate would not have raised any money because of the unworthy condition of the treasury and its credit rating. That was the reason CB board, President, Prime minister, Finance minister all agreed for a high discount rate. They did not select PTL on an open tender, they selected it on some international negotiation. In that condition, if Mahendran had come to know the discount rate and had passed it to PTL, it was only a privilege to PTL, not insider information.

  • 0
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    PTL was the only agent that handled the bond issue. The insider issue arises only if PTL have had an unfair advantage over another broker-agent. There was none. Here a monopolistic situation was built. So, the entire Financial Administration section of the Yahapalanaya government got together and gambled, to Rs 10B bonds. At the auction, PTL received a quotation for Rs 11B, more than the amount offered by the actual needed amount of that time. After coming to know well what was the underwriting and selling prices of PTL,it was decided by the government to issue bonds for the full subscription. The matter that a reader has to understand is if any of the financial experts in the auction from CB had honestly believed the PTL was badly over discounting the bond, they could have taken only the needed amount, that is 1B instead of issuing for all oversubscribed amounts. Then it was said about 112 to 178 checks from PTL bank accounts were issued to Ministers and parliamentarians, that was apparently profit sharing, not disclosing the true partners to the IRA. That was the only illegal action PTL committed. PTL should have disclosed the potential tax payers who were making income by working with his firm, on the IRA prescribed forms.

  • 0
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    But the Checklist from the PTL book was frozen by the White Flag Murderer president, when he was freezing the investigation report. That conduct can be challenged in any reasonable court, the whole CB’s Sinhala Buddhist Financial Executives, Finance Ministry, Prime Minister and the president were scheming to rob from an already bankrupt treasury and load it on a foreign National. At that time SLFP was manning the opposition and the government, simultaneously with the name of Joint Comedy club, by the current prime minister. The oppositional back benchers kept agitating to bring back Mahendran from Singapore based on the unfrozen part of the PCOI report. An eradication report was sent to Singapore in 20,000 pages. Singapore picked up the mood of the Langkang Appe Aandu from the 20,000 pages of evidence to retrieve an accused cohost of a fraudulent transaction. So, Singapore promptly ignored this game of Langkang political parties and simply said “NO” to their request. Mahendran team’s defense that they only followed as procedure established in CB during Old Rowdy Royals’ time. This triggered an audit of those past records and found evidence that during Cabal’s time as governor, 1,000 larger issues were done with the same procedure, but Old Royals had the whole profits for them, no profit sharing with the Sinhala Muslims ministers and parliamentarians, unlike the PTL did. But those reports were 100% frozen.

  • 0
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    Further, later Mahendran was instructed not to allow the CB executives to review Old Rowdy’s time’s records. But Mahendran time records were continued to be audited and many Tamil employees were accused of collaborating with Mahendran and they were fired. I don’t know the end of it. But they didn’t have Singapore’s protection, so whether these minor employees’ assets were improperly confiscated or not is not known. But the Hitler King Administration forcefully withdrew the PTL’s deposits, towards a court case without a judge’s order. It is really very strange to note that Dr. Amir Ali has nothing to comment on all these but trying to be too smart in concocting a story that Evil saved Mahendran with impunity, no count to Singapore’s rejection for extradition claiming that the submitted paperwork did not establish any crime on Mahendran. That was the story when Cabal cleaned the CB and left in 2015, the Appe Aanduwa cleaned Tamil Employees from CB and cleaned PTL though all the ministers and Parliamentarians got the shares from PTL on the bond sales was not identified and asked to return the money.

    There is a resolution in UNHRC that the country’s rulers are responsible for its bankruptcy of the country, though Lalavinotham Nandalala denied the country was in any bankruptcy. Locally there is a court verdict that the rulers were responsible for bankruptcy.

  • 0
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    But Evil is not acting on them. Dr. Amri Ali to expose his anti-Tamil feeling, saying that it was Evil who saved Mahendran.

    “We sought a declaration from the court that the mishandling or inaction on the economy by the former heads of state and senior officials did violate the fundamental rights of people,” Transparency International lawyer Nadishani Perera told AFP news agency Tuesday.

    “We have received that. It is now up to the citizens to take any further action.”- As a social service institution TISL worked up to the guilty verdict.
    Instead of Dr Amir concocting charges on Mahendran, can potential public organizations file a class action for the losses the individual and Businesses incurred, from the $30B investment Roway Royals have world cover?

    It should be the NPP’s responsibility to investigate Central Bank Frauds and have all who were involved in that fraud and frauds happen on all other bank dealings. This should include the Bonds local holders Cabal redeemed after the country defaulted on foreign payments. Those who find fault on Mahendran are forgetting that it was Mahendran and Aloysius who helped the Evil Emperor to keep the IMF in low profile and ignore their belt tightening conditions, until China came forward and paid 1.5 B for Hangbangtota Harbor and % villages land.

  • 0
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    There was a monopoly situation; There was no opportunity for insider deals to exist. If one like that was found, there was no proof that Mahendran only passed it to PTL, while Aloysius was a private consultant for those ministers. Ravi’s wife had lived in the house Aloysius rented for Ravi’s family. CB did not minimize the loss, after the auction started. They issued the maximum number of bonds, while they were not obligated. Like in the 4/21 Jihadi war, the Bond scandal included the cabinet, central bank, subscribing banks, parliament…… Out of those all trying to punish Mahendran and Aloysius is exactly like in 4/21 Jihad, Muslims and Sinhala Buddhist want only to punish Pillaiyan because he is Tamil. But the Muslim – Sinhala Buddhist government created and used Saharan group Jihadis. That is why the Cardinal is still insisting on honest investigation into that.

  • 0
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    Dear Ameer,
    .
    I’ve re-read your article, and I find your “anecdotal note” very significant. Rs 605/= today sounds so paltry, and you say that those who joined the Central Bank then got much less.
    .
    I must confess that I’m always rather confused about Economics.
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    What you say seems to be the problem with Trade Union agitation. Being “decent” people we don’t object when others are given salary increases. We don’t tie it up with the fact that we haven’t been given anything extra. Until it gets outrageous as now.
    .
    Isn’t what we are paid always valuable because it is relatively more than others get? When slaves are very poor, they will work for what seems almost nothing to us. Give increases to all, and there is rampant inflation.
    .
    I want to say something about my experience, but I’m so unsure of myself that I will make it a separate comment.

  • 0
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    Dear Dr. Ali,
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    Is Centra Bank the name of the newly privatised CBSL?

  • 0
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    It looks like the time has come to scrutinize the inner workings of the Central Bank of Sri Lanka (CBSL) and the role it has played since its establishment in 1950 in the banckruptcy of the nation that is identified as Sri Lanka, without which any just progress of the country is questionable.

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