30 November, 2020

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Ranil Rants, Raves & Knots Himself Up

By Malinda Seneviratne

Malinda Seneviratne

Malinda Seneviratne

Prime Minister Ranil Wickremesinghe has come out with a lengthy speech on the vexed matter of Treasury Bonds. He has defended Central Bank Governor Arjuna Mahendran, pledged an investigation in the interest of affirming that there was no wrongdoing, defended the composition of the panel appointed to investigate and cast aspersion on several individuals and groups.

It is good that Wickremesinghe has broken his silence on this issue. It is good that he has decided that an investigation is a good idea. It is good that he has sought to explain what he claims really happened. It is extremely good that he has flagged certain questionable practices of the previous regime and Mahendran’s predecessor Ajith Nivard Cabraal. It is good that he has named names, even under cover of Parliamentary. There are things unsaid, however. There are measures that ought to have been taken but have not. And there’s a lot of dodging that does not cover him in glory.

Let’s get the easy stuff out of the way. Since he has named names Wickremesinghe is now honor bound to initiate proper and criminal investigations into the activities of the named. Since he has been an ardent opponent of shoving tough questions under a carpet called ‘commissions of inquiry,’ he should not take that easy path to save friends who betrayed trust (let’s assume) by indulging in wrongdoing.

Ranil with mediaIn the rush to name names, he has confused wrongdoer with people who may be tough to work with but whose integrity is nevertheless unquestioned. That’s wrong. Now he has to investigate such individuals as well and if he does this he is likely to come off as a reckless accuser, a man with an axe to grind and one of very little substance.

Let’s get to the composition of the inquirers. Wickremesinghe has not objected to the charge that they are members of his party.   When the Leader of the UNP gets UNPers to investigate charges leveled against a Governor he appointed, there is obviously a conflict of interest.   It is scandalous that a senior politician and a lawyer missed this. Instead of addressing the issue Wickremesinghe chooses to shoot the messenger. It is shocking that Wickremesinghe accuses the accusers of having vested interest, in this context.

Let’s get to the bonds. A point that has been largely missed by those commenting on the issue is the fact that there was a Rs 80-85 billion maturity which came up or is coming up. The Governor either didn’t know about it or knew about it very late. We don’t know if Mahendran held his head in his hands and if he did it was due to being ‘shocked’ by this piece of information. But he done exactly that, he has no one to blame but himself. It may have been due to the fact that many seniors in the Bank were sidelined because they were thought to have been close to his predecessor. All based on stories, obviously. If they had been unprofessional they should be appropriately charged and investigated. That didn’t happen. The lack of information may have resulted in Mahendran being hit between the eyes. That’s what happens when politics overrides professionalism.

Indeed, one wonders if there’s any professionalism at all here. The previous regime followed an erroneous methodology where small amounts were issued to the market while the majority were private issues, as Wickremesinghe correctly observed in his speech. He claims that they were issued at favorable terms in the private placement, but this contradicts the general understanding that they were issued at the weighted average. What is important is that the majority were to state funds and foreign investors. A significant amount went to the EPF. There was no benefit to private dealers whose constant appeal had been and is ‘let the entire demand and supply be sorted out in the market’ so that the Bank cannot decide arbitrarily. However if they were, as he claims, issued at a high rate it means the primary dealers were conned. Another issue that warrants investigation, please note Mr Wickremesinghe.

There have been instances where the Bank mentioned 1 billion and sold 2. They did accept more that what was on offer but the rate remained close to the previous week’s weighted average rate. Primary dealers had, however, information about tenure and yield. In other countries cut off rates are published. The Bank hasn’t done this, perhaps to keep the rates down which of course does not favor primary dealers. If there was any ulterior motive, part of it would have been, to put it crudely, to screw the market and benefit the state. In this instance the yield actually rose 300 basis points from what was expected. The Bank compromised the state, therefore.

Previously, the Bank would maintain a dialog with investors, nurture investor confidence and exert moral pressure to bid low. The primary dealers typically bid a little above the market. To insinuate that primary dealers are a cartel or a mafia is wrong. However, if they indeed are a mafia or a cartel then it is now incumbent on Wickremesinghe to investigate them. If he cannot prove it then of course there’s more egg coming on to his face.

Mahendran has expressed the position that the market should determine the interest rate. This is correct on principle. However there is this ‘thorny’ reality that the EPF makes up 60-70% of the market. So the EPF can be used by the Bank to fix the market rate. However a low interest rate thus obtained would mean low market activity, which does not help. The Bank has to take the EPF out of bidding so that the market is not distorted (as long as EPF funds are managed by the Bank). Right or wrong, the bottom line is that there should be a) policy clarity, and b) information should be released in advance. It is clearly out of order when you get people to put in bids based on operating procedures and practices and then change the rules once the bids are in based on changes in ‘want’.

Wickremesinghe admits that this is what happened. He says that it was discovered that a vast sum of money was required to pay off contracts. Well, if he (or the relevant minister) didn’t know this and didn’t inform him or the Governor in advance, that’s unpardonable incompetence. It is indeed strange that Mahendran, when the gooey stuff hit the fan, chose to talk about his son-in-law’s resignation as a director of the company under scrutiny and not about this sudden money-need of the Government. Wickremesinghe himself or Eran Wickramaratne, the minister concerned, could have mentioned this three weeks ago. They did not. Why not?

It goes without saying that bonds are not the only way to find money. The bulk anyway goes to state institutions. Perhaps Wickremesinghe didn’t know how to deal with the problem. However, now that he has mentioned it, it is clear that he has implicated himself as being party to whatever wrongdoing that took place even if he doesn’t benefit personally. Since it is highway contracts that are at issue here, two things need to be said. Such contracts are rarely if ever honored on time. Secondly, there are low cost ways of dealing with the issue. The Bank’s job is to find money for the Government at the lowest possible yield and at an acceptable risk profile. A prudent debt manager would not lock in 30 year borrowing at a high yield. Wickremesinghe would be hard pressed to name a single corporate entity that will borrow 30 year money on 12%.

The Prime Minister points to an instance when there was a bond auction in 2013 where Rs 16 billion was raised though 5 year bonds at 11.42%. Again he mentions the matter of ‘private placements’ ignoring the reality of who the relevant entities were. He also forgets that while in the Opposition his party members bemoaned high interest borrowings of the previous regime. He says nothing of the ‘logic’ of long term borrowing on high interest. In any case that was a different time, a different context and different market realities. Using it as a justification for what the Bank did is nonsensical.

The Government (and the President is complicit here courtesy his silence) has to do better than the previous regime. The Governor has to do better than take leave and let friends of his appointer bail him out.

As things stand, there won’t be betting on the outcome of this investigation. Wickremesinghe has made sure that a friendly determination will be yielded. To say the least, it is a poor show on his part.

*Malinda Seneviratne is the Chief Editor of ‘The Nation’ and his articles can be found at www.malindawords.blogspot.com 

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Latest comments

  • 11
    22

    Any day RW and cabal (warts and all)is preferred to MR family & cabal.RW hopefully will learn from this CB matter.

    RW must have many on his radar now on.He has invited trouble by bringing in questionable people,most recent being Kataragama nilame.

    • 6
      20

      Malinda Seneviratne Mahinda Rajapaksa Shill and whitewasher,

      Looks like the backbone less Ranil Wickramasinghe has crept into Gotabaya Rajapaksa’s pocket?

      Was it the deal made with MaRa Mahinda rajapaksa during the early hours of January 9, 2015 when the coup did not materialize?

      Malinda MaRa shill, can you find out from Gotabaya and Mahinda Rajapaksa?

      • 2
        0

        Malinda Seneviratne,

        Sri Lanka’s defence secretary, Gotabaya Rajapaksa, says General Sarath Fonseka will be executed.

        Can you write about this, now that Ge, Sarath Fonseka has been Promoted for his contributions towards ending LTTE Terrorism.

        https://www.youtube.com/watch?v=RoqPyuE0gpk

        This is hot.

        Do you need permission from your sponsor?

  • 10
    20

    It is very clear Ranil Wickramasinghe govt is no different from Maahinda Rajapakse govt. Ranil Wickarmasinghe has governed very much the same way that previous govt did.

    Besides, Ranil Wickramsinghe is justying what his hand-picked bureaucrats did because the previous govt had done worse things.

    Only dillmma is Ranil Wickramasinghe govt just began it.

  • 12
    24

    Malinda should write an article about himself first.

    While I do not wish to jump to RW’s defense, I am amazed by Malinda’s total lack of any shame.

    Malinda Seneviratne does not have any moral credibility on these matters.

    While the now deposed dictator, his corrupt family & cronies were looting this nation for nearly 10 years, Malinda was busy white washing all their crimes.

    Cheers!

    PS: Malinda, please go track down fugitive Basil Rajapassa first. Thanks.

    • 5
      2

      Ben, Don’t get personal and be vengeful against this author, although I agree with you that he deserves it.

      We should only discuss this article and not the author and attack him. The article is a fairly accurate one. So give the man credit..It is factual and this is his duty.
      Well done.

      Read this from the Island.
      https://www.colombotelegraph.com/index.php/ranil-rants-raves-knots-himself-up/

      Sunday newspapers is full of Mahendran and his in laws Aloycious. Mahendran is a Tamil disgrace and is hurting the best friend he has. RAnil W. This is scandalous and also by his elderly parens, Children and grand children. What damages and a disaster to a respected family and relatives.

      Donald Gnanakone
      Tamils For Justice.

    • 1
      3

      Ben Hurling:
      I’m afraid I can’t agree with you when you say, “Malinda Seneviratne does not have any moral credibility on these matters.”
      You are wrong. He has no moral credibility of any description on ANY matter.
      He is a disgraceful shill and CT should stop publishing his apologias for Mara on the grounds that they are a source of pollution, no less and no more.

  • 11
    18

    We are looking forward to your next article on the 10 billion Dollar swindke of your Sinhalese Budhist Hero MR.

    At keast Ranil is running an investigation and not giving you a car and lsp top for pumping our racist rubish.

  • 11
    14

    Mahendran and his son-in-law should be charged for insider dealing. Ranil is now trying to cover-up his friend’s misdeeds.

    Leave of absence for Mahendran is not the answer. He should be sacked immediately and charged for complicity in insider dealing. Ranil got for Mahendran dual citizenship overnight while many thousands of deserving Sri Lankans living overseas are denied this opportunity. What is special in Mahendran? There are other Sri Lankans more qualified than this guy.

    Ranil appointed his friend to the Central Bank Governor’s position hurriedly while decrying the past appointments made by Mahinda Rajapakse. This loser Ranil will permanently damage the interests of Sri Lanka and pawn the country to the Americans and the Indians. His actions in kicking out China will ruin the ecnomy of Sri Lanka. Ranil’s masters United States with its own economic difficulties will not be able to bail out Sri Lanka.

    • 2
      3

      Ranil would have set a better example if he chose a senior from the Central Bank or Finance Ministry as the Governor – a refreshing and welcome departure to the financial nondescript junior accountant Cabraal, who played pandu during his entire tenure. That would have taught Mahinda and other future rogues how governance should be conducted.

      I believe till A.S. Jayawardena they were all from within – with the exception of Mendis from Hayleys, himself a honourable and senior accounting professional. Mendis judiciously kept away from trouble and scandal during his brief stint.

      Backlash

  • 8
    14

    Malinda, just relax. There is an investigation going on, besides there is a lot of public opinion created through the press freedom you now enjoy. Dwell on that.

    While disgusting journalists sang their hosannas to the last régime (you couldn’t be one of them surely, could you?), the country was bled dry and looted. No wonder there were so many projects created, all in the name of development. Each time a project was launched, some bank accounts held overseas profited. Meaning, they were busy looking out for the next project to launch (never mind the damage caused) simply because there was money in it for them. Never mind the carbon footprint, environmental damage and suchlike. It is said that even before some projects were completed, the project money was paid up front. Got it?

    There are some fellows who need to answer to all of this. Perhaps your next article should be titled “Where is Basil?”. The day you do that, you will be read.

  • 8
    8

    Well stated, Malinda, for Ranil has made sure that his credibility is in tatters and one hopes that his blunders will not harm what the ‘Maithripalanaya’ promised. However, why is it you never made a murmur about the incredible scams and felonies committed by MR, his brothers and Cabral – to mention just a few?

    Doesn’t it bother you that your double standards (hypocrisy?) destroys your credibility as well? Or is it, as you said “..That’s what happens when politics overrides professionalism”?

  • 6
    11

    Clear cut case of conflict of interest.

    Ravi K jumped the gun to state that no wrong has been done even before the committee met.

    Harsha is under the hub since he was the strongest critic of Nivard.

    Ranil is appointing his own henchmen to investigate.

    The ideal committee would have been:

    Ranjith Fernando ( NDB)
    W Wijewardhena (CBSL)
    Senanayake (IMF)

    Even though all of them are pro UNP there is much more credibility.

  • 10
    10

    In fairness to Malinda, he has raised some very pertinent
    points about Prime Minister Ranil Wickremesinghe. See
    the litany of blunders in his Yahapalanaya Government:

    1. He shoots his mouth off about firing at Indian fishermen
    straying into Sri Lankan waters. Must one say India is
    concerned. What if they reciprocate when Lankan fishermen
    stray into their waters.

    2. He made statements about the Colombo Port City project
    that has offended China.

    3. He prevented the arrest of Gotabaya Rajapaksa for wrong
    doing, as revealed in the Colombo Telegraph.

    4. He has named a questionable character like John Ameratunga
    as Minister of Public Safety. He was paid by the Rajapaksa
    government. He served in his official delegations when Rajapaksa
    travelled abroad. Ranil publicly admitted that he gave permission.
    How on earth can he give permission to a UNP MP to go in a
    government delegation. He has forefeited his right to be in
    the opposition.

    5. He named another crook Wijedasa Rajapaksha as Minister of Justice.
    Anura Kumara Dissanayake exposed Wijedasa supporting Avant Garde
    case at public meetings.

    6. Ranil has taken cover under parliamentary privileges to name and
    insult journalists. They have no way of responding. What is wrong
    in a journalist asking him to resign when a whole country wants him
    to do just that.

    7. In the same statement Ranil has antagonised the private sector in
    Sri Lanka. He has placed all of them in one basket and threatened them.

    8. Despite lofty claims of arresting the corrupt and the inept, only two
    were remanded and released. One was Palitha Thevarapperuma UNP Kalutara
    District MP. This is because Palith opposed Ranil. The other is Tissa
    Attanayake, former UNP General Secretary. Sarana Gunawardena is a stray
    case for defrauding some person. What has happened to Mahinda Rajapaksa
    and his family members about whom UNP speakers made several promises
    during the election rallies.

    9. Ranil is repaying his debt Rajapaksas. MR helped him when he was Leader
    of the Opposition. They were in touch with each other every week.Now
    Ranil is paying back.

    So what can the public expect? Whatever hosannas are sung by his cronies
    and catchers, Ranil has been a dismal failure as Prime Minister. He should
    go. If he does not, wait and see, he will get thrown out.

    • 4
      0

      Michael we all have to admit that Ranil is the best person to lead the country at present.He is intelligent,very knowledgeable, and most of all he is MR.CLEAN not an inkling of corruption. He is not hypocritical carrying babies to win the votes or donning the National Dress as some do to fool the masses.The mere fact that he wears the coat and tie even though it maybe detrimental to winning votes boasts of his sincerity. He may have shortcomings as being slightly arrogant but the other positive straits he possesses makes him the ideal to lead the nation.See how his diplomacy has made the EU to rush in and hopefully restore the GSP facility with the potential of the garment industry getting a further boost resulting in more employment.

      We need people of the category of Ranil to put the country on track and lets stop bickering and throw the lot behind him and be ready to overlook some of his blunders as his positive acts supersede any of his shortcomings. This is of course if we are interested in making Sri Lanka the “Real Miracle of Asia”

  • 3
    11

    [Edited out] Malinda

    The least shameful thing you can do is to just go away. You have been singing hossannas to the Medamulana Mafia for ten years. You have no credibility: even if you say the sun rises from the East.

    Just go away. You are a liar. An occasional truth uttered makes no difference.

  • 5
    11

    We are happy more exposures on this CB Bond issuea d let us await the findings of the the committee investigating.

    We all know Malinda is MR crony. He could not see, hear or smell how the country was taken for a ride by the family during the past 10 years. Corruption was at the peak and may be the unestimated amount swindled may be a world record for a small economy . How did thess guys like, Malinda, DJ miss these instances. Has Malinda ever made any remark of the misdeeds by the previous regime?
    Maybe he feared the white van or he was also a beneficiary of the loot, may be some bones!

    The country reached this level of corruption mainly with the aid of white washers like Malinda. Get lost Malinda.

  • 3
    3

    During the past sixty days of the Jahapalanaya not a single fraud or a mega deal has been exposed by the previous government dispite the din,but the man himself has been caught with his hand in the pot! Jayawewa.

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