The Samagi Jana Balawegaya today lodged a complaint against People’s Bank Chairman Sujeewa Rajapakshe over an alleged act of professional misconduct violating the Banking Act.
MP Mayantha Dissanayake, the Chairman of the youth movement of the party, handed over the complaint to the Director of Bank Supervision of the Central Bank, the regulatory authority of the People’s Bank. In his complaint, Dissanayake said Rajapakshe had applied for a Working Capital Loan of Rs.23 Million under the Saubagya COVID-19, seeking a loan on behalf of his Accounting Firm BDO Partners to make salary payments and utility bill payments for the two-month period of March and April 2020, during the COVID-19 Pandemic.
The complaint also said, “In terms of Section 47(5) of the Banking Act, “a licensed commercial bank shall not grant any accommodation to a concern in which any director of the licensed commercial bank has a substantial interest, being an interest acquired either before or after the appointment as the director, unless such security as may from time to time be approved by the Monetary Board is given and such accommodation is sanctioned at a meeting of the Board of Directors of the licensed commercial bank by the votes of not less than two thirds of the number of its directors other than the director concerned.”
As the Managing Partner of the Accounting Firm of BDO Partners, Mr. Sujeewa Rajapakshe appears to have a substantial interest in that business concern. Therefore, the Board of Directors of People’s Bank should have ensured that the facility is granted in compliance with the Determination by the Monetary Board of the CBSL of 11 February 2005 which sets out the approved conditions for loans to directors of banks (see annexed copy of CBSL Determination of 11 February 2005).
Tellingly, the Deputy General Manager – Risk Management Ms. Roshini Wijerathna has made a hand-written endorsement in the Board Paper stating that the Board of Directors ‘must approve as per the Corporate Governance direction of CBSL’ which appears to have been disregarded by the Board of Directors of People’s Bank at the time of approving the loan, according to the media report.
As a reputed chartered accountant and also the Managing Partner of BDO Partners, a leading accounting firm, Mr. Sujeewa Rajapakshe cannot be unaware of these regulatory requirements stipulated by the CBSL.
If Mr. Rajapakshe has acted in violation of the regulatory requirements of the CBSL by disregarding the Determination of 11 February 2005 and/or any other regulations, it is tantamount to grave misconduct on his part as Chairman of the People’s Bank.“