Good governance activist and former chairman of the Ceylon Chamber of Commerce, Chandra Jayaratne has warned President Maithripala Sirisena that due to the bad governance at Central Bank, the good governance government is facing its biggest credibility threat.
In a letter addressed to Sirisena, Jayaratne reminded how civil society and media protested early in the administration under his leadership, when a purported bond scam was reported at the end of February, 2015.
“Despite investigations by a Committee appointed by the Prime Minister and later by COPE, the elections of August 2015 intervened and there was no further progress despite several promises of further action. Civil Society efforts to have a Judicial review via a fundamental rights petition was also frustrated by not gaining the right to proceed. Financial media, financial analysts, securities management professionals and intellectual voices of advocacy prevailed long after these initiatives but regrettably brought forth no redress. The Monetary Board did not actively investigate nor initiate necessary additional controls and process changes to reverse the several weaknesses pointed out by civil society advocates and professionals,” Jayaratne said in his letter.
He also highlighted about the strong possibility where the latest bond issuance this year is also riddled with continuing bad governance practices. “These include facilitation of interests of third parties via information leakages and questionable collusive transactions by managers in State-controlled entities. These deficiencies in ethical conduct and professional integrity are believed to have resulted in avoidable losses to the State, State institutions, the public at large and stakeholders of institutions such as the Employees Provident Fund,” he said.
Jayaratne warned Sirisena that the continuation of such practices reflects poorly on his administration and leadership.
We publish below the letter in full;
President Maithripala Sirisena,
President of Sri Lanka,
Dear Mr. President,
MAINTAINING PUBLIC CONFIDENCE IN “YAHAPALANAYA” IN THE FACE OF PURPORTED CONTINUING MAL PRACTICES IN BOND ISSUES
We in civil society are heartened by your May Day speech and recognize your commitment to good governance and to take hard action against actors and actions that are detrimental to peace, harmony and equitable socio-economic development.
We are unanimous in our view that the purported bad governance practices occurring in the issuance of long dated bonds by the Central Bank remains the biggest potential threat to the credibility of good governance by the government under your leadership.
Civil society and media protested early in the administration under your leadership, when a purported bond scam was reported at the end of February, 2015. Despite investigations by a Committee appointed by the Prime Minister and later by COPE, the elections of August 2015 intervened and there was no further progress despite several promises of further action. Civil Society efforts to have a Judicial review via a fundamental rights petition was also frustrated by not gaining the right to proceed. Financial media, financial analysts, securities management professionals and intellectual voices of advocacy prevailed long after these initiatives but regrettably brought forth no redress. The Monetary Board did not actively investigate nor initiate necessary additional controls and process changes to reverse the several weaknesses pointed out by civil society advocates and professionals.
Unfortunately, there is a strong public perception that long dated bond issues in 2016 are also riddled with continuing bad governance practices. These include facilitation of interests of third parties via information leakages and questionable collusive transactions by managers in State-controlled entities. These deficiencies in ethical conduct and professional integrity are believed to have resulted in avoidable losses to the State, State institutions, the public at large and stakeholders of institutions such as the Employees Provident Fund.
The stubborn rejection of transparency by the Monetary Board/Central Bank regarding large State transactions with private entities is a sad reflection of the commitment and integrity of those leading the relevant State institutions. The continuation of such practices too reflects poorly on your administration and leadership.
In the light of above, I urge you to please take immediate executive action outlined hereinafter;
Appoint a Presidential Commission with terms of reference to review the issuances by the Central Bank of bonds of duration 4 years or longer during the period 1st January 2015 to 30th April 2016. This review should also include such bond issues which were cancelled or where all bids were rejected.
The Commission should determine whether
- the yields offered on issued bonds were in keeping with prevailing market interest rates and whether bonds were issued at abnormally high yields and were subsequently sold to State-controlled entities within a short period at much lower yields thereby unjustly enriching persons or institutions in the private sector, at the expense of the State, State institutions or the public.
sources within the Central Bank or outside have colluded with any parties in the private or public sector and leaked confidential information regarding such Bond issuances prior to bids being closed.
- any official of the Central Bank, the State, State institutions, State banks, State-controlled financial institutions, any provident, pension or thrift fund managed by the State is directly or indirectly responsible for any malpractice that caused a loss or opportunity cost to the State unjustly enriching any persons or institutions in the private sector
- the members of the Monetary Board have been provided with adequate information by the Central Bank staff and whether the Monetary Board has taken specific actions from February 2015, when the public outcry on this issue commenced to date in order to ensure best practices in the issuance of Treasury Bonds
Panel of Professionals:
Appoint a Panel of Professionals with integrity, in-depth practical knowledge, capability and experience in treasury management, bond market operations, fund management and other relevant fields to advise the Presidential Commission on all aspects of their investigation and also on change management processes, enhancing controls and compliance mechanisms
Right to Information:
Instruct the Monetary Board to honour the public’s Right to Information Requests and issue executive instructions to the Central Bank to provide full information about actions taken in the service of the people, once the actions have been implemented. Acceding to requests for detailed information about issuances of Treasury Bonds, after the event, are in no way unethical or detrimental to the interests of the State.
Issue executive instructions to the Inspector General of Police and the Bribery Commissioner to begin inquiries to ascertain whether any financial crimes or acts of corruption have taken place in respect of the Treasury Bond auctions of
- 27th February 2015
- 8th January 2016
- 5th February 2016
- 29th March 2016 and
- 31st March 2016.
Alert Public Servants:
Highlight the provisions of Section 70 of CHAPTER 26 of the LEGISLATIVE ENACTMENTS –BRIBERY to make all public servants aware of their responsibilities.
Appointment of the Governor of the Central Bank:
Secure bi-partisan Parliamentary approval for the Constitutional Council’s mandate in nominating persons to high office to be expanded to include the appointment of the Governor of the Central Bank
Facilitation and Non Interference
Issue executive instructions to the Central Bank and other State Institutions subject to investigation to facilitate investigations by providing all necessary information and explanations and also not to interfere and place barriers to the conduct of independent investigations.
I trust that this appeal made purely in the interest of maintaining the credibility of the government led by you with its commendable commitment to good governance will receive your kind attention.
Secretary to the President and Snr. Presidential Advisors-Please review this submission with the President
Secretary to the Prime Minister and Snr. Advisors-Please review this submission with the Prime Minister
The Secretary to the Treasury,
The Secretary to the Monetary Board- for the Governor an Members of the Monetary Board of Sri Lanka
The Inspector General of Police
Director General of the Bribery Commission
Chairman Securities & Exchange Commission
Chairman COPE Committee of Parliament
Resident Director, International Monetary Fund
Editors of Financial Media –for public information and debate
Douglas / May 5, 2016
We can understand, once a wrong thing is done, you learn a lesson and never commit it again. In this case the CB Governor, has committed the same wrong for the second time and that is UNPARDONABLE. In the earlier occasion the President wanted the PM to get him resigned and that was well stated to the Nation by the President himself. That did not happen and the COPE has opened up an investigation on that matter including the second Bond Issue. Then on top of it, this person has made a claim for the cost of a jacket he bought in USA which is Rs. 2 million. It is reported one officer who refused to pay the claim has resigned and gone away in disgust. From all these it appears that this person thinks no end of himself and poses to be INDISPENSABLE. The PEOPLE proved that no one is INDISPENSABLE by voting out a
“KING”. So Mr President do not forget that event. Mr. President, now you must take that “Madu Waligaya” and whip this man OUT. Please do not make any request to anyone to get rid of him.It will never happen. You can DO IT. Please do it NOW. Enough is enough.
Funlover / May 5, 2016
nimal fernando / May 5, 2016
Mr Chandra Jayaratne,
The current governor of The Central Bank is a crook alright. But he did not initiate the crooked bond deals; he merely carried on what was initiated by Cabral and was going on as a matter of routine.
It’s good that you are bringing this up but I would have appreciated it more if you fought the monumental corruption during Rajapakse reign with the same vigour. I hope you were not one of those people who were sitting on their hands like Tissa Vitharana in COPE and suddenly got a mega-dose of Viagra just before the last general election.
Why do I feel like walking the streets of Colombo in the midday sun with a lamp, looking for a honest man!
Patriot / May 5, 2016
Nimal, Yahapalanaya came to power to stop corruption, mega deals etc..And Ranil [Mr.Clean] appointed Arjun who is not a Srilankan disregard of President’s objection. And how can you justified Arjun just because Cabraal initiated it in the past. And Cabraal did not artificially increase the interest rate like Arjun did.
KA Sumanasekera / May 5, 2016
Please don’t waste anymore energy on this lost cause.
Relax with a good glass of Single malt and watch the show rolls on, as I do…
With 2.65 percent extra pumping in to the Family Trust annually for their investments in Yahapalana Bonds the Singaporean still wants the Yahapalana suckers to pay for his American suit which is close to USD 18,000..
There are more interesting Yahapalan developments too, to keep us entertained.
Packer Junior is in Town. Looks like Yahapala brokers ( or is it Investment Bankers? ) have re jigged the commissions..
Watched young Duminda, Yahapalana Sira’s mouth piece who threatened to sack the whole lot of SLFP if they set foot on Kirullapone instead of joining the dalits who were imported to Galle from the future federal Eelaam and Wahabi Lands in the North and the East,and the semi Federal mini eelaam in the Up Country..
Any way it was patheteic see how young Duminda was squirming when our Young Gun Sinhala journos held the blow torch to his belly, about the new Yahapalana administrators who were recruited by his boss Bodhi Sira.
Sajin Vass who was the first Political Prisoner in the Yahapala Jail is now surrounded by a Security Cordon from the MOD.
And poor Duminda had to depend on his off side, the fat black dude sitting beside him. And guess what he said to the Journos.
Who isn’t corrupt in the Yahapalana Parliament.
He must be the Media guy for both UNP and SLFP Yahapalana Faction…
No wonnder Whiskey Madam has said adios to both the Cousin and the ex servant.
Sumathipala / May 5, 2016
“Sweeping Bond Scandals Under The Carpet Biggest Blemish On Government, Chandra Warns Sirisena” is like pouring water on a duck’s back!
What are the odds of anything being done about this? 5000 to 1 was what the odds were for Leicester’s winning the Premier League, but a ‘safe bet’ for this happening would be like 10,000 to 1.
Upali Weerasinghe / May 5, 2016
Mr. Jayaratne should have requested similar details of Greek bonds when he wrote to the CBSL. Then his request would have looked more credible.
manel fonseka / May 5, 2016
I do hope you included a Sinhala version of your letter to the President.
Rata Wesiya / May 5, 2016
No. Put a Sinhala translation in Dinamina.
ballah / May 5, 2016
even a tamil version would help as wijayakala is there to help if appara sira hitan gets stuck
jay / May 6, 2016
jay / May 6, 2016
When correct analysis are mentioned,its the concept of these agents to drop them??? Ha ha Ha YAHAPALANAYA SUPPORTERS!!!
NAK / May 5, 2016
What Jahapalanaya and what credibility are you talking about?
Everybody gets their cut and keep silent.
jim softy / May 5, 2016
This is not the first UNP tamil who destroyed the Central bank.
there was one who stile money and bought houses all over the world.
The present one make rich his son in law and buy expensive cloths to him.
Ranil as usual is bull$hitting.
Piranha / May 6, 2016
Now name all the Sinhalese of all the ruling parties since independence that ruined the country by their racism and greed for power and money.
Start with Banda and finish with Rajapaksa.
Jim Pappa / May 5, 2016
Oh yeah ….You sent him a letter…..??!!
He cannot read write communicate in English…!!! Look what happened now ….all our tax money flushed down the drain…!!!
dayan / May 5, 2016
I wonder how the present governor in the CB is so powerful to think that he is above all in the island and to do what ever he wants.
Nandaguptha / May 6, 2016
According to the Prime Minister, Sri Lanka do not have a qualified person to govern the Central Bank, He imported this person from Singapore to run the Central Bank. Country lost billions of rupees to make the new governor,his family and people who appointed him rich. Investigation reports for the biggest theft in Sri Lanka never got published. Thieves got more opportunities more bond sales with insider information to friends and family members. Innocent, hardworking Sri Lankans got their taxes increased, by an unruly bunch of thugs to protect their perks. Ministers run to Singapore because there are no good doctors or medical facilities in Sri Lanka. Political candidates who were rejected by the people got appointed as ministers. What an opportunity to make money, more and more. What a disgrace, what a crime and what a dictatorship. This is call “YAHAPALANAYA”
shankar / May 5, 2016
“Chandra Warns Sirisena”
water off a duck’s back.
At least now you can warn the president.Those days if you warned the president white van will be sent to warn you.
Devasiri / May 6, 2016
srinath.gunaratne / May 6, 2016
Well I thought I could write something,
But every thing is already said!
I wonder where the Yahapalana apologists are?
Sama, Amara, Leela! kindergarten book gang!
When ever someone raise something against the gonpalane, They would either try to character assassinate you or start blaming the previous government!
I hope bond issuing is not the method all the ruling political parties raise funds to do politics?
I think this is the time to form a strong opposition, Otherwise thieves from both parties will get together and drain the well double time! TNA brothers are the government sitting in the opposition.
Mahinda is partly responsible for the quagmire, Only if he had listened to when right minded people advised him!
KA Sumanasekera / May 7, 2016
Bodhi Sira gets an invite for the Anti Corruption gig in London, brags the Yahapalana Government.
Will the Bond Singaporean, Galleon Ravi and Digital Sira be in the Delegation..
KA Sumanasekera / May 7, 2016
Government Bonds and Government Rents must be the holy cows , which Yahapalana Financiers Milk for return on their investments.
Now Field marshal Fonny pays One Hundred Thousand Dollars a Month for his Office in Rajagiriya.
That is LKR Ten Million or One Hundred Lankhs . Yahapalana Rupees.
And the deposit was LKR 240 Million .
Fonny Ministry mustn’t be much chop because it started only a couple of months ago and over 15 months since the Yahapalanaya kicked in.
We know who own the other big Ticket Building the young Duminda rented for LKR 24 Million a month.
Wonder whether any Yahapalana suckers knows who owns Fonny’s Office..
Also can some one tell us how much a Dalit earns in Pollonnaruwa and Aambalangoda..
So that we can get some perspective of how this Yahapalanay is working to lift the living standards of our great majority..
justice / May 7, 2016
The persons in the group of the Central Bank who actually approved the bond sales are shadowy figures.
They should be named, with their career details and qualifications.