{"id":184649,"date":"2017-11-22T18:59:58","date_gmt":"2017-11-22T13:29:58","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=184649"},"modified":"2017-11-25T18:59:47","modified_gmt":"2017-11-25T13:29:47","slug":"its-time-to-go-ranil","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/its-time-to-go-ranil\/","title":{"rendered":"It\u2019s Time To Go Ranil!\u00a0"},"content":{"rendered":"

By Laksiri Fernando<\/a> –<\/span><\/strong><\/p>\n

\"\"<\/a>

Dr. Laksiri Fernando<\/p><\/div>\n

In a democracy, if a Prime Minister\u2019s name is tarnished in a financial embezzlement of the slightest nature, he or she should gracefully resign. This does not necessarily mean that he\/she is directly responsible, but trying to be in office disregarding the tainted image do harm to him\/her and more to the country. <\/span><\/p>\n

This is not written in law or in constitution, but a democratic custom. It is also common sense. Otherwise, how can a PM maintains the financial integrity of the Cabinet? <\/span><\/p>\n

In these columns, I have written about the case of \u2018A bottle of Wine [Throwing] a Premier Out!<\/a>\u2019 (Colombo Telegraph<\/em>, 17 April 2017), well before the Yahapalana government, where \u201cThe Premier of the New South Wales (state) of Australia, Barry O\u2019Farrell, announced his resignation (16 April 2014) over the issue of receiving a bottle wine as a gift that he failed to declare in 2011 in the \u2018Pecuniary Interest Register.\u201d <\/span><\/p>\n

I further said, \u201cThis is a case of \u2018accountability and transparency\u2019 that all Prime Ministers, Chief Ministers, Ministers and all Members of Parliament or members of any such representative institution in a functioning democracy should abide by.\u201d <\/span><\/p>\n

Therefore, my claim: \u201cIt\u2019s Time to Go Ranil!\u201d is not at all personal or aiming at him alone. <\/span><\/p>\n

Before the Commission <\/b><\/span><\/p>\n

There was no \u2018charge sheet\u2019 as such before the Commission<\/a>, but there were 28 questions first (letter dated 10 October 2017) and then 20 more for the PM to answer, because of his implication and\/or responsibility on the matter of bond irregularities. In addition, he was requested to appear before the Presidential Commission to clarify several other related matters and the questioning lasted for about one hour on 20th November. <\/span><\/p>\n

One may say that he answered well, which is true, or the Commission was so decent and polite without grilling him on the same matter again and again. It is also true that this is the first time that a sitting PM was questioned before an independent commission ever, and it speaks well for the democratic culture of the present government. The question or the necessity therefore is to take the next logical step. <\/span><\/p>\n

Possible Culpability? <\/b><\/span><\/p>\n

To the first question, the PM truthfully answered \u2018Yes,\u2019 that somewhere in early January 2015, he invited Mr Arjuna Mahendran<\/a> (AM) to serve as the Governor of the Central Bank. <\/span><\/p>\n

It is true that on the second question, he explained that the formalities under the Monetary Law Act were duly followed in the appointment. However, the third question further asserted that the recommendation came from the PM, based on AM\u2019s evidence, and asked why AM was singularly considered \u2018fit and proper person\u2019 for the position of the Governor. The answer was ambiguous, going in rigmarole, even referring to the previous Governor unnecessarily, like in a Parliament debate. <\/span><\/p>\n

The PM further couldn\u2019t answer properly the suitability of a person who was not a Sri Lankan citizen (question 4), in the current context, or who has not even applied for the citizenship back. All indicated to the \u2018conflict of interest\u2019 on the part of the appointee being a citizen of Singapore; and the PM with a possible self-interest due to friendship or other obligations overlooking the above \u2018suitability\u2019 of the appointee. <\/span><\/p>\n

Most importantly, the PM has clearly overlooked or taken lightly the \u2018conflict of interest\u2019 between the CB Governor (AM) and a Primary Dealer, Arjun Aloysius<\/a> (AA), directly and indirectly. This is how and where the irregularities have apparently occurred, the gravity and illegality of which have to be determined by the Commission. The questions 5 to 7 were surrounded on these matters. The PM has clearly admitted:\u00a0<\/span><\/p>\n

\u201cI was aware that Mr. Mahendran\u2019s son-in law Mr. Aloysius was the Chief Executive and Director of the primary dealer Perpetual Treasuries (Pvt) Ltd<\/i>.\u201d <\/span><\/p>\n

The above could have been a disqualification for AM to be the Governor in addition to his citizenship. <\/span><\/p>\n

Match Fixing? <\/b><\/span><\/p>\n

However, the PM has thought otherwise. The most strange is the way he has tried his best to fix the apparent \u2018conflict of interest.\u2019 The following is what he has said,\u00a0<\/span><\/p>\n

\u201cWhen Mr. Mahendran was offered the post of the Governor of the CBSL, I insisted that he should ensure that Mr Aloysius would resign as a Director of Perpetual Treasuries (Pvt) Ltd, and not involve himself in the business activities of that company in anyway<\/i>.\u201d <\/span><\/p>\n

How come that the PM \u2018insist\u2019 that AA should resign as the Director of the Perpetual Treasuries unless they were a close group? How come that even AM ensures that AA resigns as the Director? Even going beyond those premises, the PM has \u201c[I] also strongly recommended that <\/i><\/span>the best course<\/i><\/span> would be for Mr Aloysius to divest himself of his shares in the company<\/i>. This was conveyed by me both to Mr Mahendran as well as to Mr Aloysius.<\/i>\u201d <\/span><\/p>\n

It appears that the PM had become an \u2018advisor\u2019 to both AM and AA, but none have heeded his advice, perhaps believing that the matters are not that serious or that the PM would protect them in any event. This was the standard thinking in Sri Lanka, particularly prior to 2015. <\/span><\/p>\n

It was in the above context that the PM\u2019s advice to go for \u2018public auctions\u2019 is highly questionable while the past practice has mainly been \u2018direct placements,\u2019 completely right or wrong. It is an obvious fact that \u2018divesting shares\u2019 is not that easy for anyone like resigning from a position of CEO or Director. A \u2018conflict of interest\u2019 can go even deeper, leading to \u2018insider trading,\u2019 as revealed by the fact that actual ownership of the primary dealer, Perpetual Treasuries, being with the Perpetual Capital Holdings. <\/span><\/p>\n

Having known or aware of the above circumstances, the PM should have been much more vigilant and careful about possible \u2018insider trading.\u2019 He had already taken over the Central Bank under his ministry which otherwise was under the Ministry of Finance. It was also a political fact that he was like a \u2018caretaker PM\u2019 during that period without a direct mandate from the people. <\/span><\/p>\n

Public Auctions! <\/b><\/span><\/p>\n

In answering questions 10 and 11, the PM has admitted that he instructed AM in February \u2018to issue bonds by way of public auctions in accordance with the economic policy of the Government,\u2019 which could be his own or his party\u2019s economic policy and he has not referred to any Cabinet decision or a meeting on the subject. <\/span><\/p>\n

He has further given a theoretical discourse on \u2018market liberalism\u2019 and \u2018macroeconomic liberalization,\u2019 but it is not clear why he was so quick in overhauling the bond procedure that way, which has led to the erosion of credibility, arising \u2018conflict of interest,\u2019 \u2018insider trading\u2019 and at an enormous loss to the government according to the Auditor General. <\/span><\/p>\n

From the answers given the following also were clear. <\/span><\/p>\n