{"id":206155,"date":"2019-11-09T23:28:41","date_gmt":"2019-11-09T17:58:41","guid":{"rendered":"https:\/\/www.colombotelegraph.com\/?p=206155"},"modified":"2019-11-11T22:17:41","modified_gmt":"2019-11-11T16:47:41","slug":"governor-indrajit-release-forthwith-forensic-audit-on-bond-scams","status":"publish","type":"post","link":"https:\/\/www.colombotelegraph.com\/index.php\/governor-indrajit-release-forthwith-forensic-audit-on-bond-scams\/","title":{"rendered":"Governor Indrajit Release Forthwith Forensic Audit On Bond Scams\u00a0"},"content":{"rendered":"

By\u00a0<\/b>Amrit Muttukumaru<\/a> –<\/b><\/span><\/p>\n

\"\"<\/a>

Amrit Muttukumaru<\/p><\/div>\n

It is SHAMEFUL that the Central Bank of Sri Lanka (CBSL) has reportedly sought the approval of the Attorney-General to release to the public domain its long delayed \u2018Forensic Audit\u2019 of the egregious Treasury Bond scams<\/span><\/strong><\/a> as it \u201ccould influence the upcoming presidential election\u201d (\u2018Sunday Times\u2019 3 November). Is this not the very reason it should be in the public domain to enable voters to make informed decisions? The CBSL is the issuing agency of Treasury Bonds.\u00a0<\/span><\/p>\n

The forensic audit was a key recommendation of the report of the Presidential Commission on the bond scams which was available in the public domain from 3 January 2018. It is only now after a protracted delay of 22 MONTHS that the audits have been completed.<\/p>\n

The Treasury Bond Scam epitomizes the worst excesses of the yahapalana government\u2019s alleged corruption and abuse of power. This by no means should portray that the previous Rajapaksa administration was any better.\u00a0<\/span><\/p>\n

Corruption and abuse of power is so endemic that none of the presidential candidates are demanding its release. Even Colombo based NGOs usually very active during the run-up to national elections and who make a killing during this period are mute!\u00a0<\/span><\/p>\n

\u2018Political Hot Potato\u2019<\/b><\/span><\/p>\n

The bond scams are such a \u2018hot potato\u2019 that parliament was dissolved on the eve of the August 2015 General Elections to prevent the D.E.W. Gunasekera led COPE report on the 27 February 2015 bond scam from being presented to parliament.<\/p>\n

No one with FIDUCIARY responsibility with access to official data on the 27 February 2015 and March 2016 bond scams has credibly QUANTIFIED the loss incurred by the government and the people.\u00a0 <\/span>Various \u2018unofficial\u2019 estimates have indicated ASTRONOMICAL <\/b>losses. As the issuing agency of Treasury Bonds, should it not have PROACTIVELY engaged the attention of the CBSL long before a Presidential Commission had ordered it? Now that the long delayed forensic audit has been completed, the CBSL is stalling its presentation by the SHAMEFUL recourse to seeking the approval of the Attorney-General! This must be viewed in the context when some high ranking LAW OFFICERS of the state themselves have reportedly behaved in a manner that beggars belief and have themselves not been held accountable.<\/p>\n

Scope of Forensic Audit<\/b><\/span><\/p>\n

The \u2018Forensic Audit\u2019 will be of little value unless it has CREDIBLY addressed:<\/p>\n

1) The loss incurred by the government and the people<\/p>\n

2) Implications to the economy<\/p>\n

3) Naming the politicians and public servants responsible for the scams\u00a0<\/span><\/p>\n

4) Issues incidental to the bond scams thrown up by witnesses at the Presidential Commission related to:<\/p>\n

i) <\/b>Integrity of Banking System<\/p>\n

ii) Possible Money Laundering<\/p>\n

(iii) Possible Tax Evasion<\/p>\n

iv) Politically Exposed Persons (PEPs) being directors of banks<\/p>\n

Money Laundering<\/b><\/span><\/p>\n

Dr.\u00a0Coomaraswamy\u00a0 <\/span>was appointed CBSL Governor on 3 July 2016. It was under his watch that the contentious \u2018Foreign Exchange Act, No. 12 of 2017\u2019 was enacted on 28 July 2017 and became effective from 20 November 2017 \u2013 16 MONTHS after he took office.\u00a0<\/span><\/p>\n

The Act inter alia states\u00a0\u201cThe Central Bank shall as the agent of the Government, be responsible for implementing the provisions of this Act\u201d<\/i>.<\/p>\n

This Act which repealed the \u2018Exchange Control Act No. 24 of 1953\u2019\u00a0 <\/span>further liberalizes foreign exchange transactions and in effect is conducive for money laundering if people are so inclined. In the context of the absence of the political will to enforce even existing laws and regulations on a level playing field, is it not downright dangerous to have such an Act in the statute book?\u00a0<\/span><\/p>\n

A\u00a0precursor\u00a0to this dangerous Foreign Exchange Act is the \u2018invitation\u2019 issued by then Finance Minister Ravi Karunanayake (he continues to be a Cabinet Minister) through India\u2019s prestigious publication \u2018The Hindu\u2019<\/a> of 5 October 2015 to\u00a0\u201cSri Lankans and Indians who had to take back their deposits from banks in Switzerland to place their funds in Sri Lanka\u201d<\/i>. He had further assured that\u00a0\u201cNo questions would be asked\u201d<\/i><\/b>!<\/p>\n

It beggars belief that CBSL has the AUDACITY <\/b>to cite the contentious \u2018Foreign Exchange Act, No. 12 of 2017\u2019 to justify INACTION on the Sri Lankan names in the PANAMA PAPERS:<\/p>\n

\u201cThe time period prescribed by the Foreign Exchange Act No. 12 of 2017 to conclude investigations under ECA expired on 19.05.2018 as stipulated in the Foreign Exchange Act No 12 of 2017. These investigations also lapsed on that date.\u201d<\/i><\/p>\n

Illicit Drugs & Terrorism<\/b><\/span><\/p>\n

Frequent detections of large hauls of heroin, cocaine and other illicit drugs which most likely are the tip of the iceberg would suggest that Sri Lanka has become a\u00a0REGIONAL HUB\u00a0for the trade in illicit drugs in the Asian region. Such an occurrence is only possible under ENABLING conditions which include lax laws which facilitate money laundering\/smuggling and the nexus between sections of the political leadership and bureaucracy with key players in the trade in illicit drugs.\u00a0<\/span><\/p>\n

Does not the\u00a0Reuters report<\/a>\u00a0\u201cSri Lanka is becoming a hub for cocaine as it is a risk-free\u00a0location with less legal restrictions\u201d\u00a0<\/i><\/b>confirm\u00a0this position?<\/p>\n

It were these enabling conditions and lax security that led to the EASTER SUNDAY CARNAGE\u00a0<\/span> <\/b>resulting in around 253 persons killed and 500 injured and the national psyche badly wounded.<\/p>\n

The link between money laundering, illicit drugs and funding of terrorism does not require elaboration.<\/p>\n

It is reported that a high profile Sri Lankan\u00a0arrested in Dubai this year for his alleged involvement in the illicit drugs trade had allegedly deposited as much as\u00a0\u00a0\u201cRs.10 billion in 23 bank accounts\u201d<\/i>\u00a0in Sri Lanka and Dubai. Even if half this sum was deposited in Sri Lankan banks, does it not indicate that the CBSL has been in\u00a0\u201cdeep slumber\u201d<\/i>? One could only speculate as to how many other cases not yet in the public domain have escaped the notice of the CBSL?<\/p>\n

Conclusion<\/b><\/span><\/p>\n

Much was expected from Dr.\u00a0Coomaraswamy after his appointment as CBSL Governor.\u00a0<\/span><\/p>\n

Would he rise to the occasion at least now on the eve of a crucial presidential election and IMMEDIATELY <\/b>place in the public domain the forensic audit of the egregious bond scams?<\/p>\n

Just today (7 November) the \u2018Daily FT\u2019 reports Governor Coomaraswamy as having stated:<\/p>\n

\u201cno amount of policies and regulations would ensure growth, prosperity and stability if good governance and compliance frameworks were fragile\u201d.<\/p>\n

\u00a0<\/span>Are these merely EMPTY WORDS to the Governor?<\/p>\n","protected":false},"excerpt":{"rendered":"

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