T-bonds issued to SriLankan sans procedure: SDSG Unamboowe

When the matter of treasury bonds valued at USD 520 million or Rs.14.2 billion being issued to SriLankan Airlines by the General Treasury (GT) in 2012 was raised during the proceedings of the Commission on SriLankan Airlines yesterday, Senior Deputy Solicitor General (SDSG) Neil Unamboowe PC pointed out that it had been done without following the proper legal procedure.

Deputy Governor of the Central Bank and former Deputy Secretary to the Treasury, S. R. Attygalle, who was being questioned by the Commission, stated that the General Treasury had issued these bonds to strengthen the balance sheet of SriLankan Airlines.

He informed the Commission that on February 2, 2012, General Treasury officials had a meeting with SriLankan Airlines Management along with several officials from the state banks. It was during that meeting they finalised the issuance of treasury bonds.

The argument posed by SDSG Neil Unamboowe PC was that the General Treasury had not followed proper legal instructions when issuing these bonds to the airlines and that the Treasury had even failed to maintain necessary written legal documents.

The witness answered that maintaining a written format was not practical within General Treasury boundaries and issuing these bonds to SriLankan had been recorded in Government accounts. The witness also informed the Commission that it was the then Finance Minister that had specifically mentioned in the 2012 budget the need to infuse capital into SriLankan and Mihin Lanka, so the Treasury had done this by issuing treasury bonds.

Responding to the question on what basis the Treasury had issued these treasury bonds, the witness said that no specific law existed but the 2012 budget had specified that this be done in order to improve the balance sheet of SriLankan Airlines. Earlier, the Commission was told that according to Article 4 (1) of the Registered Stock and Security Ordinance (RSSO), the Finance Minister was required to publish a Gazette notification in respect of each loan which comes under the RSSO and he has to decide on the issuance of treasury bonds (Yoshitha Perera)