The recently surfaced mystery gazette notification with regard to government securities (G-Secs) is part of an obsolete law, which the Central Bank has been attempting to comply with, and the law would be amended as soon as possible, the country’s economic managers said yesterday.
Central Bank Governor Dr. Indrajit Coomaraswamy said that gazetting G-Sec issuances at the start of a year would have been practical under the administrative basis with which the government had issued G-Secs from 1930s, when the Registered Stocks and Securities Ordinance No. 07 of 1937 was introduced, till 1997 when the auctions started.
“Once the operations in issuing the government securities gets a market dimension, it becomes impractical to give advanced notification on how much will be accepted and what the interest rate would be, because once the market forces are introduced into the system, there is more uncertainty and variability,” he said.
He said the governments had been able to follow the ordinance in the past since the governments were able to decide the amount, tenures and interest rates of G-Secs at the start of the year, depending on the country’s requirement for the year.
However, Dr. Coomaraswamy noted that despite the impracticality, the Central Bank has complied with the spirit of the ordinance by providing the public with as much information as possible about G-Secs.
“The Monetary Board has been publishing the details of the auctions on national newspapers and since the technology became available, on the website, so the Central Bank has substantially complied with the ordinance,” he said.
He added that the Central Bank each year has reserved a gazette number from the Government Printer and after issuing all debt for a year, published the details backdated to January 1, 2015, which meant that for that specific year, the then Finance Minister Mahinda Rajapaksa’s name would have appeared on the gazette.
Finance Minister Ravi Karunanayake said that the government was not attempting to divert any blame of the bond scandal to Rajapaksa but remained critical of Rajapaksa continuing to circumvent the ordinance instead of amending it. “When our government became aware of the situation, I immediately asked the Government Printer not to publish the gazette for 2016. These gazettes have not come either to the finance minister or the treasury secretary for approval,” he said.
He noted that the gazettes had been prepared by the officials in the Central Bank below the level of the Debt Department Superintendent and that it was also unusual that the gazette for 2015, which should have been sent for printing in December 2015, had been sent in November 2016. “Why has the hyperactive Auditor General not found this?” Karunanayake questioned.
Both Dr. Coomaraswamy and Karunanayake said that while the legality of the process would be determined later, all the G-Secs issued in the past are valid and that the investors should not be worried.
“All securities issued by the government of Sri Lanka are absolutely safe; they continue to be risk-free and the government of Sri Lanka is fully behind them. So no one should be concerned about the validity of government securities,” Dr. Coomaraswamy explained.
Karunanayake said that the ordinance would be amended as soon as possible and if the amendments cannot be completed by March 15, when the bonds would next be issued, an administrative solution would be taken and the details of the auction would be gazetted on the following day. (Chandeepa Wettasinghe)
Comments - 5
DJ Wednesday, 01 March 2017 06:10 AM
Trying to muffle the great robbery. We voted just exchanging one bunch of thieves with another bunch of cleverer thieves. Country first leaders are a very rare breed all over the world
TRUTH TRIUMPHS Wednesday, 01 March 2017 06:24 AM
Dr Indrajith C the current Governor whose integrity is well known has lucidly informed the country as to how the gazette came to be published with the name of MR.To MR even though the lapse was due to his negligence attempts to portray himself as a lily white angel who is hunted by the current rulers. I hope his backers got to know the truth as ultimately triumphs. .
san Wednesday, 01 March 2017 08:22 AM
more lies to cover up their robbery
Angelo Peiris Wednesday, 01 March 2017 08:35 AM
This whole process of the backdated Gazette printing implies that Sri Lanka is well ahead of the time, with the only piece of equipment missing to make this whole thing work is the 'Time Machine' which is not yet invented. For if that existed, in November of each year, the Central Bank officials can take a ride on the Time Machine (with all the details of Bonds issued during the year) and go back to January of that year, print the gazette, and then travel back to November. Then there would be no issue at all with the whole process, and everyone could appreciate it as the best practice.P.S. This also implies that Sri Lanka is used to Time Machines culturally (to have the capability to devise such abstract processes), and who knows whether such familiarity exists due to the fact that Time Machines actually existed is Sri Lanka during the same time that the 'Dadu Monare' existed?
concern Tuesday, 28 February 2017 08:03 PM
Seems both are plotting something !
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