Bond indictment under spotlight

6 September 2019 02:51 am - 1     - {{hitsCtrl.values.hits}}

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Attorney-General Dappula de Livera has come under scrutiny for several decisions and arrests in a number of high-profile cases. One case where it was widely believed that the Attorney General (AG) had upheld the public trust and moved to ensure that justice was done, was the investigation into the alleged treasury bond scam involving former Central Bank Governor Arjuna Mahendran, his son-in-law Arjun Aloysius, and the primary dealer firm owned by their family, Perpetual Treasuries Limited. In this case, a writ application filed last month in the Court of Appeal has alleged of an effort to shut down that investigation and file an indictment, denying the prosecution of readily available evidence against the prime suspects.

A former Non- Executive Director of Perpetual Treasuries Limited (PTL), Ajahn Punchihewa filed a Writ Application in the Court of Appeal (Case No: CA/ WRT/311/219) in July, has now reveals that De Livera hastily shut down the investigation into the 2015 Treasury bond scam and filed indictments against ten accused. Although Punchihewa has become a target he had not even worked with PTL before this bond scam took place. 
The investigation came into public view on Independence Day, February 4, 2018, when the CID arrested Arjun Aloysius and former PTL CEO Kasun Palisena for their involvement in the Treasury bond scam. Investigators thereafter obtained a warrant for former Central Bank Governor Arjuna Mahendran, who had fled to Singapore, and have now begun extradition proceedings against him.


In March 2019, the CID arrested several PTL directors and a central bank official on suspicion of involvement in the alleged bond scam. According to investigation reports (‘B reports’) filed by the CID in the Magistrates Court, none of the directors who was arrested cooperated with the CID. 
Following the March 2019 arrests, the investigation remained out of the public spotlight for over two months until a series of events that began on June 7, 2019. Beginning at around 7:00 AM on that day, several journalists began receiving calls from Coordinating Officer to the Attorney General Nishara Jayaratne, stating that an announcement would be made regarding the bond scam investigations at 1 PM.


As journalists streamed into the Attorney-General’s Department at the appointed time to meet Jayaratne, they were given a press release stating that De Livera had sought permission from the Chief Justice to file an indictment in the Permanent High Court at Bar in the treasury bond case. Those he listed as accused in the press release were Arjuna Mahendran, PTL, the eight suspects who had already been arrested by the CID including Arjun Aloysius and Kasun Palisena, and a tenth name, Ajahn Puncihewa.
Punchihewa had migrated to Singapore in 2017, and had been in contact with the CID about cooperating with their investigations. He had exchanged emails with CID Director Shani Abeysekara and been formally noticed by the magistrate to give a statement to the CID before June 26, 2019.
The AG’s action on June 7, however, took both Punchihewa and the CID by surprise. The CID investigation into the bond scam was still ongoing, and investigators believed several more steps were necessary before filing an indictment. 


According to Punchihewa’s application, on June 10, he has sent an email to the CID director referring to his previous email correspondence with them reminding investigators that he had been cooperating fully, responding to their emails ‘within 24 hours’, confirming his identity ‘and seeking to convey facts that could assist the investigation’. He recounted how he had then got a notice from the magistrate’s court to give a statement by June 26.
“I was stunned to learn that according to several Sri Lankan television newscasts and newspapers, the Attorney-General has decided to prefer an indictment against me in this matter,” Punchihewa has stated in his petition. He stressed that ‘in the event that the Attorney-General reverses the decision to indict him, he remains eager to assist this investigation and provide information, investigative material and evidence’ that he said was valuable to the CID and the AG ‘in the interest of justice’.

 

"Punchihewa in his application further stressed that several witnesses and their family members in this and related matters have come under threat, and evidence is reported to have been destroyed"


Punchihewa in his application further stressed that several witnesses and their family members in this and related matters have come under threat, and evidence is reported to have been destroyed, and urged the CID to keep his offer of cooperation confidential. He has asked the CID director to contact his lawyer, Rasika Weeratunga, to make arrangements to record his statement.On the same day, according to the petition, Weeratunga has separately sent an urgent letter to the AG, stating that Punchihewa has ‘informed and instructed’him (Weeratunga) to seek the approval of the AG to make his first statement to investigators. Weeratunga’s letter has further said that the said statement which his client intends to make shall be of extreme importance to the matter that the AG has decided to file indictment on, and will also immensely assist the investigators and the good officers of the AG’s Department in meeting the ends of justice.
The Daily Mirror is in possession of Punchihewa’s writ application and according to it, Weeratunga has received a phone call from the CID Director on June 12, and arrangements were made for him to meet with an Additional Solicitor General in connection with Punchihewa’s request to assist in the investigation. 

Filing of an affidavit

Weeratunga also has filed an affidavit in support of his client’s writ application. In it, he states that even before he attended the meeting at the AG’s Department, arrangements had been made for him to travel to Singapore to assist Punchihewa to ‘examine documents’.
Before departing to Singapore, Weeratunga attended two meetings with AG’s Department officials.
Weeratunga in his affidavit says he flew to Singapore to meet Punchihewa and after several rounds of consultations he had over a three-day period in Singapore, Punchihewa had given further instructions for him to make a further representation to the AG stressing his eagerness to cooperate, and volunteering investigative material.
According to Punchihewa’s application, upon returning to Sri Lanka, on June 18, Weeratunga has written his second letter to De Livera on behalf of Ajahn Punchihewa. He has referred to his previous meetings with Additional Solicitor General Priyantha Nawana and Senior Deputy Solicitor General Haripriya Jayasundere, 
and sought to brief the AG on the success of his trip to Singapore. 


The letter stressed in bold print that Punchihewa remained ‘adamant to fully cooperate with and assist the ongoing investigations’, including the activities of Arjun Aloysius, his accomplices and companies. Weeratunga had elaborated that the degree of cooperation volunteered by Punchihewa is so extensive that he was instructed to state that investigators may require several days and possible follow up interviews with both Punchihewa and several corroborating witnesses. 
“I am of the view that if my client’s statement is recorded, the resulting investigations would lead to a series of additional indictments on multiple grounds, inclusive of financial frauds which have not yet been brought to light by the relevant regulatory authorities,” Weeratunga added.
He provided additional examples of the evidence that Punchihewa was volunteering unconditionally claiming that Punchihewa can provide a detailed narrative of the first board meeting that took place after the bond auction on March 13 2015, which was Punchihewa’s first official engagement with the company. 
“Based on the cooperation of my client, it is highly likely that the prosecution could present to court, credible and corroborated evidence of how Kasun Palisena responded to queries raised by certain board members regarding questions that were being posed by important individuals as well as national media organisations regarding the said bond auction,” Weeratunga wrote. 

 

"Punchihewa had migrated to Singapore in 2017, and had been in contact with the CID about cooperating"


According to the petition, Weeratunge has reminded the AG that two close friends of Punchihewa had been threatened and persecuted for cooperating with the Treasury bond investigations, and that Punchihewa’s family was a key witness in a connected investigation being conducted by the Commission to Investigate Bribery and Corruption (CIABOC). Hence Weeratunga had sought an urgent appointment to meet the AG at the earliest opportunity to make arrangements for Punchihewa to be of assistance to the state. 
That urgently sought appointment did not taken place.  The AG’s June 18 letter, signed by State Counsel Sahanya Naranpanawe, states that Punchihewa had been named as a suspect ‘based on material revealed in the course of investigation’.
She accused Punchihewa as having ‘not divulged his residential address to the CID as required’. The letter concluded that ‘there is no legal impediment’ for Punchihewa to appear at the CID to make a statement and any disclosures relating to the matters under investigation.


According to Punchihewa’s writ application, this letter was misleading, and intended to trap him into returning to Sri Lanka and get arrested and indicted, without being given an opportunity to cooperate or tell his side of the story. This, Punchihewa discovered through his lawyers before June 18 and  before Weeratunga’s second meeting at the Attorney General’s Department, that the CID had quietly shut down the investigation and made it impossible for more statements to be recorded or evidence to be gathered.
The CID had done this on June 13, the day after Weeratunga and the CID Director had spoken on the phone and agreed to get things in motion to record Punchihewa’s statement. On June 24, the petition states, Punchihewa learned that the CID had submitted a final report to the Colombo Chief Magistrate on June 13, stating ‘that investigations were concluded in regards to the alleged offences’ he was accused of. 

Writ application

Punchihewa ‘was astounded in becoming aware of this’ because the Magistrate had asked him to give a statement by June 26. Punchihewa in his Writ application says that without even recording his statement, the CID has submitted a final report, in deprivation of fairness and his legitimate expectations,in an arbitrary, capricious, unreasonable, vexatious, and irrational manner, bereft of procedural propriety. 
Weeratunga again tried continuously to seek a meeting with De Livera, but his requests 
were ignored.
On June 26, the deadline by which Punchihewa had been noticed to give a statement to the CID, his attorney Weeratunga went to the magistrate’s court and told Chief Magistrate Lanka Jayaratne in open court that Punchihewa was prevented from coming and giving a statement because the investigation had been shut down and the AG had decided to indict him almost three weeks before he was due to testify to the CID.


Two days later, Weeratunga wrote another letter to the AG, seeking a ‘very urgent appointment’ on behalf of Punchihewa. He said “there is no evidence on which to indict Punchihewa on charges connected to the February 27, 2015 bond auction, and Punchihewa remains ready to reveal incriminatory material against other suspects”. 
Instead, on June 28, the AG filed an indictment in the Permanent High Court at Bar, charging Punchihewa along with the other suspects, and after taking steps to deliberately ensure that he could not share his story with the CID. 


In the indictment, the AG said that Punchihewa was accused because he was a director during the time that the conspiracy for the bond scam took place, from January 26, 2015 to March 2, 2015, even though Punchihewa still had not participated in any PTL activities up to that period. 
After failing to get cooperation from the CID or the AG in his efforts to assist the investigations and clear his name, and now risking having to defend himself in a criminal trial at the Permanent High Court, Punchihewa decided, on July 10, to file a writ application in the Court of Appeal, giving the material he had on Arjun Aloysius’ assets and activities as well as the story of his interactions with the CID and the Attorney General.


The application, containing over 260 pages of affidavits, correspondence and records, tells Punchihewa’s entire side of the story to the public for the first time. According to the writ application, Punchihewa was appointed to the Board of Directors of Perpetual Treasuries Limited (PTL) from February 18, 2015, but states that he did not participate in any of the Board Meetings and that he did not have any meeting with the board of Directors of PTL, whether formal or informal, until he attended his first board meeting that was held at the Board Room of Free Lanka Holdings, Level 3, Prince Alfred Tower, Colombo 03 on March 13, 2015 at 4.30pm.

 

"Before departing to Singapore, Weeratunga attended two meetings with AG’s Department officials"


Punchihewa states further that he did not have any communication with the Directors of PTL or with the CEO between February 18 and March 13, 2015 nor had any prior discussions in respect of any investment, business plan and/ or any other affair of PTL until March 13.
According to the Writ application, he has received an e-mail to his personal e-mail address on March 29, 2019 from Director CID, SSP Shani Abeysekera stating that he has been named as a suspect in the Colombo Magistrate’s Court and the case is due to be called on April 5, 2019 and in terms of the Code of Criminal Procedure Act No 15 of 1979, a necessity has arisen to interview and record a statement from him and had requested him to appear before the CID on or before June 26th.
He states further that he received an envelope addressed to him through the Singapore Post enclosing a notice issued by the Colombo Chief Magistrate dated April 5, 2019, for him to appear before the CID.


According to the application, after reading the documents he received he has realised all the said purported allegations were pertaining to the February 27, 2015, Central Bank of Sri Lanka (CBSL) bond issue. On March 30, 2019, Petitioner Punchihewa has informed Director CID his willingness to fully cooperate with the investigations and has sought legal advice with the bona fide intention to provide all possible assistance for the ongoing investigations into the alleged fraud committed in respect of the issuance of Government Bonds by the CBSL. 
Punchihewa states by the time he received the Chief Magistrate’s order, he had commenced gathering further information connected to the affairs of PTL as well as the assets of Arjun Aloysius and his family, in order to assist the ongoing investigations.


The application reveals how Punchihewa has obtained the title deed for a penthouse apartment in Singapore occupied by Arjun Aloysius and his wife.
Attached to the writ are documents obtained by Punchihewa originating from the government of the British Virgin Islands showing that in August 2017, while the Bond Commission was investigating the assets and transactions of the Perpetual group, the name of ‘Perpetual Holdings Worldwide Limited’ was changed to ‘Ladyhill Capital Holdings Limited’.
He further states that, however, on June 7th and 8th, he became aware through various media reports purporting to cite a press release issued by the Coordinating Officer to the AG, that the 6th Respondent- the AG had made an application to the Chief Justice in terms of Section 12 A (4) (a) of the Judicature Act (as amended by Act No. 09 of 2018), for a direction to institute criminal proceedings against 10 persons including him (Punchihewa) before the Permanent High Court-at-Bar.
Punchihewa then recounts the events described above, where he and his lawyers pleaded repeatedly with the CID and the AG’s Department to let him help their investigations and at least record a statement from him before hastily rushing to file a case against him without any evidence. 

 

"The application, containing over 260 pages of affidavits, correspondence and records, tells Punchihewa’s entire side of the story to the public for the first time"


To prove the haste in which the indictment was filed, Punchihewa also explained to the Court of Appeal that at the request of the Attorney-General, the Central Bank is conducting a detailed forensic audit of Treasury bond related transactions, that in December 2018 the AG’s Department had said was essential to get the evidence necessary for a prosecution. The audit, Daily Mirror learns, has cost the government over Rs 1 billion.

Punchihewa also criticised the report filed by the CID in the Magistrates Court to close the investigation. “Ordinarily the report submitted under Section 120 (3) of the Code of Criminal Procedure Act is a comprehensive report submitted at the conclusion of the investigation. But however, in the present case, to the best of knowledge of the Petitioner, the said report submitted to the Colombo Chief Magistrate comprises only one paragraph, portraying the incomplete manner and nature of the said report.”
He then sets out the evidence that he had gathered and was trying to offer the CID. The evidence includes records of securities frauds involving Arjun Aloysius, emails destroyed by PTL that Punchihewa has preserved, evidence of bond fraud after February 2015 that Punchihewa says he can corroborate. 

  Comments - 1

  • Raja Senanayake Saturday, 12 October 2019 08:48 AM

    I look forward to a more detailed investigation of this alleged bod scam as I am still not convinced there has been such a scam. We all value justice and hence there should be a conviction in Court to prove the bond scam. These are not easy matters for the general public to follow. There is the need for a full inquiry. It is easy to shout "hora hora" but an enlightened public needs such charges to be substantiated. I am waiting for such conclusive evidence which will be disclosed in our sacred courts of law.


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