PTL CEO Kasun Palisena giving evidence before the PCoI today admitted that his boss Arjun Aloysius had ‘lied’ to the Parliamentary watchdog committee COPE headed by MP Sunil Handunneththi, when he appeared before it during its inquiry into the Treasury Bond controversy.
During the cross-examination, Deputy Solicitor General Milinda Gunatilleke told PTL CEO Kasun Palisena that there was a limit to lying and therefore to reveal the truth before the Commission without ‘carrying the load’ on behalf of Arjun Aloysius.
Justice Prasanna Jayawardena also told the witness to at least have the courtesy to come up with a lie that is believable.
Continuing the cross-examination of PTL CEO Kasun Palisena, DSG Gunatilleke yesterday questioned him again on the ‘information’ which was passed by Aloysius regarding the precise ‘cutoff rate’ at the March 29, 2016 auction.
It was earlier explained that Arjun Aloysius had conveyed to Palisena the ‘cutoff rate’ at the auction would be around 14.80%.
The DSG showing some documents confirmed yesterday that the Public Debt Department of CBSL had recommended to accept all the bids below 14.7996% at the March 29 Auction.
The DSG showed that there were 200 bids at the auction and in the 131 place in the bid sheet was PTL’s bid which was a Rs. 5 billion at a rate of precisely 14.7996%.
DSG Gunatilleke showed that the CBSL had subsequently accepted all bids which were below that rate (the PTL bid rate which was 14.7996%).Therefore PTL’s bid of Rs. 5 billion at a rate of precisely 14.7996% was the last bid that was accepted. He said the rate quoted by PTL was precisely similar to the ‘cutoff rate’ recommended by the PDD.
DSG Gunatilleke: What was the cutoff rate at the March 29, 2016 auction?
Witness Palisena: 14.7996%
DSG: That is identical to the PDD’s recommendation to the fourth decimal point, right?
DSG: So, the person who fixed this rate at the PDD should have passed this information to Aloysius, isn’t it?
W: That I don’t know
DSG: So, who would have provided this information to Aloysius?
W: That I don’t know
DSG: How would you not know about it? According to the phone conversations, Aloysius had provided you the exact information about the ‘cutoff’ rate?
W: Yes, but Idon’t about it
DSG: Then, only Aloysius would know about it?
W: That I don’t know
It was revealed in one of the conversations between Palisena and Aloysius, PTL CEO Palisena asks Aloysius whether he was certain about the provided information on the cutoff rate. And Aloysius replies “100% sure”.
DSG Gunatilleke noted that the average yield rate of PTL’s bid at the auction was precisely around what Aloysius asked Palisena to bid at.
At this moment DSG Gunatilleke played another phone recording of a conversation between Aloysius and Palisena, in which Palisena tells Aloysius: “I got Little Johnny’s bids”.
When questioned, Palisena said what was referred to as ‘Little Johnny’ was about the bids of their clients as they were regarded as small bids. But the DSG was not convinced from that answer and showed some documents which reflect bids by clients of PTL in the auctions. Then witness Palisena said bids by their clients would not show in that document and it would show in PTL’s bidding sheet.
DSG Gunatilleke was unhappy with the answer as there was no marked document perusable at that point from PTL before the Commission.
The DSG continued to question the witness on ‘Little Johnny,’ but the witness was maintaining his stance. Then the DSG said: “Tell the truth, was it correct to say that Dhanuka (SLIC dealer) was referred to as ‘bee hive’ in the trading industry? Witness’ answer was affirmative. “And you were called as ‘Mod Goviya’, right?” witness confirmed yes.
DSG: So was this person referred to as ‘Little Johnny,’ the DFCC dealer Kaveen Karunamurti, who was the intermediary when PTL sold bonds to NSB, SLIC and EPF in the secondary market?
Witness Palisena rejected that and went on to maintain his earlier stance.
DSG Gunatilleka said PTL had also included dealers from state institutions like Naveen Anuradha (from NSB), Dhanuka (SLIC) and Saman Kumara (EPF) into the ring which allowed PTL to gain phenomenal profits.
The DSG showing PTL’s capital gains documents explained that PTL had gained phenomenal profits of around Rs. 2 billion each in November 2015, April and May, 2016.
However, after the EPF stopped its secondary market transactions in May, 2016, PTL’s profits significantly fell, as their June, July and August 2016 profits were around only 500 million, which was similar to other primary dealers.
The DSG was of the view that Aloysius had inside information about the Treasury Department’s fund requirements which were confidential and information that other Primary Dealers were not privy to.
In the phone conversation, Aloysius also tells Palisena precisely about the Government’s fund requirement as Rs.122 billion by the end of March, 2016.
After a series of questions by Justice Jayawardena, it was revealed that though Rs.105 billion of the Rs. 122 billion requirement of the Government was public knowledge, the rest of the Rs.17 billion was confidential information which was only known to CBSL and the General Treasury.
At this moment, the DSG played another phone conversation, which reflects a discussion between two dealers of PTL about a cash check (Rs.1.1 million) to be sent to a person, known as ‘Little Johnny’.
DSG: In the conversations they refer to a cash check to be sent to one Little Johnny, right?
Witness Palisena initially disagreed to it and later the DSG played the conversation again and only thereafter he admitted to it as “yes”.
DSG: Who was this ‘Little Johnny’?
W: Can be anyone.
The Court room burst out in laughter at the answer of Palisena.
DSG: There is a limit to lying.
Witness was silent
DSG: Ok that means you don’t believe there is a limit, let’s continue then.
Justice Jayawardena also seemed surprised after knowing that one of the parties to that conversation was one ‘Gajan’, because he was attending the proceedings and advising PTL lawyers in regular basis.
“Oh is that Gajan, our friend who used to come here”, Justice Jayawardane said in a sarcastic manner.
After a series of questions by Justice Jayawardane and the DSG, It was explained that this ‘cash check’ of Rs. 1.1 million was sent to Perpetual Capital Holding (PCH) from PTL. It was revealed that PCH had no clients as Palisena earlier said in their business and it was a possible payment to its owner Aloysius, who might have wanted it to pay some one else referred as “Little Johnny.”
Justice Chitrasiri at this point also referring to some words in the phone conversations said: “It says ‘check eka eyata dunna’ (the check was given to an individual), so there is an individual. Who was he?”
W: it could be anyone, even an employee.
Justice Jayawardena: At least have the courtesy to tell a lie which is believable. The conversation tells about an individual. According to you it can be many ‘Little Johnnys’ as well. So tell the truth now?
Witness Palisena was avoiding the answer and maintained that it could be anyone and many ‘Little Johnnys.”
Justice Jayawardane: If frankly said, at least come up with a lie that is believable.
DSG Gunatilleka: You are carrying a heavy load on behalf of Arjun Aloysius.
Witness was silent for a while and rejected what they said.
Referring to the capital gains which were transferred from PTL to other companies in the Perpetual Group, Justice Jayawardane asked the witness whether these capital gains were also used to pay regularly a fairly large sum of money to so called ‘Little Johnnies”.
The witness disagreed with the profit transfers and said again that ‘Little Johnnies’ could be anyone, even an employee of the company.
In a telephone conversation played before the Commission it was earlier revealed that Palisena had asked his close friend Kaveen Karunamurti ( dealer DFCC), to give the number of transactions that he had been involved in with PTL and other government institution to the PTL finance department. In that conversation Palisena tells “this is something for you”.
DSG Gunatilleke also playing another phone recording contested the witness’ earlier argument that PTL had bid in the March 2016 auctions based on its Financial analyst, Gajan’s predictions.
In another phone conversation it was revealed that Gajan was telling one dealer that he is trying to prepare a report to show a prediction that corresponds to what happened in the March auctions. This conversation happens in the afternoon of March 29,2016, after the auction took place.
Earlier PTL produced prediction reports of their analyst that were said to have been prepared prior to the auction.
When the DSG questioned about this from witness Palisena, he said the conversation was about some daily reports. (the court room burst out in laughter)
Then referring to some words reflected in the conversation, DSG Gunetilleke said: “This witness is an unrepentant liar and he is doing this because of the nine digit bonus he is getting.” (a figure that is over Rs.100 million)
The witness rejected it.
“You are not accepting what everybody understands, because you are well looked after”, DSG Gunatilleke said.
DSG Gunatilleke again played another phone conversation which happened between a dealer of PTL and a financial officer at W.M. Mendis & Co.
“Boss ge (Aloysius) payment ekak neda” (is this a boss’ payment), one says. “Melo deyak Api dan ne illanakota denawa” (We don’t know anything. We give when asked)
The DSG was of the view that even the employees were in a confusion about these inter company payments, which ultimately ended up in Aloysius’ pocket.
Thereafter, referring to the Sunil Hadunnetti’s COPE report, DSG Gunatilleke made the witness to read what Arjun Aloysius had told before the COPE committee in the latter part of 2016 when PTL was under investigation.
Aloysius had guaranteed to COPE that he had resigned from the position as the CEO of PTL in January 2015, after his father-in-law was appointed as the Governor of the CBSL considering the element of conflict of interest that could arise. He had said that thereafter he had never engaged in the operational activities in the company (PTL).
However, it was revealed earlier during PCoI proceedings, through phone conversations between Palisena and Aloysius, that Aloysius had been involved in operational activities of the PTL by instructing its CEO Palisena on bids and passing on ‘price sensitive inside information’ which he had received from some sources referred to as “our friends in department” and “our friends in powerful places”.
In this backdrop, DSG Gunatillke and Justice Jayawardena repeatedly questioned Palisena to confirm that Arjun Aloysius was actually involved in operational activities regularly as opposed to what he told the COPE.
DSG: So, that means Arjun Aloysius had lied to the COPE, because there is evidence in this commission that he had been involved in PTL operations?
Witness was avoiding the answer.
Justice Chitrasiri: Now we saw from those phone conversations that those bids were placed by you under Aloysius’ instructions, so, under these circumstances was Aloysius’ statement to the COPE true or not?
W: Yes he got involved in operational activities of PTL
DSG: Don’t go around give a straight answer.
Justice Jayawardena: Aloysius had lied to the COPE. Correct or wrong? I want an answer.
Witness finally admitted: He has lied.
(By Shehan Chamika Silva)