Bond Scam: Debate is Over; Now Nab the Culprits - EDITORIAL
27 February 2020 01:38 am
Two important events took place last week, one in Parliament and one within the Halls of Justice, which underscored the fact that all are equal before the law. One was the debate on the reports of the forensic audit on the Central Bank bond scams while the other was the unprecedented court ruling in which Colombo High Court Judge Adithya Patabendige sentenced former Homagama district judge Sunil Abeysinghe and his personal security officer, police constable Mahinda Kithsiri to 16 years rigorous imprisonment.
The former judge was found guilty of soliciting and accepting a bribe of Rs.300,000 from a woman in 2013 on the undertaking that he would deliver a verdict in her favour while his PSO was found guilty of aiding and abetting in the act of bribery.They were ordered to pay back the bribe money of Rs.300,000 while each of the convicts were also imposed a fine of Rs.20,000 and two more years in prison in case of non-payment of the fine.
Prior to passing judgment, High Court Judge Patabendige observed that he had considered the damage done to the judiciary and hoped the severity of the sentence would act as a deterrent to other public servants who might contemplate committing such crimes using whatever means possible to amass filthy lucre by holding to ransom the people they are supposed to serve.
Meanwhile, the two-day debate on the forensic audit reports revealed the length and breadth of the CB bond scams mainly with the connivance of Perpetual Treasuries Ltd.,
owned by Arjun Aloysius during the tenure of Ajith Nivard Cabraal, who was CB governor from 2006 to 2015 under the Mahinda Rajapaksa government and the scams that took place during the tenure of Arjuna Mahendran, who was CB governor from 2015 to 2016 under the Sirisena-Wickremesinghe government.
Not surprisingly, the government did its best to divert attention from the bond scams by insinuating that the two internationally-reputed companies, which carried out the forensic audit, were not above board and furthermore the reports had no legal basis and as such there was no purpose in holding a parliamentary debate. It appeared to be an attempt to kill the messenger often seen in such cases of unscrupulous financial manipulations.
The forensic reports taken up for debate were compiled by two leading international audit firms KPMG and BDO and comprised the following:
- The Issuance of Treasury Bonds during the period January 1, 2002 to February 28, 2015 by the Central Bank’s Public Debt Department (PDD).
- Primary and secondary market transactions of the Employees’ Provident Fund (EPF) involving Treasury Bonds issued/transacted during the period from January 1, 2002 to February 28, 2015
- EPF transactions from January 1, 1998 to December 31, 2017 in listed and unlisted equities
- Issuance of Treasury Bonds and remittance of funds received to the General Treasury during the period from February 1, 2015 to March 31, 2016 by the PDD.
- The conduct of the supervisory and regulatory role by the Superintendent of Public Debt/Director, Supervision of Non-Bank Financial Institutions pertaining to selected Primary Dealers from January 1, 2009 to December 31, 2017
The reports revealed that the Government had incurred an estimated loss of some Rs.10.47 billion through direct placements of Treasury Bonds by the Central Bank between January 1, 2005 and February 28, 2015 resulting from 4,504 direct placement transactions which were made by the PDD during this period. Now that the bond scam is over, We hope the government will now not waste any more time in nabbing the culprits involved in this financial crime.
“Violations of securities laws are not victim-less crimes. When insider traders gain windfall stock profits because they have bribed someone to leak confidential business secrets, when prices are manipulated and blocks of stocks secretly accumulated, our confidence in the underlying fairness of the market is shattered. We are all victims.” (From the prologue of the book titled Den of Thieves by James B. Stewart)
Whether we will ever see an end to these scams is a question not too difficult to answer given the times we live in and lived in. With the general election round the corner, our choices are limited when it comes to selecting honest representatives, untainted by fraud, bribery and corruption, from among the candidates nominated by the various political parties. The bedlam and mayhem created in parliament, in the aftermath of the October 26 conspiracy, by some of those now in government should make voters think not twice but thrice before casting their votes to such questionable persons, who are an insult to parliament and to those who elected them.