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Treasury bond scandals: COPE final report

Arjuna Mahendran
Parliamentary watchdog committee, COPE (Committee on Public Enterprises), yesterday approved its Chairman’s report holding former Central Bank governor Arjuna Mahendran responsible for Treasury bond scandals.

The report recommends legal action against those involved in the scams and the recovery of losses from them, according to a senior COPE member.

The COPE met around 9.30 am in Parliament yesterday, following heated exchanges over the Mahendran issue the previous day, and the division continued resulting in UNP members of the committee saying that they would not agree with Chairman, JVP MP Sunil Handunnetti’s report. Of the 14 members of the COPE, who met yesterday, eight representing the UPFA and the JVP endorsed the Chairman’s report. They are Mahindananda Aluthgamage, Lakshman Seneviratne, Chandrasiri Gajadheera, Priyankara Jayaratne, Lasantha Alagiyawanne, Weerakumara Dissanayake, Bimal Ratnayake and Dr. Nalinda Jayatissa.

As they failed to secure majority to exonerate Mahendran of the treasury bond scam or change the report of investigation, the five UNP Members, Dr. Harsha de Silva, Ajith Perera, Sujeewa Serasinghe, Hector Appuhamy and Harshana Rajakaruna said that they would submit an alternative report of their own on the investigation, according to sources.

Sources said UNP Ministers Senasinghe and Perera openly faulted COPE Chairman and Auditor General at yester’s meeting in a threatening manner, demanding that they amend their findings. Minister Perera told the Committee that the Auditor General was neither the God nor the Buddha and others should not accept his word as the final. Perera became silent only when other members pointed out that it was unbecoming of an MP to threaten AG to change his report on the findings of an investigation conducted by his department. They said such action amounted to a punishable offence. Senasinghe wielding a photocopy of page one of The Island newspaper, which reported the proceedings of COPE on Thursday accused the COPE chairman of leaking the story to the media.Chairman Handunnetti vehemently denied the allegation.

The Chairman’s report concludes that there have been irregularities and malpractices of serious nature in the auctioning of treasury bonds from February 2015 to May 2016.

The irregularities and malpractices during the said period with Mahendran as the Governor of the Central Bank of Sri Lanka (CBSL) were proved beyond a reasonable doubt and it was revealed that they had caused the public and the international community to lose faith in the CBSL.

The COPE report recommends that severe punitive action be taken against those responsible for the bond scams. It also calls for the setting up of a committee or any other mechanism to monitor the progress of the implementation of the COPE recommendations and report it to Parliament.

Observing that Perpetual Treasuries company, owned by a relative of Mahendran has made massive profits during the period in question, the COPE report recommends that a special investigation be held into its financial gains. If that institution’s profit making resulted in any losses to the Central Bank, then the losses should be recovered from it, the report says.

The report also recommends the creation of a new mechanism to prevent occurrence of similar incidents in the future.

After eight members of the COPE had endorsed the report by placing their signatures thereon, the UNP MPs said that they would put out another report on the same issue.

The five UNP members, COPE Chairman, Auditor General and the COPE Secretarial staff stayed back after others had left the meeting around 1.30 pm, according to sources.

Sources said the COPE Chairman’s report on the bond scams would be presented to Parliament on Oct. 25 in spite of the UNP’s efforts to scuttle it. Finalising of the UNP report on Treasury bond scams had been postponed till Oct. 24, the senior COPE member said, adding that the UNP’s attempt to absolve Mahendran of what he did had failed at the end of 16-month long deliberations on the issue.
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