Attempt by government to protect Central Bank fraudsters
“It seems that the Parliament is about to discuss the constitution the government intends bringing in. The reports of the sub-committees are to be discussed. Still no date has been fixed to discuss the COPE report. This is why I requested the Speaker to take measures to discuss the COPE report during the first session of parliament next year. People may have suspicions if the process gets delayed. As a responsible political party, the JVP, after the COPE report was released presented to the country on 9th November, 2016 a series of proposals on immediate action that should be taken regarding recommendations in the report. We have a suspicion that the government is attempting to protect the perpetrators of the bond scam,” says the Member of the Political Bureau of the JVP and Chairman of COPE Parliamentarian Sunil Handunneththi. The Member of the Central Committee of the JVP Attorney-at-law Sunil Watagala also participated.
Mr. Handunneththi said, “As the Chairman of COPE that carried out an investigation regarding the bond incident in the Central Bank and as a member of the JVP that was actively involved in the struggle to bring COPE report to the Parliament I consider it is necessary to express our views again regarding the bond incident.
The report was presented to parliament on 28th October. Until now there hasn’t been any Parliamentary debate on this report. The budget debate was a justifiable reason for the delay until now. However, the report is a document that belongs to the Parliament. As such, it is the responsibility of the Parliament to give an opportunity for the Parliamentarians to take part in an open debate and set up a mechanism to implement recommendations in the COPE report and the report submitted by the Attorney General. The report includes a considerable amount of information regarding the bond transaction.
Once the new government came to power, for the first time, the Central Bank was detached from the Ministry of Finance and was taken under the Ministry of National Policies and Economic Affairs. This is how it comes under the Prime Minister. When Parliament was dissolved a debate on this transaction had already commenced. The first responsibility of investigating the loss to the Central Bank was with the Central Bank. When it didn’t happen there was a discussion in parliament. As a result of this discussion the Prime Minister presented Gamini Pitipana Commission report to Parliament on 19th May, 2015. As Gamini Pitipana report was inadequate the Speaker appointed a sub-committee on the 20th May to begin an investigation. Accordingly, the 7th parliament that met on 22nd May appointed a COPE subcommittee of 13 members. I too was a member of this committee. We held 11 meetings and recorded evidence from 42 witnesses. However, the subcommittee report was not able to be presented in parliament due to two reasons. The first is no approval by the main committee on the report and the second is the parliament was dissolved on 26th June. As such, the 7th parliament did not get any report on the bond issue.
Once the 8th Parliament commenced I was elected as the Chairman of COPE. There were 26 members in it. With the agreement of all we summoned Central Bank before us and after discussing many transactions of the Central Bank we decided to go ahead with the investigation regarding the discarded bond issue. It was not a task we were entrusted with. All members of COPE including me as the Chairman took the responsibility of re-investigating the issue. Accordingly, COPE commenced investigations on 6th May, 2016. 26 witnesses including former Governor of the Central Bank were summoned. The committee met 12 times. Meanwhile, the Auditor General handed over a report with sensitive information to the Speaker. The report of the COPE, compiled with evidence we gathered and the report of the Auditor General and all annexure were tabled in Parliament on 28th October. The report including the annexure has 3000 pages. It has 25 annexure, was printed in Government Press and distributed among all MPs. It is no longer a report of the COPE. It belongs to the parliament. As the final conclusion we have entered the authority the parliament has regarding this document. In it we say the Parliament that is responsible for all financial matters in the country, as stipulated in clause 148 of the Constitution, should hold an open debate on the report submitted.
As the Committee On Public Enterprises we have fulfilled our responsibility. It is the parliament that is responsible regarding state’s finances. It could be Central Bank bonds, the hedging transaction of the Ceylon Petroleum Corporation and an issue of another department. COPE looks after the affairs of state enterprises and Committee on Public Accounts (COPA) is responsible for government departments, local government councils and ministries. It is the authority parliament has on state finances. As all 225 MPs cannot get involved in these matters the two committees are appointed according to the political parties that represent parliament. It is a task fulfilled on behalf of the whole parliament. Accordingly, the report belongs to parliament. It is the Speaker who is head of parliament and after a meeting of party leaders the Speaker names a date for a debate on the report. Then the Parliament should decide action regarding recommendations in the report.
The report has 16 recommendations. The essence of the report is that the loss to the government due to the fraud should be recovered from the responsible parties. As those responsible for the financial crime committed we have identified former governor of the Central Bank and officials who directly got involved in the scam. Legal action should be taken against them. We have also proposed that measures should be taken to prevent such misappropriations. There are many parties for such action. The Ministry of Finance that represents Monetary Council, Central Bank (Investigations should be carried out if officials and broking company was able to commit the crime due to a defect in the Central Bank mechanism), the cabinet to monitor the Central Bank and we have proposed action that could be taken by the executive. The Central Bank should be able to take action even without the report. However, the whole country is watching what action would be taken in connection with the bond issue.
However, what we learn is that the parliament is about to discuss the constitution the government intends bringing in. The reports of the sub-committees are to be discussed. Still no date has been fixed to discuss the COPE report. This is why I requested the Speaker to take measures to discuss the COPE report during the first session of parliament. People may have suspicions if the process gets delayed. As a responsible political party, the JVP, after the COPE report was released presented to the country on 9th November, 2016 a series of proposals on immediate action that should be taken regarding recommendations in the report. We have a suspicion that the government is attempting to protect the perpetrators of the bond scam.
We ask the government to take the debate on the bond transaction as the first move of the parliament in the new year. It is the parliament that is responsible for the COPE report. The Prime Minister has referred the report to the Attorney General. The action he could take legally regarding the report is another matter. We believe that the decision regarding the report should be taken not by the Attorney General but by the parliament. It is the parliament that should decide whether an explanation for the Attorney General is necessary or not. Despite COPE not being an investigative mechanism, it has been proved that Perpetual Treasuries Ltd. has gained an illegal profit from the bond transaction. It is clear from their financial reports as well. All documents based on the recommendations have been included in the report. Hence, we expect the Speaker to take measures to hold a debate on the report soon.”
Mr. Handunneththi said, “As the Chairman of COPE that carried out an investigation regarding the bond incident in the Central Bank and as a member of the JVP that was actively involved in the struggle to bring COPE report to the Parliament I consider it is necessary to express our views again regarding the bond incident.
The report was presented to parliament on 28th October. Until now there hasn’t been any Parliamentary debate on this report. The budget debate was a justifiable reason for the delay until now. However, the report is a document that belongs to the Parliament. As such, it is the responsibility of the Parliament to give an opportunity for the Parliamentarians to take part in an open debate and set up a mechanism to implement recommendations in the COPE report and the report submitted by the Attorney General. The report includes a considerable amount of information regarding the bond transaction.
Once the new government came to power, for the first time, the Central Bank was detached from the Ministry of Finance and was taken under the Ministry of National Policies and Economic Affairs. This is how it comes under the Prime Minister. When Parliament was dissolved a debate on this transaction had already commenced. The first responsibility of investigating the loss to the Central Bank was with the Central Bank. When it didn’t happen there was a discussion in parliament. As a result of this discussion the Prime Minister presented Gamini Pitipana Commission report to Parliament on 19th May, 2015. As Gamini Pitipana report was inadequate the Speaker appointed a sub-committee on the 20th May to begin an investigation. Accordingly, the 7th parliament that met on 22nd May appointed a COPE subcommittee of 13 members. I too was a member of this committee. We held 11 meetings and recorded evidence from 42 witnesses. However, the subcommittee report was not able to be presented in parliament due to two reasons. The first is no approval by the main committee on the report and the second is the parliament was dissolved on 26th June. As such, the 7th parliament did not get any report on the bond issue.
Once the 8th Parliament commenced I was elected as the Chairman of COPE. There were 26 members in it. With the agreement of all we summoned Central Bank before us and after discussing many transactions of the Central Bank we decided to go ahead with the investigation regarding the discarded bond issue. It was not a task we were entrusted with. All members of COPE including me as the Chairman took the responsibility of re-investigating the issue. Accordingly, COPE commenced investigations on 6th May, 2016. 26 witnesses including former Governor of the Central Bank were summoned. The committee met 12 times. Meanwhile, the Auditor General handed over a report with sensitive information to the Speaker. The report of the COPE, compiled with evidence we gathered and the report of the Auditor General and all annexure were tabled in Parliament on 28th October. The report including the annexure has 3000 pages. It has 25 annexure, was printed in Government Press and distributed among all MPs. It is no longer a report of the COPE. It belongs to the parliament. As the final conclusion we have entered the authority the parliament has regarding this document. In it we say the Parliament that is responsible for all financial matters in the country, as stipulated in clause 148 of the Constitution, should hold an open debate on the report submitted.
As the Committee On Public Enterprises we have fulfilled our responsibility. It is the parliament that is responsible regarding state’s finances. It could be Central Bank bonds, the hedging transaction of the Ceylon Petroleum Corporation and an issue of another department. COPE looks after the affairs of state enterprises and Committee on Public Accounts (COPA) is responsible for government departments, local government councils and ministries. It is the authority parliament has on state finances. As all 225 MPs cannot get involved in these matters the two committees are appointed according to the political parties that represent parliament. It is a task fulfilled on behalf of the whole parliament. Accordingly, the report belongs to parliament. It is the Speaker who is head of parliament and after a meeting of party leaders the Speaker names a date for a debate on the report. Then the Parliament should decide action regarding recommendations in the report.
The report has 16 recommendations. The essence of the report is that the loss to the government due to the fraud should be recovered from the responsible parties. As those responsible for the financial crime committed we have identified former governor of the Central Bank and officials who directly got involved in the scam. Legal action should be taken against them. We have also proposed that measures should be taken to prevent such misappropriations. There are many parties for such action. The Ministry of Finance that represents Monetary Council, Central Bank (Investigations should be carried out if officials and broking company was able to commit the crime due to a defect in the Central Bank mechanism), the cabinet to monitor the Central Bank and we have proposed action that could be taken by the executive. The Central Bank should be able to take action even without the report. However, the whole country is watching what action would be taken in connection with the bond issue.
However, what we learn is that the parliament is about to discuss the constitution the government intends bringing in. The reports of the sub-committees are to be discussed. Still no date has been fixed to discuss the COPE report. This is why I requested the Speaker to take measures to discuss the COPE report during the first session of parliament. People may have suspicions if the process gets delayed. As a responsible political party, the JVP, after the COPE report was released presented to the country on 9th November, 2016 a series of proposals on immediate action that should be taken regarding recommendations in the report. We have a suspicion that the government is attempting to protect the perpetrators of the bond scam.
We ask the government to take the debate on the bond transaction as the first move of the parliament in the new year. It is the parliament that is responsible for the COPE report. The Prime Minister has referred the report to the Attorney General. The action he could take legally regarding the report is another matter. We believe that the decision regarding the report should be taken not by the Attorney General but by the parliament. It is the parliament that should decide whether an explanation for the Attorney General is necessary or not. Despite COPE not being an investigative mechanism, it has been proved that Perpetual Treasuries Ltd. has gained an illegal profit from the bond transaction. It is clear from their financial reports as well. All documents based on the recommendations have been included in the report. Hence, we expect the Speaker to take measures to hold a debate on the report soon.”
