Sirisena & Wickremesinghe Should Not Betray The People Who Elected Them To Power
Veluppillai Thangavelu
All’s Well that Ends Well is the title of a humorous play (written between 1601 and 1608) by William Shakespeare about the relationship between the two main characters, Helena and Bertram. These days the expression is used to say that a difficult situation has ended with a good result.
The political turmoil and upheaval that gripped the Unity Government during the past few months have come to end with the defeat of the No Confidence Motion (NCM) moved by the United Opposition against Prime Minister Ranil Wickremesinghe in parliament on April 4, 2018. The NCM was defeated by a convincing margin of 46 votes, 122 against and 76 in favour. Twenty- three MPs were absent. The SLFP/UPFA was badly divided, 16 MPs/Ministers voted in favour while 25 were absent.
When the NCM was handed over to Speaker Karu Jayasuriya on March 10, it was signed by 55 MPS, 51 from the SLPP and 4 from the SLFP/UPFA. This number increased to 76 at the time of voting, that included 6 JVP MPs. Therefore, there was a net gain of 15 MPs all coming from the SLFP/UPFA. It was a pity, Sirisena faction of the SLFP/UPFA could not present a united front either to vote in favour or to abstain. It may be recalled that all the SLFP/UPFA MPs worked against President Sirisena during his presidential election campaign. They joined Sirisena for the sake of Ministerial portfolios and perks. They are like the fish, cannot survive without full or half Ministers!
Incidentally, in the history of Ceylon/Sri Lanka, this was the 3rd NCM moved against a sitting Prime Minister. The first one was in 1957 against SWRD Bandaranaike in 1957, followed by an NCM against Srimavo Bandaranaike in 1975.
The stability of the Unity Government was shattered by the well publicised Treasury bond scam that took place on February 27, 2015. Questions arose as to the competence and integrity of the Government of Sri Lanka (GOSL) and the Central Bank of Sri Lanka (CBSL). There were also allegations of insider dealing. The allegations of insider dealing involved a private company named Perpetual Treasuries Limited (PTL) owned (major shareholder) Arjun Aloysius, the son-in-law of the then Central Bank Governor Arjuna Mahendran. This family connection gave the critics a long stick to beat the Prime Minister under whom the Central Bank operated.
Arjuna Mahendran was a Singaporean citizen hand-picked by Wickremesinghe for the job of Governor. There was opposition to his appointment within his own party, but Wickremesinghe brushed it aside. He wanted a professional with wide experience in international financing to be placed in charge of the Central Bank.
However, the trust placed by Wickremesinghe was betrayed by Mahendran when he had a clear case of conflict of interest since his son-in-law was the major shareholder of PTL, a primary bond dealer which bought Rs.11.5 bn worth of bonds. It is claimed Arjun Aloysius offloaded the bonds to secondary dealers (state entities) earning huge profit out of the deal.
It was also alleged,
(1) The amount of debt accepted by CBSL at the auction was vastly in excess of the amount that had earlier been communicated to the primary dealers who would bid at the auction. Whereas the original announcement was for Rs. 1bn, the amount accepted at the auction was Rs 10bn.
(2) Why issue 30-year bonds as opposed to those of shorter tenor.
(3) The interest rate resulting from the auction was much higher than the rate indicated by CBSL to the primary dealers before the auction, thus the country sustained a very large debt at an unnecessarily high rate of interest.
(4) The reasonable suspicion Perpetual Treasuries acquired inside knowledge.
Prior to March 1997, the CBSL issued Treasury Bills to borrow funds. This was changed in 1997 when the CBSL switched from Treasury Bills to Treasury Bonds and only Primary Dealers (PDs) were allowed to place bids.
Out of sixteen PDs, nine were affiliated with banks and seven are private non-bank companies. Among these is Perpetual Treasuries, the company at the center of the storm.
