CB ordered to allow Auditor General to probe T-bond deals
View(s):Central Bank (CB) Governor Arjuna Mahendran and his Deputy Governor P. Samarasiri came under fire this week over their refusal to allow the Auditor General (AG) access to information pertaining to allegedly tainted Treasury bond sales. On Wednesday, they were intensively questioned by the Committee on Public Enterprises (COPE) over the refusal and eventually. Mr. Mahendran, who had been allowing his deputy to answer all the questions, responding to a question by COPE Chairman Sunil Handuneththi had agreed to provide the information before June 15, informed sources said. The Governor has denied any wrongdoing in a February 2015 bond deal which drew allegations that his son-in-law’s family firm, Perpetual Treasuries had unduly benefited from inside information.
After COPE at an earlier hearing had instructed the AG to submit details of bond transaction over a period of time, officers of the AG’s department had gone to the CB but on arrival were refused access to files. The visiting officers had then asked CB officials to give a letter in writing stating their refusal. Realising it would backfire on them, CB officials had then allowed ‘selective’ access to the files. “Even through this process AG officials were unable to get all the information that is required for a laid down format for audit. It appeared that the CB officials were trying to block the information and make it impossible to obtain,” one source said.
However when asked for reasons for the refusal, Mr. Samarasiri is learnt to have informed COPE that the CB took the position that this was sensitive information that cannot be divulged to the public. COPE members are learnt to have raised strong objections to this explanation and countered by saying that the AG is an authorised officer who also has provision to decide which is sensitive information and which is not. COPE, which is preparing the committee’s first ever quarterly report to Parliament, is learnt to havse completed the examination of 20 other state-owned organisations barring the CB. The banking regulator was ordered to furnish the information before June 15 and also provide access to the AG. The COPE report has been delayed due to the inability to get the required information on bond trades from the CB, the source said.