Gazette notices pertaining to bond issues were backdated and misled public
Treasury Secretary Dr. R.H. S. Samaratunga has said that he was unaware about a ‘press statement’ issued by the Ministry of Finance until he saw it in the newspapers.
The Secretary, who is the chief accounting officer of the ministry, was giving evidence on Monday before the Commission of Inquiry probing the controversial Treasury bond issues, pertaining to a press statement published on a particular gazette.
The Commission comprises Supreme Court Judges Justice K.T. Chitrasiri, Justice Prasanna Jayawardena and retired Deputy Auditor General, Kandasamy Velupillai.
Dr. Samaratunga said that though the press statement appeared under the title of the Ministry of Finance, he did not know who inserted it and it was issued without obtaining his approval or concurrence, though the contents of the statement are correct.
Leading evidence, Additional Solicitor General (ASG)Yasantha Kodagoda PC referred Dr. Samaratunga to the Appropriation Act No.41 of 2014 on the 2015 budget which was amended in 2015 and in particular referred to Section 2(I) of that Act on the raising of the loans for the Government should necessarily be allowed in terms of the law and the Government may borrow money by having recourse to the issuance of Treasury Bond.
Dr. Samaratunga said he is aware that the Registered Stocks and Securities Ordinance (RSS Law) which provides for the issuance of Treasury Bonds was originally enacted in 1937 and it has been amended up to 2004.
He agreed that the RSS Law confers upon the Minister in charge of the subject of Finance the statutory obligation by way of gazette notification to publish the information –viz. the sum of money to be raise; mode of the raising the loan and the manner in which that loan is to be raised; the rate of interest payment to the loan or the method of determining the interest payable; the date on which the interest on the loan shall be payable, etc and the maximum period referred to as tenor of the Treasury Bonds not to exceed 60 years.
He agreed that there should be a gazette notification by the Minister of Finance of his intention to raise Treasury Bonds and that there is an obligation part in terms of Section 5 of the Ordinance on a person called the Registrar and in the absence of the interpretation of that term, is the Superintendent of the Public Debt Department.
ASG Mr. Kodagoda pointed out that any person who fails to comply with any provisions of this ordinance or any regulations or direction given thereunder shall be guilty of an offence under this ordinance.
The Commission noted that this legal requirement has not been followed for years and the Central Bank has indicated that it is not practicable which is manifest by gazette notices which are published or issued for several years.
When the Commission pointed out that the question is can the Central Bank say that they cannot comply with Section 4 (I) and then made a publication in the newspapers giving all the information that is required by that law for which Dr. Samaratunga said that he cannot comment on that.
When asked whether the contents or the draft notice is given to the Minister of Finance some days before the auction and the Minister could have issued the gazette notification, Dr. Samaratunga agreed.
He said that he did not have any knowledge, when ASG Mr. Kodagoda showing the document asked him whether he is aware that the Central Bank had over a period of time after the sale of several series of treasury bonds compiled a document containing information relating to the auctions that has already been taken place. And successfully got those notices published in the government gazette by way of antedating (backdating).
He said he was not aware of relying on Section 4(i) of the RSS Law and the Central Bank had been in the habit of getting those gazette notifications antedated and whether those gazette notifications order signed by the Minister.
ASG Mr. Kodagoda referred him to the evidence relating to the cash flow requirements of March 2015 and in particular drew the attention to the cash flow requirement of having to raise Rs. 13.55 billion by March 2, 2015 and asked whether there was a need to raise more than Rs. 13.55 billion, which Dr Samaratunga said that he cannot recall.
He said that he cannot recall attending a meeting with the participation of the Minister of Finance along with the then Governor, Arjuna Mahendran, with regard to the auction on February 26, 2015. Explaining, he said he couldn’t recall as there were several meetings.
He was told to refresh his memory as it is critical as the focus of the Commission is relating to the policy requirements as at the end February 2015 and the cash flow necessity which had to be fulfilled by March 2, 2015. It was a critical decision that Dr. Samaratunga would have kept the minutes of that meeting to which Dr. Samaratunga replied that in these meetings various people attend these meetings and they keep minutes.
ASG Mr. Kodagoda indicated that at this particular meeting, if Dr. Samaratunga could recollect certain vital decisions were to be taken that has to be implemented shouldn’t he made appropriate notes of such critical decisions to which the Treasury Secretary responded saying that if there were decisions at the meetings chaired by the Minister, people who make decisions and agencies implement those decisions.
When he was asked that the decisions that regulated by law was taken at such meetings have as Secretary to the Ministry of Finance taken notes in order to ensure subsequent implementation, he said that the Minister’s meetings are run by the Minister’s departments and not by them. Any meetings conducted by those under his (Secretary’s) departments the minutes are taken down and implemented.
During the afternoon session the evidence of Acting Government Printer, Ms. G K Liyanage was recorded and her evidence too was led by ASG Mr. Kodagoda.
She said that printing of the Government Gazette is one of the important activities of the Government Printer.
She conceded that there has been issuance of antedated gazette notifications with regard to the issue of Treasury Bonds, and certain information are suppressed from English and Tamil readers. She also conceded that thereby the public is given misleading and false information.