The A to Z of Lanka’s bond issue
It’s been the talk of the town in 2017. To jog memories and as we get ready for the final report on the Bond saga, most likely next week, we take a light-hearted look and add our two cents in an A to Z dissection of this hot topic of discussion which has had the knickers of everyone, from politicians to the media, in a mighty twist.
A is for Arjun
In the beginning there was Adam. But in Sri Lanka, it was Arjun at the genesis. Or was it Arjuna? Once again it boils down to that age-old philosophical question, what came first, the chicken or the egg?
B is for Bond
Obviously. Like that man Bond, this version, the Treasury Bond is also an arcane subject, mysterious and deep to the man on the street. Both had a license to thrill, but at the end of the day, the latter Bond has left us shaken as well as stirred at the audacity of it all.
C is for Commission
The President-appointed Commission of Inquiry established in February 2017 to probe the alleged Corruption. Its predecessor was COPE, two parliamentary gatherings which generated a lot of hot air, Controversy and footnotes. But the feared C-word was Calls. This put a lot of people in hot water including someone called RK.
D is for Development
It was all in the name of development that the first reported Treasury bond auction took place in February 2015. The government needed Rs.15 billion urgently to pay some highway bills. Or was it Rs.75 billion, the figure which cropped up in an undated letter issued to the then Central Bank governor by the then Finance Minister. Talk about the road to riches ending in Despair.
E is for Easy-Pickings-Fund
A synonym for the EPF – Employees Provident Fund – which purchased bonds at inflated prices from the secondary market giving extravagant profits to the company in the eye of the storm. Pump up the price and then dump. Easy pickings, indeed.
F is for Fearless
Our Fearless Prime Minister. This is what Ranil W was labelled in posters that mushroomed all over the city last month, one day after he appeared before the Commission which apparently bewildered everyone despite the PM having sent an affidavit answering all its queries on his involvement in the controversy. We believe he used another F-word when he got the summons.
G is for Governor
The man in the hot seat. Former Governor of the Central Bank, Arjuna Mahendran, who gave up a cushy life in Singapore to take up the onerous position that has turned the few hairs on his head gray. Recommended to the position by the PM, Arjuna came under fire for allegedly favouring his son-in-law’s company which traded in bonds.
H is for History
If we can step back into the past, we find that dubious government bond deals at the Central Bank, are not a new phenomenon. Cronies of people in power have benefited in days gone by too. Everyone has been making hay while the sun shines.
I is for Inquiry
There are lots of I’s in the long-winded name of the body set up to look into the controversy. The Commission of Inquiry to Investigate and Inquire into the Issuance of Treasury Bonds. Repetitious and redundant to say the least. But that is government-speak at its best. Let’s hope the findings of this Commission are more succinct and clear-cut.
J is for Justice
This is what the public hopes the three-member commission appointed by President Maithripala Sirisena will deliver. The trio, Supreme Court Justices K.T. Chitrasiri and Prasanna Sujeewa Jayawardana and retired Deputy Auditor General Kandasamy Veluppillai have had a thankless task sifting through the mind-numbing intricacies of how the system works, or as might be the case, didn’t work. They will now write a report recommending what course of action should be taken.
K is for Knowledge
This is the crux of the entire story. Did the people involved have privileged Knowledge of what was going on so that they could make the big bucks, or to put it in simpler terms was there any insider trading happening? As they say ‘too much of knowledge is a dangerous thing’ for the more we know, the more we suffer.
L is for Little Johnny
The code name of one of the informants who was paid heavily for apparently passing on market sensitive information. Legend has it that in Olde England, Little John was part of Robin Hood’s band of merry men who stole from the rich and gave to the poor. In our version, Little Johnny did it the other way. He was merry too.
M is for Monarch
Those apartments where ex-Finance/ex-Foreign Minister Ravi Karunanayake owned a fancy penthouse. A fitting name for an abode of a person who believes he will one day be King – although right now he is just a back-bencher.
N is for Naivety
In hindsight, it seems that many central figures in this saga thought they were untouchable. That is why they went so far cooking up this scheme which has cost the country billions. Was it arrogance or just a naïve belief that they could get away scot free with any underhand deal?
O is for Oblivious
Ignorance is bliss and former cabinet minister Ravi K believed firmly in this. Or how else can you explain his admission to the Commission that he did not know how the apartment he lived in was fully paid for – initially on lease (monthly Rs.1.45 million) and later bought (Rs.165 million) – with all the monies given by the company in the maelstrom. O is also for Ouch.
P is for Perpetual
One thing is for certain the company in the eye of the storm, Perpetual Treasuries Ltd, has lived up to its name and will not be forgotten in the annals of bond trading. The audacious pump and dump scheme was the envy of all the other primary dealers left in their wake. They made billions while others were scratching around. No wonder it raised suspicions that something was rotten, somewhere.
Q is for Questionnaire
The famous list of questions sent to the PM after his name cropped up from time to time at the Commission. His answers were sent through an affidavit but that was not enough to sate the appetite of the headhunters. They wanted to see him in person to clarify his position. He agreed and turned up accompanied by 33 parliamentarians and senior members of the UNP. Safety in numbers, huh!
R is for Recordings
If this was a soap opera, then the revelation that investigators had phone Recordings of all the principal actors would have been the mother of all climaxes. Nothing like a good eavesdropping to make things interesting. And there were enough juicy disclosures which seem to have caught the protagonists with their pants down.
S is for Savings
The EPF, set up in 1958, is a savings scheme covering all employees in the private sector and corporation sector. The minimum and mandatory amount to be paid by the employee is 8 per cent and the employer is 12 per cent. The main objective is to provide social security or protection at old age, or in the event of death, to dependents. Its current asset base is around Rs.1.9 trillion. A juicy target.
T is for Tango
The code name for one of the dealers Perpetual had allegedly made payments to in exchange for confidential price sensitive information. They worked for the National Savings Bank, Sri Lanka Insurance Corporation, the EPF and DFCC, all institutions that bought bonds from Perpetual on the secondary market. The prosecution had a word for these payments – bribes.
U is for UNP
The Uncle-Nephew Party that finds itself hot under the collar with the allegation that all this money was to fund them in the future. U is also for Unisize – if one size fits all then it is only fair that all other accusations against other parties/people/regimes also be investigated. There is no need for a U-turn, no? That would be Unethical.
V is for Victim
The poor man on the street is the one who has to pay for all this wheeling and dealing. Having worked for 30 years or more, Citizen Silva thought his savings were safe only to find that the EPF was being plundered unashamedly. Vat a pol mess. Vat to do?
W is for Whodunit
If this was a classic mystery, the culprit would only be revealed in the final pages. But in this case the guilty party/parties have already been identified and all that’s taken place over the last few months is to uncover what and how it all took place. But shouldn’t you be presumed innocent first? Not in Sri Lanka where people are only too willing to find you guilty as charged.
X is for X-travagance
The money paid to dealers providing sensitive information to Perpetual is mind boggling. An EPF dealer identified as Charlie was paid Rs.94 million between a six-month period in 2014. And this was before this particular ‘bond-scam’ began. Extravagance is the catchword. If a lowly dealer is paid so much, just imagine what the profits are. Billions.
Y is for Yahapalanaya
Come on admit it. Without this ‘good governance’ government, we would not have the chance to watch this drama being played out in plain view and stridently in the media. Could this have happened a few years ago? Of course not. If there is a silver lining to all of this, which is that as far as freedom of expression is concerned, we are a healthy and vibrant society.
Z is for Zymotic
A medical term for a contagious disease. Corruption is also contagious. Are we all free of sin? Don’t tell me that all our politicians have shunned commissions (of the other variety). Don’t tell me that big business doesn’t rely on inside information. Don’t tell me that you wouldn’t slip a buck to a policeman to look the other way. Don’t tell me you wouldn’t line the palms of a government official to expedite matters. Yes, corruption can be contagious. And at the end of the day, remember that all of this is a political issue and not just a bond issue. This big show is because it is politically expedient to put on one now. For, how many other big fish who cost the state huge bucks in the past have been prosecuted? Zero, zilch.