White collar greed
View(s):
Finally it happened, after more than four years. Sri Lanka’s biggest white collar crime in decades came to courts last week with indictments being filed in the Central Bank bond scam against nine persons and chief culprit firm Perpetual Treasuries Ltd (PTL), by the Attorney General.The accused are former Central Bank Governor Arjuna Mahendran, former Central Bank Deputy Governor P. Samarasiri, Perpetual chief Arjun Aloysius, PTL CEO Kasun Palisena and Arjun’s father Jeffrey Joseph Aloysius among others. The accused have been asked to appear in court on July 19.
The issue has been dragging on for four years ever since the first bond scam (to be followed by another in 2016) in late February 2015, less than two months after Maithripala Sirisena’s stunning UNP-backed win at the presidential election.
As I pondered this morning on the whole saga while reading about the indictments in the local newspapers, I could hear Kussi Amma Sera’s raised voice from under the Margosa tree.
From their conversation I gathered she and her “amba yahaluwo (mango friends)” – Serapina and Mabel Rasthiyadu – were also reading newspapers while having their morning cup of tea prepared by Kussi Amma Sera. I was also having my cup of tea and reading the newspapers. We were all on the same page!
“Aiyo apey ratata mokada venne (what is happening to our country),” a resigned Serapina asked, reading about a local politician being hauled up in courts for alleged rape.
“Why are our politicians working for themselves (aei ape desapalana-yan egolantama witharak veda karaganne?” interjected Kussi Amma Sera.
Mabel Rasthiyadu then said angrily: “The way the country is going … we will be bankrupt very soon (Me rata yana vidiyata……api ikmanin bankolot venava).”
They continued their conversation, often in angry tones – a reflection of how people perceive the state of the country these days – while I continued to enjoy my morning cup of tea while reading the newspapers. It was then that the phone rang. Who was it, I asked myself.
It was Seeni Bola, my banker friend who got his nickname from friends after once boasting that compared to his bank other banks were handling ‘seeni bola’ (small) deposits. Seeni Bola is an authority on banking and the corrupt bond issue and much as I wanted to enjoy an uninterrupted morning while writing about the bond saga, I relished a conversation with Seeni Bola whose views on the bond issue would, I believe, enhance the column.
For the record and to add my 2-cents worth to the saga, the Business Times was among the first to expose the first shady transaction where PTL was given inside information of an increase in the bond issue offer (from Rs 1 billion to Rs. 10 billion). In a March 8, 2015 story headlined “CB Governor faces ‘family company’ charges; calls mount for probe”, the Business Times reported that “the Government yesterday, amidst growing opposition calls for an independent probe, launched an investigation into allegations of ‘insider trading’ and favouritism in a Treasury bond issue on February 27 involving the recently appointed Governor of the Central Bank (CB) and his son-in-law – allegations that rocked Colombo’s banking sector this week”.
Last week, newspapers said that the nine persons have been accused of committing criminal misappropriation in respect of treasury bonds to the face value of Rs. 10 billion resulting in a loss to the government of Rs. 688 million. The Attorney General had also presented a million pages of productions/evidence to courts. An article in the Business Times, published a few months after the crime, in an analysis by a financial expert, put the loss at Rs. 900 million and this figure is the loss only on the first deal. The Auditor General’s figure of the estimated loss was also Rs. 688 million.
“Aney, mokada vune? Meka Sunil Aiya-ge sinduwa wage – ‘I don’t know why … Ehema wenne aei (What happened? This is like Sunil’s song),” Kussi Amma could be heard saying.
When I picked up the phone to take Seeni Bola’s call, my thoughts had drifted a bit until Seeni Bola brought me back to earth. “I say … Are you listening? The government valuation of the loss as per the court case is a very low figure,” he said.
I agreed, saying: “You’re right. It should be in billions of rupees.”
“The estimated loss incurred due to the bond scam was Rs. 8.5 billion as reported to the Presidential Bond Commission. It was reported that the Employees’ Provident Fund (EPF) and other government institutions had lost more than Rs. 8.5 billion following the bond scam,” he said.
He was right. The losses suffered by the EPF which bought bonds from the secondary market from suspect PTL, in a cozy deal which implicated some dealers at EPF, surprised the market. EPF should have bought these bonds in the primary market at a profit, as the fund is also a primary dealer.
“I say..….the loss to the government can be equated to almost the cost of building a new highway or providing new buildings, desks and chairs and more teachers to schools,” said Seeni Bola.
I again went into ‘thought-mode’, while Seeni Bola kept on talking on the phone. Now that indictments have been filed, the process is clear for the government to seek the extradition of Arjuna Mahendran from Singapore where he is a permanent resident and citizen. Singapore authorities had earlier indicated that since there were no indictments or cases filed against Mahendran, an extradition process cannot be initiated.
Will this case be in full swing before elections happen around October-November or will it be the usual slow process as often seen in local courts?
“Are you listening?” said Seeni Bola, interrupting my thoughts, again. “Yes… yes,” I said hurriedly. “As I said, now they can extradite Mahendran to face what one would call the biggest corruption case in decades,” he said.
We then got into a long conversation as to whether the government was sincere in this effort or whether it was a poll-catching mechanism and would drag into the poll-period to boost the government’s stock.
I could hear Kussi Amma Sera singing lustily: ‘Dinapuhama mora wage mahath wenne aei (How do they – politicians – get fat like a shark after winning)’ and ‘Peradunama huna wage kettu wenne aei’ (How do they get thin like a gecko after losing an election’, dancing away as she brought in a second cup of tea, a practice in the past few months.
“Aney mokada wune Mahattaya (What happened, Sir?),” she asked with a smile. I smiled back having no response to a commonly-asked question by Sri Lankans.