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Forensic bond audit reports: House debates a case of two wrongs making a right
What is almost certain to be the last sitting week of the Eighth Parliament turned out to be one of the most eventful in recent times.
While Parliament is due to sit next on March 3, both Government and Opposition MPs noted that President Gotabaya Rajapaksa will most likely dissolve Parliament on March 2, setting the stage for parliamentary elections in late April. It was in this backdrop that two key adjournment debates were held this week.
A two-day debate on the Forensic Audit Reports on the Central Bank Treasury Bond issue was held on Tuesday and Wednesday while Thursday was set aside for a debate on SriLankan Airlines’ scandal plagued Airbus deal.
The forensic audit debate moved by the Janatha Vimukthi Peramuna (JVP) saw Government and Opposition MPs clashing over the legality of the reports. The Government insisted that the forensic audits, conducted by international audit firms KPMG and BDO, could not be deemed legal as the Auditor General had no involvement with them. Some of them even questioned why Parliament was holding a two-day debate on a report which was “useless” given this issue.
State Minister Mahindananda Aluthgamage, who opened the debate on behalf of the Government, alleged that the reports had been prepared with the aim of clearing former Prime Minister Ranil Wickremesinghe, who was at the centre of the scandal. He said it was the lawyers who appeared for Mr Wickremesinghe at the Presidential Commission that probed the Bond issue who first mooted a forensic audit.
“The Government spent Rs 200 million to hire a corrupt agency in India to do this. This report has no legal basis. It speaks of misappropriation of Government funds. The Constitution is clear that such cases should be investigated by the Auditor General. The audits should be prepared in a way that enables legal action to be initiated against the culprits. We can’t do that using these reports. Hence, they are useless,” he told Parliament.
JVP MP Sunil Handunnetti, who moved the adjournment motion in Parliament, pointed out that the Auditor General too had recommended that the assistance of specialised institutions be obtained to probe whether there was any illegal activity in the issuance of Treasury Bonds, as such an investigation was beyond his scope.
Noting that the audit firms had compiled five reports that delved extensively into the matter, the MP said if the Government was serious about initiating legal action against the Bond scam culprits, it could refer to the fourth report which contained all the information in relation to the Bond scam committed in 2015 and 2016.
He appealed to both the United People’s Freedom Alliance (UPFA)-led Government as well as the Opposition United National Party to consider this as a heinous crime committed against the country and not to divide the issue on the lines of Mahinda Rajapaksa and Ranil Wickremesinghe.
UNP Parliamentarian Lakshman Kiriella pointed out that the report revealed that the EPF suffered losses amounting to Rs 9.8 billion from 2002 to 2015 due to investing in 17 bogus companies which he accused of being set up by associates of the then Central Bank Governor Ajith Nivard Cabraal. A further Rs 10 billion loss had been made due to the issuance of Treasury Bonds during that period. These losses had not been recovered, he stressed.
The previous UNP Government, in contrast, was able to recover the losses caused by Perpetual Treasuries by seizing its assets, he said.
State Minister Shehan Semasinghe pointed out that while the State suffered losses amounting to Rs 10.4 billion over a 13-year period from 2002 to 2015, the forensic audit revealed that a loss of Rs 9.7 billion was sustained from February 27, 2015 to March 2016. Moreover, the report has concluded that there is not enough information available about the 2002-2005 period, when another UNP Government was in power. “Whenever such scams have been committed, it is when a UNP Government was in power and Ranil Wickremesinghe was the Prime Minister.”
Joining the debate UNP parliamentarian Chimapika Ranawaka said the audits showed that the scams that occurred in 2015 and 2016 were not isolated cases and the Government needed to look into all these instances of fraud. He added that the Central Bank had kept interest rates intentionally low using EPF funds since 2008.
State Minister Vasudewa Nanayakkara said that while he was not opposed to debating the forensic audits in Parliament, he had to question why the then Government did not hold a debate on the report compiled by the Auditor General regarding Bond issues between 2005 and 2015. “This report was compiled at the request of then Finance Minister Ravi Karunanayake and submitted in January 2017. This was not debated because the Auditor General found nothing wrong. The forensic audits were commissioned because the UNP wanted a report that claimed wrongdoing from the other side too.”
JVP Leader Anura Kumara Dissanayake slammed both the Government and the UNP over their part in the Treasury Bond scams.
“This Parliament has descended to such depths where each side attacks frauds committed under their opponents while trying to whitewash those committed by their friends,” he said.
He added that many in the Government were accusing the JVP of siding with Wickremesinghe. “The Bond issue happened on February 27, 2016. I raised the matter in Parliament on March 16, within 20 days of it happening, explaining the involvement of Ranil Wickremesinghe, Arjuna Mahendran and his son-in-law,” he said.
He alleged that some UNP MPs came to COPE after listening to lectures by Arjuna Mahendran. Some even corresponded via SMS with Mahendran and Aloysius during COPE meetings. “Today, some MPs from the Government come after attending lectures with Cabraal,” he said.
“Today, you have become nothing but puppets whose strings are being pulled by wealthy fraudsters such as Mahendran and Cabraal. You are no longer people’s representatives, but representatives of crooks,” he remarked.