Home / Front Page/ Bond Commission concedes Aloysius cannot be compelled to testify

Bond Commission concedes Aloysius cannot be compelled to testify

Comments / {{hitsCtrl.values.hits}} Views / Thursday, 14 September 2017 00:19

By Himal Kotelawala

The Presidential Commission of Inquiry (PCoI) looking into the controversial Treasury bond issuance yesterday conceded that Perpetual Treasuries Ltd. (PTL) former Director Arjun Aloysius cannot be compelled to testify before the commission if he refuses to do so.

Asserting that Aloysius is still very much a necessary witness whose evidence would remain relevant and material, the commission noted that the rule of law - which, in this case, guarantees Aloysius the right to refuse to give evidence - must take precedence over any considerations of public interest.

Issuing a nine-page order on the matter, the three-member commission said that, taking into account the points raised by Aloysius’ attorney President’s Counsel Gamini Marapana on Tuesday objecting to his client being compelled to testify as well as the counter-submission by Acting Solicitor General President’s Counsel Dappula de Livera who made a strong case for bringing Aloysius to the witness stand, the PCoI stands by its opinion that Aloysius is required to give evidence but if he’s unwilling to do so his counsel may make an application to that effect.

Following the order, Marapana informed the commission of his client’s decision to not give evidence. However, PCoI Chairman Justice K. T. Chitrasiri directed Marapana to carefully peruse the order and let the commission know today whether or not Aloysius still wished to remain silent, to which Marapana agreed.

Meanwhile, De Livera said he would consult the Attorney General on the contents of the order.

Aloysius is expected to be present at the PCoI today as his counsel formally submits the application expressing his unwillingness to testify. 

Reading out the order, Justice Chitrasiri observed that so far the commission has heard the evidence of 50 witnesses, and given the assortment of evidence before it, it was “desirable” that Aloysius give evidence regarding several matters pertaining to PTL including, inter alia, the reasons for the company bidding for large amounts of treasury bonds at some bond auctions, transactions in the secondary market, dealings and relationships that existed between PTL officers and some Central Bank of Sri Lanka (CBSL) officers as well as officers of the Employees’ Provident Fund (EPF), Pan Asia Banking Corporation (PABC) and other primary dealers, whether PTL was in possession of information relevant to bond auctions that was not available to other primary dealers, profits and/or capital gains received by PTL as a result of said bond transactions, and the disposal of such profits and/or capital gains in the form of dividends, fund transfers and transfers of profits (if any) and investments.

Justice Chitrasiri said the commission also required evidence from Aloysius with regard to several matters directly within his personal knowledge including the latter’s relationship with former Central Bank Governor Arjuna Mahendran, the role played by Aloysius in obtaining a primary dealer’s license from CBSL and in the day-to-day operations of the company while he was still serving as its Chief Executive, the reasons for his resignation from that post. 

Evidence was also sought, according to Justice Chitrasiri, regarding audio recordings of telephone conversations said to have taken place between him and current PTL CEO Kasun Palisena, and on the nature of the relationship between Aloysius and some officers of CBSL, EPF and the previous Chairman of PABC. The reasons for Aloysius leasing an apartment that was occupied by former Minister Ravi Karunanayake and his family were also mentioned as relevant.

“We are of the view that Mr. Aloysius is in a position to provide valuable and relevant evidence to the Commission of Inquiry with regard to the aforesaid matters and other matters which have transpired from the evidence that is now before us by way of the testimony of witnesses, documents and several audio recordings,” the PCoI order said.

“We are also of the view that Mr. Aloysius should be given the opportunity to provide his explanations and clarifications and other responses with regard to several of the aforesaid matters,” it added.

In his objection to the summons issued to his client, Marapana on Tuesday told the commission that he had advised Aloysius that giving evidence would not be in his interest given the possibility that evidence elicited from him may very well prejudice his right to a fair trial later on and, on those grounds, Aloysius could not be compelled to testify against his wishes.

Citing Article 3, Article 13 (3) and Article 13 (5) of the Constitution of Sri Lanka, Marapana said that any person charged with an offence shall be entitled to a fair trial and shall be presumed innocent until proven guilty. 

He also submitted that according to Section 24 of the Commissions of Inquiry Act, the Attorney General is empowered to institute criminal proceedings in respect of any offence on material collected in the course of the investigation.

‘Travesty of justice’

In response, de Livera on Tuesday submitted that the proceedings before the Bond Commission were inquisitorial in character and were therefore different from proceedings in a criminal case which are adversarial by nature. 

Considering that the commission was not empowered to convict anyone of any wrongdoing, de Livera stressed that the principle of law that an accused person cannot be compelled to give evidence need not apply in this case. De Livera went as far as to say that not calling Aloysius to the witness stand would be a “travesty of justice.”

In its order yesterday, the commission said that having given “careful consideration” to the submissions made by both President’s Counsels, it intends to continue to stay within the confines of the law.

While an accused can choose to give evidence on his own behalf, observed the commission in its order, the law prohibits him being compelled to give evidence - a rule derived from Section 4 of Ordinance No. 9 of 1852 which is partly reflected in section 120 (6) of the Evidence Ordinance, which states: “In criminal trials the accused shall be a competent witness on his own behalf.” 

The resulting position, said the commission, is that the English Law rule that an accused cannot be compelled to give evidence prevails in Sri Lankan law too, by operation of Section 100 of the Evidence Ordinance.

“Since the rule that an accused cannot be compelled to give evidence is well established and must be followed, the remaining question is whether that rule can or should be applied to the proceedings before this Commission of Inquiry which are not criminal in character. Instead, as Mr. de Livera, PC, cogently emphasised, the proceedings before this Commission of Inquiry are of a fact finding character,” the commission said, adding that Section 16 of the CoI Act needs to be examined in order to determine whether the rule applies to Aloysius.

Section 16 of the CoI Act envisages three categories of persons: namely, persons who are implicated in the matter under inquiry, persons who are concerned in the matter under inquiry and persons who consider it desirable that they should be represented.

“The submissions made by Mr. Marapana, PC, that his client might incriminate himself if he is compelled to give evidence and that there is every possibility of a charge or indictment being made against his client in the event of and subsequent to his client giving evidence, lead us to conclude that Mr. Aloysius must consider himself as a person who is ‘implicated in’ the matter under inquiry, as contemplated by section 16,” the Commission noted.

The commission said a question would arise, if Aloysius is compelled to testify, if any action taken against him by the Attorney General had its origins, at least partly, in the evidence he was forced to give.

If the answer to such a question is in the affirmative, this commission would have acted in disregard of an established and well-founded rule of law, the order said.

Adhering to the law

“We do not consider it fitting to depart from this rule of the law by adopting the somewhat artificial device of compartmentalising these proceedings from a criminal prosecution which may ensue and which, apparently, Mr. Aloysius considers likely to ensue,” the commission said, adding that if it were to engage in such a tortuous compartmentalisation, it may tempt a charge that all those who were responsible for compelling Aloysius to give evidence were “overzealous” in the words of Sir Rupert Cross.

Under these circumstances, the commission said, it is not inclined to compel Aloysius to testify if he is unwilling to do so.

While it fully appreciates and agrees with Livera’s submission, the commission said it is not willing to depart from established and salutary principles of law in the pursuit of its efforts and commitment to achieve its mandate. If Aloysius refuses to testify, the commission will be compelled to proceed on the basis of the evidence it possesses, it added.

“We wish to emphasise that, while the Commission of Inquiry is committed to fulfilling and discharging our mandate, we are duty bound to act lawfully when doing so. The rule of law must take precedence over any considerations of public interest,” the Commission said in its order.

The commission was emphatic that it believes Aloysius is required to give evidence as it considers his testimony is “relevant and material” and as he should be given the opportunity to explain matters - hence the summons.

“Therefore, Mr. Aloysius is hereby directed to appear before us in response to the Summons served on him and to give evidence today or on such other day or days as this Commission of Inquiry may fix. However, if Mr. Aloysius is unwilling or refuses to give evidence and that, therefore, on application, mutatis mutandis, of the rule of the law that an accused cannot be compelled to give evidence, which Mr. Marapana, PC, has relied on when he took that same objection, Mr. Aloysius must not be compelled to give evidence. In the event counsel for Mr. Aloysius chooses to make such an application, we will be duty bound to act in terms of that rule of the law and refrain from compelling Mr. Aloysius to give evidence,” it said in conclusion.

PTL CEO and other chief dealers were part of a ring: DSG

Leading evidence from Perpetual Treasuries Ltd. (PTL) Kasun Palisena, Deputy Solicitor General Milinda Gunatillake yesterday alluded to a “ring” which he said was involved in selling government securities to the Employees’ Provident Fund and other state institutions.

Having played audio recordings of several telephone conversations between Palisena and, among others, a chief dealer attached to a leading development bank, Gunatillake said that there was a ring consisting of former Central Bank employees and other individuals attached to several financial institutes that sold government securities - Treasury bonds - to the EPF, the Sri Lanka Insurance Corporation and other government institutions.

Palisena denied the existence of a ring. He also refuted Gunatillake’s suggestion that documents submitted by PTL pertaining to some transactions between companies belonging to the Perpetual Group were “largely fictitious” given that they had not been reflected in CBSL’s Lanka Secure system.

“They were money from one pocket of Arjun Aloysius to the other,” said Gunatillake.

Palisena said, in response: “I disagree that the transactions were fictitious.” The PTL CEO’s bonus, which turned out to be a percentage of profits, also came up in yesterday’s proceedings, as the Deputy Solicitor General noted that his bonus for the year 2014/2015 was eight times that time of the next highest bonus earner. It was a similar figure for the following year, he said.

Gunatillake remarked that Palisena has a “big stake” in the company, which Palisena denied, adding that he gets a salary.

The Deputy Solicitor General, however, countered that Palisena in fact got a profit share/bonus which he said explained the manner in which had given evidence before the commission. “I disagree,” said Palisena. In reference to a call between the PTL CEO and the dealer from the development bank pertaining to a switch where the former asked the latter about how much his bank had made in profit, Commissioner Justice Prasanna Jayawardane asked Palisena why he was so interested in this information.

Palisena claimed that this was in order to promote more switches, to which Justice Jayawardena responded, in a lighter vein, “You earned your bonus, Mr. Palisena.”

The hearing will continue today.


Share This Article


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

A brief guide to the legal system of China

Thursday, 21 June 2018

The law of the People’s Republic of China (PRC) is officially referred to as the “socialist legal system with Chinese characteristics”. The formation and development of the socialist legal system with Chinese characteristics are compatible with

The evolution of CSR towards Creating Integrated Value

Thursday, 21 June 2018

Creating Integrated Value (CIV), a term that I coined in 2014, is a concept and practice that has emerged from a long tradition of exploring the role of business in society. It has roots in what many today call corporate (social) responsibility or CS

Let’s educate ourselves for change!

Thursday, 21 June 2018

Ordinary Level Examinations are over. Results are in. What should I be doing at Advanced Level? Science, Commerce or Arts? And what subject combinations? This always is a burning question for some and also for parents. This question is usually answe

Dudley Senanayake, the principled leader who was never power hungry

Thursday, 21 June 2018

Though I have seen Dudley Senanayake speaking in meetings, my first face-to-face meeting with him took place in 1970. Given that it was immediately after United National Party’s crushing defeat at the general election, he was in a very sombre mood.

Columnists More