Cabraal calls for swift punishment of bond scammers

Monday, 6 January 2020 01:13 -     - {{hitsCtrl.values.hits}}



  • Launches new book on bond fiasco, makes recommendations to Govt.

  • Says 2015 bond scam was premeditated 

  • Calls for those responsible to be named and shamed, civic rights revoked

  • Questions why matter was not investigated by Police as fraud

  • Charges that Presidential Commissions, CoPE inquiries were smokescreens

  • Questions authenticity of forensic audits which cite Cabraal multiple times

Senior Economic Advisor to the Prime Minister and former Governor of the Central Bank Ajith Nivard Cabraal on Friday renewed his condemnation of the bond scam, making widespread revelations as well as listing measures that the new Government could take to put those responsible behind bars.

“Enough is enough, and now I suggest to the Government that a new comprehensive legal inquiry be held soon, and those responsible should be named and shamed, deprived of their civic rights, and put in prison,” Cabraal charged at the launch of the book, titled “The Great Bond Scam Cover-Up: The Mother of All Cover-Ups”, authored by him. He said the book was a two-year project to compile evidence on the bond scam and the subsequent State-enabled cover-up.

“I would advise the Government to investigate and bring to book all responsible parties within one year, so much time has already been wasted on the matter,” he told Daily FT. 

Cabraal also recommended several other measures for the Government to take. These included implementing the required administrative procedures and governance structures to prevent political interference in technical subjects, such as the bond-issuing procedure of the CBSL, and ascertaining whether the funds earned through the bond scam were used to finance the election campaigns of certain politicians, and name such politicians.  

He charged that the 2015 bond scam was premeditated, and that prompt denial by some authorities underscores that it was well-rehearsed. 

Cabraal used the occasion to thank whistle-blowers, CB officers, journalists, and others who had worked tirelessly to inform the public and keep the bond scam story alive. The book is dedicated to them. “If not for the few whistle-blowers, journalists, commentators, and CB staffers, the bond scam issue may have been forgotten and swept under the rug,” he opined.

The former CBSL Governor pointed out the Bank had been using the hybrid system of auctions plus direct placement when it issued Treasury bonds to the market since 1997, claiming that the system was changed when the Yahapalanaya Government came in to power in 2015. He charged that the quick reaction and denial of the bond scam by some officials amounted to them being designated ‘cover-up artists.’ 

Ajith Nivaard Cabraal

He questioned the motives behind bringing in complex investigative bodies in place of the matter being handed over to the Police to be investigated as a fraud. Cabraal accused the then-Prime Minister Ranil Wickremesinghe for trying to cover up the scandal and buying time for his long-term advisor and then-CBSL Governor Arjuna Mahendran to escape the Sri Lankan judicial process. He called for Wickremesinghe to be investigated and held responsible for his actions. 

The former CBSL Governor claimed that in the early stages, the then-Government appointed an unofficial three-member panel of lawyers who had no punitive powers, and gave the culprits a risk-free time period to cover up the crime even more. 

Cabraal claimed that several years were wasted with several half-hearted investigations, which were meant to distract the public and not designed to bring to book the key culprits, pointing out that the CoPE inquiry and the subsequent delays regarding footnotes was an exercise designed to waste time. 

He questioned why top CBSL officials and individuals at key Ministries were not named nor arrested regarding their involvement in the crime. 

Speaking on the forensic audits on the bond investigation, Cabraal said the Auditor General should have overseen the forensic auditing process. ”How can the CBSL oversee the audits if it is the entity under question? There is a conflict of interest here,” Cabraal stressed. 

In his book, Cabraal recommend that the Government, among others, “punish all perpetrators and accomplices of the bond scam according to the law, without limiting punishment only to the errant primary dealer company, Perpetual Treasuries (Pvt) Ltd. and its officials.” to recover ill-gotten gains earned and enjoyed by the culprits, name and shame all those involved directly and indirectly, and recognise those whistle-blowers and State officials who stood against political pressure and reported on the scam.