Anti-graft activists go to court against under-fire CB Chief

• Anti-Corruption Front seeks writ quo warranto against Mahendran
• Asks Appeals Court to disqualify him from holding office as Governor CBSL
• Petition points to ‘serious allegations of corruption’ against Mahendran
• Highlights Governor’s Singaporean citizenship and connection to Credit Suisse Group as disqualifications to hold office

By Dharisha Bastians

Continuing a strong pushback against controversial Central Bank Governor Arjuna Mahendran, anti-corruption activists went to Court yesterday, seeking a legal order that will disqualify the Singaporean citizen from leading the country’s banking regulator.  

The Anti-Corruption Front (ACF) filed a writ quo warranto, in the Court of Appeal last afternoon, to prevent Mahendran from continuing in office as Central Bank Governor. The writ application was filed by ACF Advisor Rajith Keerthi Tennakoon, highlighting ‘serious allegations of corruption’ against the Central Bank Governor, with special reference to the Treasury bond fiasco of February 2015.

The legal action was filed as reports surfaced that Prime Minister Ranil Wickremesinghe, who is Mahendran’s strongest backer in the coalition Government, had agreed to withhold the reappointment until the Committee on Public Enterprises (COPE), a Parliamentary oversight committee, completes its investigation into the Treasury bond controversy.

Tennakoon’s action is filed against Arjuna Lakshman Mahendran, the Governor of the Central Bank of Sri Lanka, under Article 140 of the Constitution, seeking a writ quo warranto that challenges Mahendran’s right to hold office.

In its petition, ACF claims it is litigating in the public interest, and argues that Arjuna Mahendran holding office as Governor of the Central Bank is ultra vires the Monetary Law Act No 37 of 1974.

The petition sets out three serious allegations against Mahendran that Tennakoon says should disqualify him from holding office as Governor.

The Petition states that since Mahendran is a Singaporean citizen, and Singapore does not permit its citizens to hold citizenship in any other country, the incumbent Governor is incapable of pledging allegiance to the Constitution of Sri Lanka, as required by all officials holding public office. The petition states that Mahendran is therefore ‘disqualified by law’ from holding office as Governor of Central Bank.

Secondly, the petition states that according to a profile of Governor Mahendran published in the Business Week Bloomberg, he is affiliated to Credit Suisse Group AG, a global financial institution from which the Government of Sri Lanka has decided to borrow money.

“Under Section 11 (c) of the Monetary Law act, any person who is director, officer, employee or shareholder of any banking institution other than the Central Bank of Sri Lanka is disqualified from holding office as Governor of the Central Bank,” Tennakoon’s petition states.

Arjuna Mahendran is disqualified from being Governor of Central Bank by virtue of his involvement with the Credit Suisse Group, the petition states.

The third and lengthy charge against Mahendran in the writ application is what the petitioner calls ‘serious allegations of corruption’ with regard to the 27 February 2015 Treasury bond auction, in which Perpetual Treasuries, a primary dealer connected to the Governor’s son-in-law won bids for 50% of the value of the bonds offered by the Central Bank. The petitioner points to Perpetual Trading having prior knowledge into ‘impending monetary policy changes’ – aserious insider trading charge.

Tennakoon has asked the Court to issue a writ quo warranto, disqualifying or not entitling Mahendran to continue to hold office as Governor of the Central Bank.

Counsel for the petitioner were listed as Dharshika Perera and Samudra Gunewardane of Niclo Associates.

Anti-corruption activists, civil society groups and more recently the SLFP, a coalition partner in the UNF led alliance, have come out strongly against the reappointment of Governor Mahendran when his 18-month tenure ends on 30 June.

Activists says PM to defer Mahendran re-appointment pending probe

After weeks of campaigning against the Central Bank Governor, good governance activists and civil society representatives are celebrating a decision by Prime Minister Ranil Wickremesinghe to stay his reappointment until a Parliamentary oversight committee completes its investigation into the Treasury bond fiasco.

Civil society movement Purawesi Balaya, the trade union movement for social justice (TUMSJ) and academicswho strongly backed the candidacy of President Maithripala Sirisena in January 2015said the Prime Minister had agreed to this compromise at a meeting held at Temple Trees on Saturday (18) night.

Speaking to the Daily FT, TUMSJ Convenor Saman Ratnapriya said Saturday’s exchange had been the third meeting this month at which civil society activists had tried to convince the President and the Prime Minister that Mahendran’s reappointment would be deeply damaging to a Government that was swept to office on a platform of good governance. 

Saturday’s meeting lasted 2.5 hours and happened soon after a meeting between President Sirisena, Wickremesinghe and 19 civil society activists on Friday (17).

“We told the Prime Minister that there was a loss of public faith in the Governor and charges against him. In fairness to both sides, we urged him not to reappoint Arjuna Mahendran until COPE finished its probe,” Ratnapriya said.

Ratnapriya said that the discussions with the Premier had been long-winded, but he had finally given into their appeals.

Purawesi Balaya Convenor Gamini Viyangoda, Ravaya Editor K.W. Janaranjan, Prof. Sarath Wijesuriya, trade unionist Joseph Stalin and Private Bus Owners Association Chairman Gemunu Wijesinghe were also present at the meeting.

Ratnapriya said during their discussions with the Premier, they had also talked about the need for a special corruption court to expedite the prosecutions on corruption that were subject to major delays at present.