Harsha renews call for swift action against NSB-TFC deal makers

Thursday, 13 September 2012 02:48 - - {{hitsCtrl.values.hits}}

By Uditha Jayasinghe

The Opposition yesterday called on the Government to promote economic good governance and complete investigations into the controversial deal between National Savings Bank (NSB) and The Finance Company (TFC).

UNP MP and top economist Dr. Harsha de Silva at a press conference criticised the Government’s handling of the economy and insisted that it was being “murdered” by disregard for law and order as well as lack of transparency.

Claiming that the NSB-TFC deal was cancelled by the intervention of President Mahinda Rajapaksa in April, de Silva pointed out that despite the resignation of the NSB Chairman and other officials, no one has yet been held legally responsible for the transaction.

“Both the Central Bank and TFC at that time released statement after statement saying that this was a legitimate deal made with a financially stable company but a look at the latter’s first half accounts shows otherwise,” he said.

Quoting from TFC first half accounts report, Dr. de Silva noted that on page 46 the auditors have stated: “The company was unable to comply with regulations issued by the Central Bank under the Finance Business Act of 2011.” The oversights are failing to invest 7.5% of funds in Treasury bills or securities and inability to recover 50% from interested parties during restructuring.

“There is a whole list of instances when the TFC has failed to meet Government regulations. Moreover, TFC has recorded Rs. 393 million in losses in the first half of this year. It is in such a company that the Government chose to invest the people’s money in and buy shares at an inflated price. Such an act should not be allowed to happen again.”

Moving on to NSB results Dr. de Silva pointed out that profits had plummeted by 76 per cent mostly on stock market investments that had lost the bank a whopping Rs.1.9 billion. He questioned as to why NSB did not do due diligence on their investments and discharge their responsibility of handling public money better.

Continued disregard for good governance, transparency and the law would cause bigger mishaps in the future Dr. de Silva warned remarking on what he termed as the “disgusting” appointments to the Securities and Exchange Commission (SEC). He predicted that the market would eventually fall as investigations on the “mafia” and other good governance practices are being largely neglected.

“The Government is destroying the economy with impunity. It has failed to provide the post-war economic boom as it promised and the latest external performance data underscores this with numbers of declining exports. Rising reserves on loans is not something to brag about when we are still largely dependent on remittances to run this country.”

Dr. de Silva opined that the “cowboy” law adopted by the Government would only benefit few people in the short term but would be detrimental to the country’s future.