CA overturns RTI order on EPF Bond transaction disclosures

The Court of Appeal (CA) has set aside a Right to Information (RTI) Commission order directing the Central Bank of Sri Lanka (CBSL) to disclose detailed Employees’ Provident Fund (EPF) Government securities transaction data, ruling that disclosure of the information would harm the Fund’s competitive position and falls within an exemption under the RTI Act. 

In a judgement delivered on 26 March, the Court allowed an appeal by the CBSL and overturned a 27 November 2018 RTI Commission order that had directed disclosure of certain EPF Government securities transaction details sought by Verité Research under the 

RTI Act. 

The case arose from RTI applications submitted by Verité Research in 2017 seeking information relating to the management and investment activities of the EPF, including details of Government securities transactions undertaken by the Fund between January 2015 and 30 April 2017. 

The requested information included dates of purchase, issue dates, International Securities Identification Numbers (ISINs), coupon rates, yields to maturity, face values, purchase costs, prices, and counterparties relating to primary and secondary market transactions in Government securities. 

The Court noted that the EPF, which manages assets exceeding Rs. 3 trillion and serves approximately 2.8 million active members, is a major participant in the Government securities market, accounting for around 50% of the Treasury Bond market. 

The RTI Commission had previously directed the disclosure of transaction details relating to purchase dates, issue dates, ISIN numbers, coupon rates, yields to maturity, face values, and purchase costs relating to the relevant period. 

However, the Court accepted the CBSL’s argument that disclosure of such information could reveal the EPF’s investment strategies and bidding patterns in the Government securities market, potentially placing the Fund at a competitive disadvantage. 

The judgement stated that information relating to the EPF’s participation in Treasury Bond auctions could reveal preferred investment tenors, allocation patterns, and bidding behaviour, enabling other market participants to infer future investment strategies and potentially outbid the Fund in subsequent auctions. The Court noted that this could adversely affect returns earned by the EPF on behalf of its members. 

Accordingly, the Court held that disclosure of the requested information would harm the EPF’s competitive position and therefore falls within the exemption provided under Section 5(1)(d) of the RTI Act relating to commercially sensitive information. 

Rejecting the RTI Commission’s findings, the Court said the CBSL had provided sufficient reasons to justify its refusal to disclose the information and that the Commission had erred in determining that the public interest in disclosure outweighed the potential harm arising from its release. 

The Court also observed that the EPF Act already provides mechanisms for transparency through annual investment statements disclosing the face value, purchase price, and market value of investments, together with oversight by the Auditor General and Parliament. 

The judgement further held that the RTI Commission had exceeded the scope of its powers by directing disclosure of information protected under statutory exemptions contained in the RTI Act. Accordingly, the Court set aside the Commission’s order and allowed the appeal.