Accountability beyond incompetence, moving beyond the Cabraal case

The recent decision of the High Court to exonerate former Central Bank Governor Ajith Nivard Cabraal in the Greek Government Bond case has again highlighted the difficulty in holding those responsible for economic crimes to account and the thin lines between corruption and ‘executive decisions.’

Last week’s ruling rested on a narrow legal interpretation. The Court was of the view that the investment in Greek Bonds, made when Greece itself was on the brink of economic collapse, constituted an Executive decision that could not be conclusively proven as corruption. Legally, that may be so. Morally and economically, however, the decision represents a profound failure to address the deeper rot that has plagued Sri Lanka’s public financial management for years.

When in 2011 Cabraal and three other senior Central Bank officials committed to these investments, warning signs were already flashing red. Greece’s debt crisis was no secret. Any prudent monetary authority would have exercised extreme caution. Yet Sri Lanka’s Central Bank proceeded otherwise, exposing public funds to unnecessary and foreseeable risk. These decisions, taken by individuals entrusted with safeguarding national economic stability, contributed to a chain of policy failures that eventually dragged the country into the economic abyss witnessed in 2022.

That said, incompetence, however disastrous, is not a criminal offence. Many of the officials appointed during that era, including Cabraal, lacked the depth of experience expected of a central banker. His background was primarily as a Chartered Accountant, not as a monetary policymaker. Poor judgment, technical inadequacy, and even breath-taking stupidity do not automatically amount to corruption in the eyes of the law. This distinction matters, and it must be acknowledged.

But stopping the conversation there, would be a grave injustice to the public.

Sri Lanka’s economic collapse was not caused by incompetence alone. Corruption, conflicts of interest, and abuse of authority played a significant role. This is where the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) must step in decisively. The mandate of such institutions is not to relegate bad policy choices, but to investigate whether crimes were committed alongside them.

Several actions during Cabraal’s tenure demand serious scrutiny. Even as Sri Lanka stood on the brink of bankruptcy in early 2022, the decision to pay $ 500 million on an International Sovereign Bond raised troubling questions about priorities, beneficiaries, and motivations, especially at a time when the country’s foreign currency reserves were barely enough to import essential items. Similarly, reports of payments made through the Central Bank to a lobbying firm in the United Kingdom cannot simply be brushed aside as routine administrative decisions. These are not matters of incompetence, they were  potential indicators of misconduct that warrant transparent investigation.

Ordinary Sri Lankans bore the cost of economic collapse through inflation, shortages, job losses, and the erosion of savings, while those who presided over the disaster continue to walk free, often protected by technicalities and institutional inertia.

If figures like Cabraal emerge unscathed, without even thorough investigation into questionable dealings, it sends a clear and damaging message that there is no real accountability for those who mismanage or misuse public power at the highest levels. However, the Court decision to discharge Cabraal was subject to him transferring Rs. 1.8 billion to the CBSL’s account within three months.

Sri Lanka does not need vengeance, but it does need justice. Courts may absolve individuals of specific charges, but the responsibility of investigative bodies does not end there. To rebuild confidence in governance and prevent future collapses, the country must demonstrate that economic crimes, real crimes, not just bad decisions, will be pursued relentlessly, regardless of rank or past influence.