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Rajapaksa-era shenanigans of the Central Bank come under the (micros)COPE
View(s):The Parliamentary Committee on Public Enterprises (COPE) is to summon former Governor of the Central Bank (CB), Ajith Nivard Cabraal and its former Monetary Board, to answer how the CB engaged in several questionable transactions that do not come under its purview.
The decision to summon Mr Cabraal and its former Monetary Board was consequent to COPE’s probe into CB’s audit and annual reports on Thursday. At least 70 CB officials including its Governor Arjun Mahendran, its Monterey Board as well as directors appeared before COPE. However, most transactions queried by the Committee this week involved those undertaken during the former regime, COPE Chairman MP Sunil Handunnetti said.
Some of the matters under probe involve the CB’s purchase of property in Brazil for Rs 122.81 million in 2014, for what it called its “future operations.” However, the CB had not obtained prior Cabinet approval to purchase this property, and the future plan for its utilisation had not been decided up to the end of last year. Subsequently, this property had been rented out to the Foreign Affairs Ministry for a period of two years from February 1, 2015, with the Sri Lanka Embassy in Brazil housed in this premises since that date.
A report by the Auditor General presented to Parliament last year also revealed that the CB had also acquired a building in New York for US$ 6,207,116 (Rs 607,121,953) on August 24, 2011, and rented it out to the Foreign Affairs Ministry for three years from June 1, 2012, at a monthly rental of US$ 68,000, without being utilised for the intended purposes. This too is being probed by COPE.
Another such transaction that is being looked into his how the CB paid Rs 1,396.22 million in 2014, on behalf of the Government, to three Foreign Service providers for consultancy services, on a reimbursable basis from the Treasury. The said amount had been treated as CB expenditure in 2014, without claiming it from the General Treasury. Further, it represented 68% of the total consultancy advisory professional service expenses amounting to Rs 2,050.62 million incurred during the year under review.
Mr. Handunnetti said that several such transactions which were not within the purview of the CB had been done during the previous regime and hence, the former Governor and Monetary Board members will have to explain how these were undertaken.
He said more detailed documentation of these transactions was also called for by the COPE members.
The Auditor General in his report noted that, according to Section 117 of the Monetary Law Act, “The CBSL should not engage in trade or otherwise have a direct interest in any commercial, industrial or other undertaking, except such interest as it may in any way acquire in the course of the satisfaction of any of its claims”.
Meanwhile, Mr. Handunnetti said the probe into the controversial Bond issue too would be undertaken shortly, but prior to that, several other State institutions where serious financial irregularities had taken place too, have to be probed.
“We already have a draft report on the Bond issue, as well as all the evidence collected. Hence, we can take those into account and proceed from there,” he said.