Columns

A grief stricken Sri Lankan citizenry caught up in the immediate aftermath of a deadly cyclone that cracked the country’s green and verdant hills with potentially irreversible impact, cruelly swallowing up entire villages and their sleeping inhabitants like some giant medieval monster, was rocked by a cyclonic storm of legal consequences this week.

‘Acquittals’ versus ‘withdrawals’

That when the national media headlined the story of the ‘acquittal’ of a former Governor of the Central Bank (CBSL) indicted by the Commission to Investigate Allegations of Bribery and Corruption (CIABOC) for a 2011/2012 decision by the CBSL to invest in Greece’s sovereign bonds under the Rajapaksa Presidency. This had (allegedly) caused a staggering loss of approximately Rs 1.8 billion to the State as the Eurozone crisis worsened.

Casting himself as an unconvincingly tragic lead actor in a badly scripted tele-drama, the former Governor loftily claimed that he had been found ‘innocent’ of all ‘false’ charges. Despite the CIABOC’s clarification that the ‘acquittal’ was a ‘conditional withdrawal’ a dispiriting legal tangle overshadows the case. Previously, this controversy has had more than its fair share of legal and political colour.

In 2014, the Supreme Court refused to grant leave to proceed in a fundamental rights petition filed in 2014 on the same basis by a (then) opposition parliamentarian against the Monetary Board. The investment, on the face of an inevitable spiralling of Greece’s acute financial woes, was observed to be part of complex economic policy making which could not be struck down merely because another policy decision might have been ‘wiser’ in retrospect.

‘Political capture’ of the Central Bank

Interestingly, the former opposition parliamentarian who moved the courts in the Rajapaksa ‘Greek Bond’ case was himself ruthlessly pilloried for whitewashing the succeeding Sirisena-Wickremesinghe led Government’s Central Bank ‘treasury bond scam’ (2015-2019) as part of that regime. It appears that posturing by our parliamentarians on the sanctity of the public purse is selective, to say the least.

Whether involving ‘complex economic policy making’ or not, these cases symbolised the ‘political capture’ of the country’s apex financial institution. That was reflected by the thoroughly unwise handling of fiscal and economic policy by public officials who danced like sycophantic marionettes at the whim and command of ruling politicians which finally led to Sri Lanka declaring bankruptcy in 2022.

A decade following the Supreme Court’s dismissal of the fundamental rights challenge, the CIABOC decided to re-file indictment against the former Governor et al under the Anti-Corruption Act (ATA). This was after a previous filing was dismissed on a technicality in 2024. That re-filing is what led to the tragi-comedy of the former Governor’s claim this week that he had been ‘acquitted’ leading some to scratch their heads in bewilderment.

The dangers of ‘buyable justice’

Others reacted with more than a dash of sceptical salt. Meanwhile, the CIABOC rushed post haste to clarify that the indictment had been withdrawn only ‘conditionally’ under Section 67(3) of the ATA. This requires the former Governor to pay the incurred loss in full back to the State within three months of the withdrawal. In default thereof, Section 67 (5) of the ATA will allow the filing of a fresh indictment.

But lawyers for the former Governor declared that the accused was unconditionally ‘discharged’ by the Colombo High Court, that there was no intention or knowledge to cause an unlawful loss to the State and no agreement to pay back. This unedifying muddle will, no doubt, continue in the following months. ‘Conditional withdrawals’ of indictments by the Director General must be with the sanction of the Commission and the ‘permission’ of the High Court.

In the instant case, was this ‘permission’ recorded? That question can be answered only after examining the relevant court records. Indeed, the controversy bears out the dangers of this ‘escape clause’ offered by Section 67 in respect of high financial crimes. That brings us to the larger question of allowing ‘buyable justice’ as such clauses are commonly critiqued.

A conceptual struggle to justify Section 67

The argument in allowing the accused to pay the State for the loss incurred rather than to undergo a jail term is seductively crafted. We are told that this option allows the State to recover the full total of the money lost which does not happen when the accused receives a penal punishment or when a meagre fine is imposed. But the law in theory and in practice are two very different creatures.

This newspaper has editorially pointed to the dangers of a ‘Pay and Commute’ solution in such cases, (‘Corruption: Pay and Go’, the Sunday Times, October 26th 2025). That was likened to spot-fines imposed on errant motorists or when public servants pay back funds that were overspent. There are major differences between ‘minor’ infractions and high financial crimes or so-called white collar offences.

As was pointed out, corruption crimes cannot be reduced to a simple matter of rupees and cents, however enormous that amount may be. Conceptually, it is difficult to justify this in terms of the criminal law as well as public law.  The edifice of the criminal law, of which bribery and corruption laws form an essential part, is built on the fundamental concept of deterrence.

Grave consequences of withdrawing indictments

That is intertwined with the aims of public protection and the maintenance of social order. Allowing high profile victims to ‘buy’ their way out of jail time is morally repugnant however one looks at it. Simply put, this would result in accused with ‘deep pockets’ being enabled to escape the reach of the law. That has constitutional ramifications as well in regard to the equality of the law.

Examples abound in public perception. In May 2025, a grama niladhari officer in Jaffna was arrested by CIABOC officials for accepting a 128 GB pendrive (Rs 4,000/-) to sign a request for the cutting down of three coconut trees. Would this individual be permitted to pay back the meagre amount of Rs 4,000/- to the ‘victim’ as envisaged? And even when Section 67 is ‘properly’ availed of, a graver result must surely stamp high financial offences?

The Section allows certain conditions to be imposed when the Director General decides to withdraw an indictment on ‘the national interest and the public interest.’ That ‘may’ be subjected to certain conditions, including ‘providing reparations to victims of the offence’ [Section 67(3) (ii)], ‘publicly expressing remorse and apology’ or directing the accused to ‘permanently refrain from holding public office, both elected and appointed’ [Section 67(3) (iv)].

Responsibility of sticking to its prosecutorial duty

In the draft stage, Clause 67 was criticised as allowing selective discretion to be exercised by the Director General of CIABOC, not the Court. In fact, the controversy over the ‘Greek Bond’ case demonstrates that the outcome would have been quite different if accompanied by one or the other condition under Section 67. In particular, expressing public remorse comes to mind.

Alternately the harsher step of withdrawing the indictment was an option. A measure of gravitas would have been superimposed on the exercise as a result. If however, lawyers for the accused had refused to oblige, the CIABOC had the responsibility to stick to its prosecutorial duty, come what may. Withdrawing an indictment in contentious circumstances and then citing its potential re-filing as a fall back strategy is far from felicitous.

Regardless of the outcome in this particular case, we may expect those to whom ‘leniency’ is meted out by CIABOC under the ATA, feted as the ‘best’ anti-corruption law in Asia, to enjoy muddying the legal waters. A specific legal protocol in respect of withdrawal of indictments in that regard must be laid down and strictly observed.

Otherwise, the chequered story of ‘tackling’ Sri Lanka’s endemic bribery and corruption culture is destined for a sorry ending.