Columns

• Sorry to bring bad news, but a financially inauspicious Sinhala and Hindu New Year looks likely to dawn on nation
  

As the old devil’s year-long reign dragged toward its inevitable end, it seemed hellbent not on walking into the sunset with a stylish wave of resigned grace, but on leaving Lanka with a shocker to be impaled on throughout her traditional new year set to dawn on Tuesday: the rising scandal at National Development Bank’s 13 billion-rupee fraud, which may well cause the government’s downfall.

Thirteen billion local bucks are not peanuts, not even in American dollars and dimes. It cannot be palmed off as one of those things that can happen even in the best of families and shoved under the family’s heirloom carpet because this has gone beyond the province of an entirely family matter. The National Development Bank is 51 per cent government-owned, with the remaining 49 in private hands. And this 49 per cent – be they local or foreign investors – needs answers. Strongly convincing ones.

Cheap and cliched excuses the government dishes out to the masses to explain away why coconut and rice prices are sky-high will not do to sate the palate of ruthless international predators with a blood lust to make killings in stock market jungles worldwide.

Nor is it acceptable anymore to blame ‘IT issues or glitches’ to explain away fraud, especially when sophisticated protective systems serve as the vigilant, real-time guardian deities of banking around the world today.

But the worst of all excuses that taxed the sheer credulity of investors to the utmost was the one put forward by no less than NDB’s Chief Executive Officer and Director Kelum Edirisinghe.

As the Daily Mirror reported on Tuesday, Edirisinghe told selected journalists and editors at a media roundtable confab, ‘With the benefit of hindsight, there should have been more probing questions.’

With the benefit of hindsight?

CEO EDIRSINGHE: Expert at forecasting, with the benefit of hindsight’

At whose glorified and highly paid desk did ultimate responsibility lie to ask those probing questions? Was it not at yours, Mr CEO Kelum? Repeat. Wasn’t it at yours?

As the Daily Mirror also reported on Tuesday, at bank level, the management had framed the episode – in a highfalutin salad of nonsensical words – as a ‘failure of oversight’ rather than an ‘absence of controls’, which had made CEO Kelum Edirisinghe acknowledge – with the benefit of hindsight, of course – that there were ‘gaps in scrutiny’.

Didn’t it strike Edirisinghe that as the CEO of a primary financial institution, it was part and parcel of his exalted designation to ensure, at least, that a critical examination must be kept at all times over the entire security process, and the holes must be immediately closed on finding them – not left to remain glaringly open for two long years, which must seem epochs in today’s high-speed world of cybercrime – under his stewardship?

He adds, to the chagrin of his NDB shareholders, that it would be a ‘key learner’.

Can the National Development Bank afford to fund multi-billion-buck mistakes? Edirisinghe made as its Chief Executive Officer to simply provide him a new learning trajectory to avoid making them again?

One can learn to one’s grave, but do those who have invested their capital in publicly quoted blue-chip companies or banks prefer the CEOs of such institutions to possess a fascinating obsession with endless academic pursuits or CEOs with bald eagle eyes to keep keen watch on their capital investments?

Is his extraordinary confession ‘With the benefit of hindsight, there should have been more probing questions’ – as if vomited out in an attack of catharsis whilst laying on a psychiatric couch to a personal therapist – curiously confined to a select circle of select journalists and editors – or confidants – the sort of professional stuff NDB’s shareholders expect to get as explanations or assurances from the CEO of the bank?

Especially when it follows the discovery of a 13 billion buck fraud which has been going on for the last two years and has led to the freezing of their accounts.

The NDB stated, ‘It has since moved to ring-fence the issue operationally, suspending the implicated employees, revoking system access, segregating the affected unit under new oversight and tightening access controls across the organisation.’ The jargon used amounts to saying, in normal words, the stable doors are safely secured, though the horse has bolted.

On top of that, the bank has the gumption to state that it has an ‘asset base of nearly Rs 990 billion’.

IMPOSING EDIFICE OF THE NATIONAL DEVELOPMENT BANK: Pathetic victim of an internal cyber attack

If that’s indeed the case – and not even this week’s disclosure of a 13 billion rupee bank fraud would leave room to doubt otherwise – shouldn’t the chairman and board of directors, of which the CEO is also one, have exercised greater due diligence and exerted more responsibility than leaving such vast wealth in their trustworthy care, open to temptation and pilferage on an unimaginable scale?

As a direct result of the in-house NDB fraud, those who strutted banking forums with the swerve and swagger as Titans of investment and Pundits on the ‘Art of the Deal’ have been exposed as hollow midgets of straw, as those who hadn’t fathomed the fundamental law of investment banking: how to protect investments entrusted to their professional care first, before embarking on anything else. Everything else can come later.

They have failed to realise the gravity of what has transpired: should a ‘failure of oversight’ lead to a loss of investor confidence in this country, Lanka would be damned for good. So would the government.

The massive fraud obviously demands a blood sacrifice to be made. The chosen goat for the slaughter has still not been publicly named, but one will certainly be found in the forthcoming weeks or months. Whether the chosen one for slaughter deserved its fate or not can only be told with the benefit of hindsight and not before.

Soon, after the Aluth Avurudhu celebrations are done with, the political witch hunt will begin to find the elusive mastermind behind the NDB fraud. Whether such a monster exists or not will become the subject of debate and conjecture.

Who knows, it may well end up as the mystery to make the people stay transfixed to its unfolding narrative and script. Soon on the cards to make the people stay transfixed will be the mystery of the coal fraud.

These two mysteries have the potential to join the legendary ranks of the mystery of the missing 323 containers from Colombo Port without a trace that kept the nation transfixed throughout last year and keeps it transfixed even this year as well.

And, for those who prefer some regional flavour to add hot spice to their mysteries, how about the mystery of the seven MOUs that Modi and Anura Kumara signed on April 5th last year?

Their contents still remain undisclosed and thus unknown to Sri Lankan eyes. The mystery is, why?

In the lengthening shadows of the departing old year, the President goes to Parliament and admits for the first time that the imported stock of coal – which had been at the centre of a controversial coal fraud – has proved to be of an inferior stock, which has affected power generation in Norochcholai.

He told Parliament on Tuesday, though the imported stock had been of inferior quality ‘there has been no issue about the procurement process that awarded the coal supply contract.’

His visit to Parliament to admit that the imported coal was, indeed, of a poorer quality – despite an ‘impeccable’ procurement process – came exactly 11 days after Energy Minister Kumar Jayakody was indicted in court by the Bribery Commission under section 70 of the Bribery Act for corruption.

As reported in the Daily FT, according to the indictment, Jayakody is alleged to have caused a loss of over Rs 8.8 million to the government in 2016 while serving at Lanka Fertiliser Company by granting an undue advantage to a private company during a procurement process. Jayakody was granted bail by the Colombo High Court judge that day.

Though every man against whom even an allegation of crime is hurled is presumed innocent until proven guilty in a competent court of legal jurisdiction – and Energy Minister Jayakody is certainly entitled to enjoy that right by all means – the indictment nevertheless casts a personal blow to the President’s pre-poll boast that not even a single member of the JVP has any allegation of corruption and is as free of crime as the Vestal Virgins are pure of sin.

Perhaps it explains why the President hurried on the oft-beaten track to Diyawanna to clear the air of any misconception and drain its waters of any foul opposition effluence.

What labours of Hercules must the President perform to keep the ship of state afloat? What burdens of state must hang heavy on the presidential head?

However – as bad luck would have it – not even forty-eight hours had been allowed to pass when the Auditor General’s Report to Parliament on the coal fraud revealed a major hiccup in the procurement process as well.

On Thursday, Parliament was told by the Auditor General’s report that not only had the contract with Trident Champhr been signed without the Attorney General’s approval but – worse still – Trident Champhr had not even been registered at the time it entered into an agreement with the Sri Lankan government.

Is there no sign of any merciful release, no mystical avenue of escape from the 76-year curse that seems to stalk every step and dog every act this government has taken during these last 16 months of unsuccessful tenure of office with another 44 months left on the lease to run?

Soon the Sun God – the reigning Lord of the heavenly skies – is set to leave the constellation of Pisces and enter the constellation of Aries, where he becomes exalted. It is during this period of transmigration from Pisces to Aries that the New Year dawns for Lanka.

But whatever the Heavens may portend for the rest of the Eastern block, no beneficial sign on the ground – as any mortal eye can clearly see – portends any good for the Lankan government. It has survived so far on the magnanimous nature of the Lankan people to grant allowances for its follies, to provide excuses for its sheer amateurism or even to forgive it dashing the icons of their household gods.

But the question that has arisen is, has the tolerance worn thin, gone threadbare, or burst through the seams with anger and with hellish despair?

The question on the public lips is simply this: Is the lie that has been given a varnish coating of sovereign gloss in danger of losing its glitter?

The SUNDAY PUNCH wishes its readers a healthy, prosperous and happy Sinhala and Hindu New Year. Have a riot of good ole fun.