Out of hiding from bond scam villainy

By SONALI WIJERATNE

Former Central Bank Governor, Arjuna Mahendran, has responded to your editorial on “Cops & Robbers”, by saying that he obtained prior approval to leave the country from the Chairman of the Commission, Justice Chitrasiri. (The Island of 25/8/22). He, therefore, denies having “fled the country”. Your editor’s Note however, hits the nail on the head in the rebuttal – “Doesn’t the act of leaving the country, before legal action is instituted against you, and staying overseas, without returning to stand trial, amount to fleeing?”

It is an irrefutable fact that in October 2016, the Committee on Public Enterprises, after a lengthy investigation, found Arjuna Mahendran responsible for the Bond Issue Scam, and recommended legal action be taken against him, and other respondents. Subsequently, the son–in–law of Arjuna Mahendran, Arjun Alosius, and Kasun Palisena, of Perpetual Treasuries Limited, who were affiliated with the scam, were detained at the Colombo Remand Prison, for approximately 10 months, and were released in 2019. On 15 March 2018, the Colombo Fort Magistrate’s Court had issued an arrest warrant on Arjuna Mahendran, on charges of criminal breach of trust, for allegedly providing confidential information of the Central Bank to Perpetual Treasuries Limited.

Moreover, we, the public, are very much aware, from media reports, that until the advent of the present government, led by President Ranil Wickremesinghe, Arjuna Mahendran was maintaining a low profile, incommunicado, with no known address in Singapore; and there were frenzied efforts to find out his whereabouts, and also efforts made by the Attorney General’s Department, to have him extradited, to be “hauled up before courts, over the Treasury Bond Scam”. This spurious response of Mahendran also now indicates his address as “No: 20 Cuscaden Road, Singapore” to the public domain.

Therefore, it seems that Mahendran, who was supposedly in hiding, in Singapore, is now flexing his muscles, and come out into the open to split hairs and engage in semantics. We do not know whether, in some peculiar manner, the charges against him, or the need to seek explanation from him regarding the bond scam, have now been distilled into thin air! The legitimate expectation of the public, in any democracy which espouses One Law, One People, is that summons will be issued for him to stand trial on the basis of submissions received at the Presidential Commission of Inquiry, and other investigations concluded by the Committee on Public Enterprises, and that the Department of Attorney General will take necessary action, in this regard.

The recent revelations on other matters, of blatant corruption, coming out of the various Committees on Public Enterprises, and Committees on Public Accounts, show no actual prosecutions, or investigations, leading on to affirmative action against corruption. It is no wonder then that the IMF Mission, in June 2022, have emphasised the need for tackling corruption, which concern is listed right below the important and contingent issues on rising levels of inflation and severe balance of payment pressures on the country.

The moot question is whether any government will genuinely tackle corruption to the advantage of the citizen’s interest? Will they merely continue to be using the apparatus of Commissions and Committees, FCID/CID, that will only play act, and dupe the people into thinking that the government is cracking the whip against corruption, when they are actually perpetuating corruption, since they are participants with vested business and political interests.

It is over seven years since the infamous bond auction and scam under reference. But it is important for the Public to recapitulate the facts of the case, and understand the tentacles of Corruption that holds the Nation in its thrall.

The Public should not forget that in 2015, the Central Bank of Sri Lanka, under the Governorship of Arjuna Mahendran, advertised a Bond for Rs.1 Bn. for 30 years. It is widely documented that initially Mahendran had decided to increase the value of the Bond to Rs. 20 Bn. Since he had met with some resistance, to this proposal, from the officials of the Central Bank, it was reduced to Rs.10 Bn. The former Prime Minister of the Yahapalanaya government, Ranil Wickremesinghe, who had in fact been responsible for fielding Arjuna Mahendran to the position of Governor of the Central Bank, responded with a statement on the matter in reply to mounting public unrest and media probes as at March 2015. In characteristic fashion, he appointed a committee of his own, the Pitipana Committee, to probe into the bond scam.

Despite the concerns, issues and suspicions raised, predictably enough, the Pitipana Committee reported that the former governor, Arjun Mahendran, was innocent.

It is significant, and more than coincidental, that Parliament was dissolved on June 26th 2015, on the day the DEW Gunasekera Committee on Public Enterprise (COPE) – that examined the alleged corruption in detail – report was to be tabled in Parliament. This was considered fortunate for the perpetrators of the bond scam, since it was later exposed that one of the key features of the COPE report was that Arjuna Mahendran, under oath, stated that he had “only followed the Prime Minister’s instructions.”

The saga continued three months, following the parliamentary elections, when Sunil Handunetti was appointed as the Chairman of COPE. In October 2016, the UNP members of COPE signed off the report, which basically found Arjuna Mahendran culpable in the bond scam, but added footnotes challenging some of the conclusions of the COPE report.

Consequently, on 27 January 2017, President Sirisena appointed a Presidential Commission of Inquiry to look into the issuance of bonds, and the Commission took 11 months to compile a report and hand it over to the President, which was later submitted to the Attorney General.The Commission of Inquiry recommended that legal action be instituted against those accountable for the scam. The need for Mahendran to be produced before Courts ever since, while he was allegedly at large in Singapore, surfaced thereafter.

It is immaterial whether we compare regimes and talk about the pre-Yahapalanaya Bond and other Scams, and subsequent Yahapalana sequel with Mahendran’s reported involvement in insider trading with Perpetual Treasuries, where his son-in-law, Arjuna Aloysius, reigned. The fact of the matter, from actual experience and the seven-year saga outlined above, is that Sri Lanka is likely to remain a bankrupted, paralytic indebted, economically mismanaged country, with an extremely high cycle of corruption and nepotism, whatever government comes into place.

Engaging in constitutional democracy and routinely having to replace one political party with another, at the elections, is not going to end this sad, skewed, and sordid legacy of corruption. It is the same pack of rogues that shuffle the cards. They are the game makers and Dealers. Not one major scam has been investigated and its culprits punished to date. We have seen the truth of this over the decades. Nothing short of a Revolution, People’s Council that demands a radical Systems Change, will ever make the difference, or change for the better. The concerted attempts we see today to exterminate the Aragalaya, shows that the politicians realise the game is up. At least some of the people have seen what it must take to reach the light at the end of a long tunnel of subterfuge, manipulation, state hypocrisy and corruption.