Bond scam has damaged investor confidence –

Bond scam has damaged investor confidence – State Minister Samarasinghe

Mahendran questioned by Bribery Commission

April 16, 2015, 7:29 pm 

by Shamindra Ferdinando

The failure on the part of the new administration to secure parliamentary approval to increase the Treasury Bills Debt Ceiling by Rs. 400 billion, particularly in the wake of a simmering controversy over alleged insider dealing in bond market by a firm connected to Central Bank Governor Arjuna Mahendran’s family could seriously damage the investor confidence, State Finance Minister Mahinda Samarasinghe warned yesterday.

The Commission to Investigate Allegations of Bribery or Corruption (CIABOC) yesterday recorded Mahendran’s statement as regards the sale of treasury bonds.

There has been a rising concern in bond markets over controversial deals made by Perpetual Treasuries, a firm connected to Arjun Aloysius, the son-in-law of Governor Arjuna Mahendran.

Minister Samarasinghe revealed that there had been many queries from investors as well as prospective investors with some expressing concern over the latest developments. Asserting such developments could undermine the national economy, Minister Samarasinghe said that the government could have avoided an embarrassing situation by not moving the resolution on April 7 seeking an increase to the Treasury Bill Debt Ceiling. Samarasinghe

was participating in a live political programme on Rupavahini anchored by Chaminda Gamage.

The resolution was moved by Finance Minister Ravi Karunanayake. However, he wasn’t present in parliament when the vote was taken.

Samarasinghe (UPFA Kalutara District) accepted state finance portfolio on March 25 on the invitation of President Maithripala Sirisena. Samarasinghe is among 26 SLFPers, who accepted government portfolios recently.

Responding to a query, Minister Samarasinghe emphasized that those responsible for the resolution should have abandoned the move when they realized the government didn’t have the required number of votes at the time it was taken up or an understanding with the SLFP to ensure its passage.

Minister Samarasinghe said that he voted for the resolution though being an SLFPer because he held state finance portfolio. The resolution was defeated by a majority of 21 votes, with 31 members voting in favour and 52 against.

Asked whether the government would make another bid to secure parliamentary approval for the defeated resolution, Minister Samarasinghe said that the required funds could be raised through local banks. The minister said that obtaining the required funds wasn’t the issue, though the consequences of the Central Bank affair and the defeat in parliament couldn’t be taken lightly.

Commenting on proposed constitutional and electoral reforms, Minister Samarasinghe said that even the cabinet had been divided over the 19 Amendment. There was no point in denying that fact, Minister Samarasinghe said, asserting that the government acted hastily in seeking to implement 19 Amendment. The minister dismissed the claim that those who had voted for Maithripala Sirisena expected the government to move 19th Amendment. Commending the government for not seeking to rush through the Amendment as an urgent bill, Minister Samarasinghe said that Supreme Court in no uncertain terms ruled that powers currently enjoyed by the president couldn’t be transferred to Prime Minister under any circumstances unless endorsed by people at a referendum in addition a two-thirds majority in parliament.

Minister Samarasinghe asserted that the 19 Amendment could have secured parliamentary endorsement without any issue if an attempt wasn’t made to transfer certain powers enjoyed by a president elected by people to prime minister. The UNP couldn’t expect the SLFP’s support for that move, Minister Samarasinghe, said pointing out that even those who had backed Maithripala Sirisena’s candidature were divided over the fate of the executive presidency. A section wanted to abolish executive presidency, whereas others wanted to retain the executive presidential system minus what they called dictatorial features.

Minister Samarasinghe frowned on the government having submitted a 12-page document containing amendments/suggestions to Supreme Court through the Attorney General. The AG proposed to transfer certain powers currently enjoyed by the president to the prime minister.

The minister emphasized that the proposal to have the premier chair cabinet meetings when issues not pertaining to defence, environment and mahaweli held by President Maithripala Sirisena were taken up wasn’t acceptable to the SLFP.

Responding to another query, the former UNP stalwart Samarasinghe said that his loyalties remained with the SLFP, though he accepted a cabinet portfolio. The minister said that he wouldn’t switch his allegiance to the UNP, though he worked closely with its leader and Premier Wickremesinghe.

Minister Samarasinghe appreciated Wickremesinghe having him as the Chief Government Whip during UNP led UNF government as well as naming him the Chief Opposition Whip subsequent to UNP’s defeat at April 2004 parliamentary election.

Minister Samarasinghe also acknowledged the difficulties experienced by the SLFP group in the government.