WHITHER RANIL WHITHER KABIR
The Attorney General is making strenuous efforts to bring some closure to the greatest financial scam inflicted on independent Sri Lanka. The events were particularly callous that it has caused losses to the economy which will cost the nation in trillions spread over the next 30 years or so. The opportunity cost of lost credibility, loss of investor confidence and the utter distrust of our politicians and senior state mandarins by world leaders and agencies will never have a figure placed upon it. Suffice to say that even USD 1 billion would be petty cash in comparison to the real impact. It is a game changing event.
This editorial commenting on this aspect bang in the middle of Covid19 may surprise some but certainly should not come as a shock.
Politicians are adept at sliding away complete with the loot and long-lasting impact which the people will need to cope with way after the legislator has handed the reins over to a member of the family, close buddies much younger in age or even to their lovers – same sex or otherwise.
The crux of the problem now known as the Bond Scam is that the entire event appears on the available evidence to have been pre-meditated. One person having tasted the fruits of the labour better known as market manipulation, front running, pumping and dumping and even the bad word “insider information” knew quite how to virtually print money if the system of awarding bonds was changed. Usually the awarding of anything by an auction process has several apparent transparent benefits. However, the spectre of market manipulation by those acting in a cabal and also as a cartel is easy to raise its head with the pure auction system.
The system that was in place previous to Mahendran going back to Governor AS Jayawardena was a mixed system almost a hybrid where there were elements of an auction but all bids and the final borrowing rate was subject to the weighted average yield rate. This meant that the Central Bank had a real say in the interest rate to be applied.
Once the plan was made in came the other very puzzling segment of the Scam: that the Finance Ministry was split into three parts. One was that the state enterprises including the state financial institutions would be removed from the Finance Ministry and placed under the Minister of Public Enterprises – the holder was Kabir Hashim an UNP stalwart if ever there was one. Also, fair to say almost intimidated by the leader.
Second up was the listing of the Central Bank under the Minister of Economic Development who was in this case Mr. Ranil Wickremesinghe.
Finally, the Finance Ministry itself was left with the Budgets, the handling of regular payments including the periodic injecting of funds to the national flying disaster Sri Lankan Airlines and of course the Customs.
The incomprehensible aspect of course was why the need to dissect the Finance portfolio. At the time there was some opinion expressed in the hushed corridors of the corporate world that the Premier and his advisor did not entirely feel comfortable giving Ravi K the Finance portfolio.
In the haste of the split – rather like when then Defence Secretary chose to accept early retirement from service of 9 senior Army officers, sensitive information was not collected from one individual. This one item would have had the most tremendous impact on Sri Lanka and its armed forces but lucky the officer in question was both an officer and a gentleman and that lapse on the part of the establishment will go down with the former senior Army man to his grave.
Similar to this lapse was the fact that whilst the Finance Minister did not have control over the Central Bank and or its Public Debt Department he also did not have any control over the state enterprises like the state-owned banks and other financial institutions where ownership was with the state. All those came under the purview of the Wickremesinghe-chosen Kabir Hashim.
It is fair to say that whilst Hashim may be considered an easy push over Ravi Karunanayake almost enjoyed the status of a rock and a hard place.
One item of law however was merely kept in the books under the Registered Stocks and Shares Ordinance. The RSSO refers to the Minister in charge of the subject of the Finance.
When Ranil Wickremesinghe sought to keep control of the Central Bank under a Ministry where he was the designated Minister, he chose either by design or omission to ignore the various statutes and laws that refer specifically to the Minister in charge of the subject of Finance.
The laws were created with the intent that the Minister in charge of the subject of Finance would also have a direct say over the operation of the Central Bank as well as the state financial institutions.
In deviating from that intent – for whatever purpose – the Prime Minister with over 40 years of expertise in parliament appears to have not got parliament to make an amendment to the various laws in force to reflect a position where the subject of Finance had been split three ways.
It appears grossly out of place that the Minister in charge of the state Banks and other state financial institutions as well as the Minister in charge of the Central Bank and its affairs, be left out of the loop of responsibility and accountability.
The gravest danger is yet to come: in the quest to hang Ravi Karunanayake and leave him as the principal government culprit, there appears a real chance that the other perpetrators will get away – slide away into freedom and oblivion with the monies they made intact.
If this is the latest ploy on the part of those really responsible for this grave violation of public trust it appears then that they will slither and slide away. Not only with the money but with their questionable integrity too well washed and laundered for future reference.