Bond issue: Only fact-f role for Commission of

Serious misconceptions within Government circles, COI can’t impose any punishment PM proposes state with drought, but s

The warrant signed by President Maithripala Sirisena last week for a Commission of Inquiry to probe the Central Bank bond scam of 2015 and 2016 will essentially be a “fact finding” one, according to its ten-point terms of reference.

It has not been mandated to probe any contraventions of the law, but only “irregularities” and “procedures.”

Gazetted on January 27, the Commission’s main objective will be to “investigate and inquire into the management, administration and conduct of affairs of the Central Bank of Sri Lanka (CBSL).” This is in respect of the issue of Treasury Bonds during the period from February 1, 2015 to March 31, 2016 and related issues. That includes a provision on “whether there has been misuse or abuse of power, influence, interference, fraud, malpractices, nepotism or any act of omission connected with corrupt activity.”

The warrant lays down; “that the provisions of Section 14 of the aforesaid Commission of Inquiry Act shall apply to the Commission.” This provision means, “no person shall, in respect of any evidence, written or oral, given by that person to or before the commission at the inquiry, be liable to any action, prosecution or other proceedings in any civil or criminal court.” The provision also adds that; “no evidence of any statement made or given by any person to or before the commission for the purposes of the commission shall be admissible against that person in any action, prosecution, or other proceedings in any civil or criminal court.”

In layman’s terms, these provisions make clear that persons testifying before the Commission of Inquiry enjoy immunity and cannot be prosecuted in courts. That is even in the unlikely event of any person admitting to any wrong doing before the Commission. Thus, it would necessitate another inquiry where investigators would have to independently elicit what transpired before the Commission. Such a process would have to be totally unmindful of what transpired before the Commission. The Presidential warrant empowers this Commission to; “hold all such inquiries and make all other investigations”. It requires the Commission to transmit to the President a report “setting out the findings” and “recommendations relating thereto.”

Yet, there are other salient features. The Evidence Ordinance does not apply to this Commission. This means evidence not admissible in an ordinary Court of Law, like hearsay for example, would be allowed. Even the production of documents could be made directly instead of summoning the relevant authority to do so. Section 8 of the Commissions of Inquiry Act provides for the Commission to request the President to confer on them powers to call for a statement of bank accounts and taxes. Once such power is conferred, it is empowered to issue written notice to a bank to furnish certified copies of bank accounts of persons they are probing or that of their spouses or children. It will also empower them to require the Commissioner General of Inland Revenue to issue a certified copy of any document including tax returns of persons, their spouses or children.

The CBSL bond scam was earlier probed by the parliamentary Committee on Public Enterprises (COPE) chaired by Janatha Vimukthi Peramuna (JVP) MP Sunil Handunetti. It was tasked on May 22, 2015 to go into the scam. Most details relating to the matter transpired. Its report after 17 months and 14 sessions, held that the CBSL’s former Governor Arjuna Mahendran was directly responsible for the scam. It also held that Perpetual Treasuries Ltd., where Mahendran’s son-in-law Arjun Aloysius was associated, was able to earn a large profit through the bond transactions. The Committee called for legal action against them and some Central Bank officials.

Commenting on the COPE report, President Maithripala Sirisena told a religious event at the Abhayarama Temple in Narahenpita on January 25, “It has come to my attention that the (COPE) report had been forwarded to the Attorney General’s Department and then to the IGP for their observations before the report was approved by Parliament. I inquired into this. According to investigations already conducted, they have ruled that the probe should be conducted not as a criminal case but as a civil one. I disagree with that. I want this to be done right. I have to emphasise this to the country.” Thus, provision has been made in the Presidential warrant that the Commission is to function; “without prejudice to any measures that have been taken or which will be taken by relevant authorities including the CBSL, in the exercise of their statutory and legal responsibilities.”

There have been some serious misconceptions in Government circles about the role of this Commission of Inquiry. Sports Minister Dayasiri Jayasekera said at the weekly Sri Lanka Freedom Party (SLFP) media briefing on Thursday that the Commission was mandated to recommend punishments to persons, if any, found guilty of criminal acts. In reality, however, this Commission of Inquiry has not been mandated in the President’s warrant to probe whether there has been a contravention of any law. Therefore, the question of investigating criminal acts or finding any person guilty does not arise.

The other terms of reference of the Commission, which further underscore this position, are: Whether there has been any malpractice or irregularity, or non-compliance with or disregard to the proper procedures applicable in relation to, management, administration and conduct of affairs resulting in damage or detriment to the Government or any statutory body including the CBSL. Whether any contractual obligations have been entered into or carried out, fraudulently, recklessly, negligently or irresponsibly, resulting in damage or detriment to the Government or any statutory body including the CBSL. Whether there has been non-compliance with, or disregard of, the proper procedure applicable to the calling of tenders or the entering into of agreements or contracts relating to such matter on behalf of the Government. Whether such non-compliance with, or disregard of proper procedures has resulted in the improper or irregular or discriminatory award of such tender for sale of bond. Whether proper procedures and adequate safeguards have been adopted resulted in the obtaining the optimum price or benefit for the Government. The person or persons responsible for any act, omission, or conduct, which has resulted in such damage or detriment to the Government or any statutory body including the CBSL. Whether any inquiry or probe had been obstructed or prevented in any manner, resulting in damage or detriment to the Government or any statutory body including the CBSL, and, if so, the person or persons responsible for such obstructions. The procedures which should be adopted in the future are carried out with transparency and with proper accountability with a view to securing the optimum price or benefit for the Government. Whether there has been misuse or abuse of power, influence, interference, fraud, malpractices, nepotism or any act or omission connected with corrupt activity. Some legal experts say it is abundantly clear from the Commission’s Terms of Reference that it has not been asked to probe violations of any law. They all relate to probing issues like; “irregularities,” whether “proper procedures,” were followed, “malpractice,” committed in respect of the bond issues. Examples from the warrant, these experts further point out, are: It has become necessary to inquire into and investigate to identify persons alleged to have been so involved in irregularities com-