Finance Ministry Cracks The Whip
The Finance Ministry has launched a full scale investigation into an Extraordinary Gazette Notification authorizing the issuing of treasury bonds in the past.
The Finance Ministry said last night that the Minister of Finance Ravi Karunanayake is in receipt of Extraordinary Gazette Notification No. 1895/19 dated 01 January 2015 issued by Mahinda Rajapaksaa, who was the Mistier of Finance and Planning at that time.
The gazette was revealed during evidence given by the Secretary to Ministry of Finance on 23 February 2017 to the Presidential Commission of Inquiry on Treasury bond issuances.
The gazette is a unique example of relevance of fraudulent management of public debt by Mahinda Rajapaksa, former Central Bank Governor Ajith Nivard Cabraal and his officers in the Central Bank, in violation of existing laws.
The gazette contains authorization given under section 4 of the Registered Stock and Securities Ordinance to raise loans during the year 2015 through the issuance of 31 Treasury bonds of different redemption periods at different interest rates at auctions as notified by the Registrar of Public Debt through newspapers.
The bonds stipulated in the gazette include many bonds issued in the past at various interest rates since 2011 as well as new bonds. There is no indication as to how bonds already issued in the past were issued again in 2015. It appears that the gazette authorizes the past bonds also, the Finance Ministry said.
As per the gazette, loans will be raised through the bonds within a sum of Rupees one thousand seven hundred and eighty billion authorized in the Appropriation Act, No. 41 of 2014.
The practice that has been followed in the past by the Central Bank is to issue the gazette back-dated as January 1 each year after issuing all bonds during the year in a hidden attempt to comply with the requirement of the Section 4 of the Registered Stock and Securities Ordinance while mismanaging bond issuances.
“When issuing the gazette, the required protocol has not been followed. With regard to issuance of a gazette by any Minister, the relevant institution should send the draft to the Secretary of the line Ministry. The Secretary then obtains the legal and technical clearance from the relevant officials in the Ministry and submits the gazette for the signature of the Minister. Only after the Minister’s signature can the gazette be sent to the Government Printer to be published,” the Finance Ministry said.
The Finance Ministry says the Central Bank has not followed the procedure on the gazette in the recent past. Instead, the Superintendent of the Public Debt Department has directly sent it to the Government Printer after obtaining legal clearance from Central Bank lawyers.
“Information is available that the gazette dated 1 January 2016 to be published by the name of Ravi Karunanayake, Minister of Finance, for the year 2016 also has already been sent to the Government Printer the same way in 2017. The publication of this gazette was immediately withheld,” the Finance Ministry said.
As such, all treasury bonds have been issued in violation of the provisions of the Registered Stock and Securities Ordinance.
“This is how the Central Bank officers, so called experts and professionals, mismanaged public debt to facilitate the Mahinda Rajapaksa Government and Ajith Nivaard Cabral through questionable private placements of bonds. In such gazettes issued in the past, all private placements were also legalized as issuance at auctions announced by the Registrar of Pubic Debt,” the Finance Ministry added.
The Finance Ministry said that a full report will be issued to the media following a full investigation and corrective measures will be taken immediately. Appropriate legal action will be taken against those errant officers under the provisions of the Registered Stock and Securities Ordinance.
