President drafts special action plan for bond and PRECIFAC reports

• New CID unit to report to AG, Civil Procedure Code to be amended to fast-track loss recovery 
• CB’s FIU and Exchange Controller to also partake in investigations 
• Speaker to be told to act against COPE members who called Aloysius during probe
• AG to consider passing new Act to recover bond losses and avoid court delay 
• Sirisena calls for “highest level of transparency” during probes 

President Maithripala Sirisena has outlined tough measures to deal with culprits identified in the bond and PRECIFAC reports in a special action plan that includes new legislation, strengthening the Central Bank and a special CID unit to investigate financial crimes under the Attorney General.

President Sirisena held a high-powered meeting on Wednesday to examine the steps required for early implementation of the recommendations made by the Presidential Commission of Inquiry on the Central Bank bond sale and Serious Acts of Fraud, Corruption and Abuse of Power, State Resources and Privileges (PRECIFAC) reports, the President’s Office said in a statement.

The Attorney General, Central Bank Governor, Commission to Investigation Allegations of Bribery or Corruption (CIABOC) Director General and senior lawyers participated in this discussion where the progress of the action taken by them to punish the culprits identified in the two reports was reviewed. It was stated that initiating legal action against the responsible parties would be done by the AG and Bribery Commission based on relevant legislation including the Penal Code, Public Property Act and Money Laundering Act.

“If the investigations of the Commissions led to the revelation of additional wrongdoings, such persons will also be dealt with under the law. A special unit will be set up at the CID under the instructions of the AG to further investigate financial crimes. It has been recommended to get the support of the Central Bank’s Financial Intelligence Unit and Exchange Controller for this purpose. A forensic audit examination by the Central Bank has also been recommended,” the statement added.

The Central Bank in a statement released earlier this week said it had commenced a forensic audit under a third party and declined to make any statement regarding bond sales during the 2008-2014 period until the new audit was completed.

The statement also said an amendment to the Civil Procedure Code was being contemplated to expedite legal actions to recover projected losses to the Government. The AG has paid attention to hold the properties accumulated illegally by Perpetual Treasuries and companies attached to it through bond transactions.

“The AG will look into the possibility of passing a separate Act in Parliament to recover the loss to the Government and the EPF to avoid the delay in court procedure. It was also recommended to hold a forensic audit examination on the EPF involvement in Treasury Bonds and Treasury Bills transactions from 2008-2014. New laws will be introduced to empower the Central Bank to prevent the repetition of similar incidents in the future.”

The Speaker of Parliament will be directed to take action against the COPE members who had communicated with PTL owner Arjun Aloysius while the COPE probe was in progress and impose a Code of Conduct for MPs functioning in COPE, the statement went on to say.

As the commission referred to the inherent delay of civil lawsuits, the Government instructed the AG to take necessary steps to draft the required legislation to recover misappropriated public funds in a swift manner.

A forensic inquiry was also recommended to be conducted to find out about the Treasury bonds and bill payments of the Central Bank between 2008 and 2014 and the use of the funds of public servants deposited with the Employees Provident Fund (EPF) and Employees Trust Fund (ETF).

According to the statement, the President emphasised the importance of maintaining the highest level of transparency in the Government from the highest position and asserted that there were lessons that could be taken from the commission reports in order to establish a national dialogue on how to respond to the malpractices of government intuitions and public officers.

The President advised the officers to take necessary steps to enact reforms to the Public Debt Department and Monetary Board of the Central Bank in order to avoid such frauds in the future.

The reports of the Commission on the Treasury bond issue and PRECIFAC were forwarded to the AG’s Department and CIABOC and are to be presented in Parliament on Wednesday.

Considering the interest of the public regarding the Treasury bond issue, the President advised for the report to be published on www.presidentsoffice.gov.lk.

Secretary to the President Austin Fernando and Secretary of the National Economic Council Prof. Lalith Samarakoon also attended the discussion.