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Asian Tribune is published by World Institute For Asian Studies|Powered by WIAS Vol. 12 No. 2342

Gazette Notification, issued by then president Mahinda Rajapaksa - a unique example of fraudulent management of public debt

Colombo, 27 February, (Asiantribune.com):

Gazette Notification No. 1895/19 dated 1 January 2015 issued by the then president, Mahinda Rajapaksa is a unique example of relevance of fraudulent management of public debt by him, the then CB Governor Ajith Nivard Cabraal and officials in the Central Bank (CB) in violation of laws, the Finance Ministry announced yesterday.

Referring to Extraordinary Gazette Notification No. 1895/19 dated January 1, 2015 issued by former President Mahinda Rajapaksa as the Minister of Finance and Planning at the time, the Ministry of Finance yesterday said the gazette is a unique example of fraudulent management of public debt in violation of laws ,in the past.

Issuing a media statement the ministry said, the Minister of Finance is in receipt of Extraordinary Gazette Notification No. 1895/19 dated 01 January 2015 issued by Mahinda Rajapaksa, Minister of Finance and Planning at that time.

The Finance Ministry made several interim clarifications for the gazette revealed during evidence given by the secretary to Ministry of Finance on 23 February 2017 to the Presidential Commission of Inquiry (PCoI) on the Treasury bond issuances “The gazette contains authorization given under section 4 of the Registered Stock and Securities Ordinance to raise loans during the year 2015 through 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,” it said.

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 are issued again in 2015. It appears that the Gazette authorizes the past bonds also.

As per the gazette, loans will be raised through those bonds within the 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 this 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 this 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, the gazette is sent to the Government Printer to publish. The Central Bank has not followed this procedure on this gazette in the recent past. Instead, the Superintendent of the Public Debt Department has directly sent it to the Government Printer after getting the legal clearance from the Central Bank lawyers.

Information is available that the gazette dated 1 January 2016 to be published in 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.

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 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.

A full report will be issued to the media after investigations and corrective actions will be taken immediately. Appropriate legal actions will be taken against those errant officers under the provisions of the Registered Stock and Securities Ordinance.

In the meantime, former President Mahinda Rajapaksa says he will take the Finance Minister and the Central Bank to Court over the controversial Gazette notification dated Jan 1, 2015 on the issuance of treasury bonds by the Central Bank. Speaking at a public ceremony in Horana, Rajapaksa said he is currently seeking legal advice to take the Finance Minister and the Central Bank to Court over the issue.The former President said he was not in office when the Gazette was published.

Meanwhile, the Joint Opposition has planned a protest cum public awareness campaign today in front of the Central Bank over the issue.

- Asian Tribune -

Former President Mahinda Rajapaksa says he will take the Finance Minister and the Central Bank to Court over the controversial Gazette notification dated Jan 1, 2015 on the issuance of treasury bonds by the Central Bank.
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