The gazette notification on past issuance of Treasury Bonds has run into a tangle with Minister of Finance Ravi Karunanayake challenging former President Mahinda Rajapaksa to go to courts if he could prove his innocence, as not being accountable for the signing of the gazette dated 1 January 2015 as Minister of Finance.
“I challenge Mahinda Rajapaksa to go to courts and prove his innocence as the person not responsible for the gazette on the issuance of Treasury Bonds before January 8, 2015,” Minister Karunanayake said.
He questioned, why Mahinda Rajapaksa as Minister of Finance didn’t sign the gazette notifications in 2013 and 2014?. “This is how he has been conducting affairs as Finance Minister, with his goons in the Central Bank.
“I will expose all the fraudulent dealings of Rajapaksa and his henchmen who were running the Central Bank at that time,” the Minister said.
However, the Registered Stock and Securities Ordinance is clear on how government securities should be traded, what has to be included in the gazette notification and who is finally responsible for the issuance of securities.
Section 4
Section 4 of the Ordinance specifies: the minister in charge of the subject of finance shall in respect of each loan to be raised under this Ordinance specify by order published in the gazette- a) the sum of money to be raised by that loan; b) the modes of raising the loan and the manner in which such loan is to be raised; c) the rate of interest payable on the loan or the method of determination of the rate of interest payable; d) the dates on which the interest on the loan shall be payable; e) the rate at which and the period at the end of which appropriation out of the Consolidated Fund and assets of Sri Lanka shall be made as a contribution to the sinking fund established for the purpose of redeeming that loan and the date from which such contributions shall commence; (f) the date of redemption of the registered stock or securities to be issued for the purpose of raising that loan.
Central Bank Deputy Governor Dr. Nandalal Weerasinghe said, accordingly it is the former Finance Minister that is responsible for the signing of gazette notifications for all Treasury Bond issuance before January 8, 2015. “Thereafter it is the current Finance Minister who is responsible to sign the gazette for the issuance of Treasury Bonds.”
He said, the gazette notification of November 2016 was neither signed by the former Minister of Finance nor the current Minister which is not compliant with the procedure of publishing gazettes. “No gazette on issuance of Treasury Bonds could be published without the name and signature of the Finance Minister. The gazette printed in November 2016 does not have the signature of the former Finance Minister. It only states his name as the minister in charge of finance.
“This has nothing to do with politics. There has been at some point an oversight in following the proper procedure by Central Bank officials,” Dr. Weerasighe said.
However, the former President who was also Finance Minister until January 8, 2015 responding to the allegations last week has said, he would go to courts on this matter.
He has said, the said gazette had been published long after that date and that he did not sign it. “Therefore, I see this as a diabolical attempt to mislead the public and palm off the Yahapalana government’s crooked bond issues on me and my government”. In the past, rupee securities were issued under the Registered Stocks and Securities Ordinance enacted in 1937. Rupee securities were issued at fixed interest rates and could not be traded in the market. However, with the Treasury bond auctions from 1997 publishing a gazette is not possible as the interest rates cannot be known in advance.
Central Bank Governor Dr. Indrajit Coomaraswamy, at a media briefing last Monday said, gazetting government securities in advance when rupee securities were issued under the Ordinance enacted in the 1930s, but with bond auctions commencing, it is not practical to give advance notifications as it operates under market dimensions.
However, the Governor stated, despite the impracticality the Central Bank has complied with the spirit of the Ordinance by providing maximum information on bond issuance to the public.
Signature
Financial experts said, the gazette should not have been printed without the signature of the relevant Finance Minister who is finally responsible for the trade.
“Its true there has been a mistake in printing the gazette without a proper authorization but someone has to take the blame for it,” a market analyst said.
According to Additional Director, Statistics Department of the Central Bank Dr. M.Z.M Azim as quoted in our sister paper last Friday, the former Central Bank Governor Arjun Mahendran had walked into the Public Debt Department when the Treasury Bond auction was underway. Further he states that he had never experienced an occasion where a Central Bank Governor visited the Public Debt Department when a Treasury Bond auction was taking place.
When we contacted the Joint Opposition (JO) for its stance, Leader of the MEP and MP Dinesh Gunawardena said, the JO has made it very clear to the public that it categorically rejects the statement made by Finance Minister Ravi Karunanayake, that it has no basis, and that the gazette has not been properly understood by the Finance Minister.
“We reject the statement made by the present Finance Minister who has contradicted his own statement and the Central Bank. This is a serious issue and we have called for a special debate on the matter. We have called for the immediate resignation of the present Finance Minister and we will keep pressing for this cause for the benefit of the people,” Gunawardena said.