Coping With COPE

It’s already yesterday’s news that the Parliamentary Committee on Public Enterprises (COPE) chaired by JVP MP Sunil Handunnetti last week concluded that Former Central Bank Governor Arjuna Mahendran was “directly responsible” for the controversial transaction of treasury bonds that took place in February 2015. The transaction allowed a primary dealer with ties to Mahendran’s son-in-law to turn huge profits that continue to raise eyebrows. The ruling has brought into question the credibility and integrity of the present Yahapalana Government which rode into power on a platform of good governance and accountability promising to rid the country of corruption and financial misappropriation.

COPE Chairman and JVP MP Sunil Handunetti’s commitment to the investigation has been widely lauded. Image courtesy: asianmirror.lk

The conclusions reached by the 26-member committee appointed to investigate the matter are now in the public domain. Barring UNP MP Ranjan Ramanayake, all members have signed the 55-page document (albeit with some questionable footnotes in the case of the UNP members), unanimously holding the former governor responsible for what has widely been called one of the biggest financial irregularities in the country’s history.

The Government, for its part, is attempting to spin the COPE ruling as a victory for democracy, arguing that such independent inquiry into the dealings of an institute under the purview of a sitting Prime Minister would’ve been all but impossible during the previous administration. The Janatha Vimukthi Peramuna (JVP), which was instrumental in bringing the matter to light from March last year onward, has vowed to keep the fight going, with party leader Anura Kumara Dissanayake accusing Prime Minister Wickremesinghe of attempting to stifle investigations, and calling on the Government to carry out the recommendations made in the COPE report without delay. The Joint Opposition, meanwhile, is fishing in troubled waters as expected, no doubt thankful for the opportunity to call the Government out on its hypocrisy, conveniently forgetting its own ties to Perpetual Treasuries. The Pivithuru Hela Urumaya led by erstwhile JHU stalwart Udaya Gammanpila went a step further and called for the resignation of Prime Minister Ranil Wickremesinghe, threatening to bring a no-confidence motion against the latter if he fails to comply, although it’s highly unlikely either scenario will come to pass.

Prime Minister Ranil Wickremesinghe has been accused of stifling the investigation in an attempt to protect Mahendran. Image courtesy: alchetron.com

President Maithripala Sirisena has so far remained stoically silent since the pronouncement of the COPE verdict, but it is worth noting that it was he who had earlier overruled the UNP’s insistence on reappointing Mahendran, a dual-citizen holding Sri Lankan and Singaporean passports, as CB Governor. A compromise was reached and renowned economist Indrajith Coomaraswamy was appointed who, incidentally, revealed yesterday that the Monetary Board of the Central Bank will meet this Friday to look into the matter. It was apparent from the start that President Sirisena was not terribly pleased with his Government’s handling of the situation, and his recent outburst on investigations carried out against members of the defence establishment, though unrelated, was speculated to have been fueled by his displeasure over the fiasco.

President Maithripala Sirisena, who was vehemently opposed to the reappointment of Mahendran as Governor, with current CB Governor Indrajit Coomaraswamy. Image courtesy: DBS Jerayaj

In a new development, deputy Minister of State Enterprise Development Eran Wickramaratne this week went on record expressing the Government’s willingness to introduce new legislation in order to recover the money lost as a result of the scam, footnotes notwithstanding, if it transpires that present legal frameworks are inadequate.

Though retroactive application of new laws is generally frowned upon, the Deputy Minister said that the bond issue can be treated as a special case if there is enough support for it from the public.

“I urge the judiciary not to hide behind allegations of political interference and carry out its mandate. It’s a public report. You can take action. The Prime Minister has stated that he’ll hand it over to the Attorney General,” he told journalists at the Sirikotha Party Headquarters on Monday.

What’s been evident from the start, however, is that the Government has been less than enthusiastic about investigating the charges against their man Mahendran. A three-member committee of lawyers appointed by the Prime Minister in 2015 concluded that Mahendran had “no direct role” in the Central Bank’s decision to accept bids for treasury bonds exceeding the amount it had initially offered. According to media reports at the time, the previous incarnation of COPE headed by MP D. E. W. Gunasekara had also pointed to an involvement of Mahendran and Perpetual Treasuries in a “related party transaction.” But as it turned out, Parliament was dissolved before this report could be tabled, and the matter was put on the backburner for the time being.

Former Central Bank Governor Arjuna Mahendran has long denied any wrongdoing, and is currently in Singapore, where he is a citizen. Image courtesy nation.lk

Interest in the bond issue resurfaced when Perpetual Treasuries recently reported shockingly high after-tax profits of up to Rs. 5 billion, once again drawing the ire of the public, including traditional UNP voters who were finding it increasingly difficult to explain away the disappointing behaviour of the very government they had voted into power with great expectations. While it’s still early days, the voting public’s fears of a return to a free-for-all kleptocracy cannot be discounted. The powers-that-be are surely aware of this, if their comically hasty attempts at damage control are any indication.

The COPE report now sits with the Attorney General, and what transpires from here onward will reveal once and for all the seriousness ‒ or lack thereof ‒ of this administration’s commitment to accountability and good governance. Corruption was arguably the main reason the previous regime was shown the door by the people of this country, and if this Government doesn’t want to follow suit, it’s imperative that the culprits are brought to book sooner rather than later. Its very survival may depend on it.

Featured image credit: Ishara Kodikara