Arjuna Mahendran | WA Wijewardena | Chandra Jayaratne

The Committee on Public Enterprises (COPE) can table an interim report in Parliament recommending that the incumbent Governor of the CBSL Arjuna Mahendran’s term not be extended until the Committee’s final report into investigations conducted into the CBSL is released, good governance activists said.

The CBSL comes under the purview of COPE. The COPE is presently headed by its Chairman, Janatha Vimukthi Peramuna MP Sunil Handunneththi. Previously, the COPE under former Chairman, D.E.W. Gunasekera had produced a report into the controversy surrounding the scam involving the initial Treasury bonds issue in 2015 during Mahendran’s tenure.

Former Chairman of the Ceylon Chamber of Commerce, Chandra Jayaratne further added that even the report prepared by the COPE led by Gunasekera could be reissued and released by the present COPE as a preliminary report.

Even the initial committee appointed by the Government to look into the matter, which was criticized for being comprised those partisan to the powers that be, recommended that the matter be further investigated in terms of the conduct of the Bank of Ceylon and whether there was insider trading involving the CBSL, he observed, adding that it was not known publicly whether the said recommendations were implemented and the said investigations were in fact conducted.

“The COPE has no punitive powers but they can give pointers. At the very least, they can say that an extension should not be granted to Mahendran until the final report on the matter is put out,” he explained.

Handunneththi confirmed that no such report recommending that Mahendran’s term not be extended would be produced by COPE.

“This is a matter for the President and the Minister of Finance to decide. We will submit an interim report pertaining to the performance of 20 institutions including the CBSL for the three-month period from January 26 to April, institutions which were summoned before the COPE,” he added.

The interim report in Sinhala is ready and has been sent for translation to Tamil and English, he mentioned.

However, former Deputy Governor of the CBSL, W.A. Wijewardena noted that the appointment of the CBSL Governor was not part of the mandate of COPE, but that it was the Parliament that had to take action in this regard.

He mentioned that the founding father/architect of the CBSL and the drafter of the Monetary Law Act, No.58 of 1949, John Exter had given a valuable piece of advice to Governments (including Presidents, Prime Ministers and Finance Ministers), when selecting a candidate to appoint as the Governor of the CBSL, in that only a person with ‘unquestioned integrity’ should be appointed, emphasizing also that it was unquestioned integrity and not that the said person need not have been found not guilty in a court of law that mattered.

Governments up to 2006 followed this advice when appointing the Governor of the CBSL, he pointed out.

“The COPE reviews reports submitted by the Auditor General on public enterprises. The Auditor General is not confined to a mere financial audit, but can do an audit based on the value for money audit principle. This is where the CBSL bonds scam comes in where there is a loss of reputation to the institution and the effective manner of conducting affairs has been compromised,” he said.

“The COPE examines the said reports and calls for explanations. Previously, in COPE, there were more Government representatives and the Government exercised veto power where any Ministry or public body or politician had interfered and ruined such. Many valuable reports of the COPE have been discarded by the Government previously,” Wijewardena observed.

Chairman of the National Human Resource Development Council of Sri Lanka of the Ministry of National Policy and Economic Affairs, Dinesh Weerakkody was not available for a comment and Secretary to the Treasury, Dr. R.H.S. Samarathunga declined to comment.