Five forensic audit reports on bond scams ready by next month

April 27, 2024

political Current Affairs

Five forensic audit reports on bond scams ready by next month

October 12, 2019

Five out of six forensic audits into alleged Treasury bond scams and transaction of Rs. 2.2 trillion Employees’ Provident Fund (EPF) are nearing completion and those audit reports will be ready by next month, Central Bank (CB) Governor Dr. Indrajit Coomaraswamy said.He told a media conference on Friday that the forensic audit reports on the Treasury bond and EPF transactions since 1998 will be submitted to the Attorney General and necessary legal action will be taken there after. BDO India and KPMG are conducting the forensic audits and five of those audits began in April this year.

Most of those audits are to be completed in two to three months and the longest audit will take at least six months for its completion, Dr Coomaraswamy previously announced. The Cabinet Tender Committee appointed to select prospective bidders has awarded contracts to BDO India and KPMG at an agreed payment of Rs.250 million and it was approved by the Cabinet on March 6 this year, official sources said.

These forensic audits were recommended by a Presidential Commission of Inquiry into the alleged bond scam in 2015 and 2016, and will also cover earlier periods since 1998, when bonds were issued outside auctions.Holding a forensic audit examination on the EPF involvement in Treasury Bonds and Treasury Bills transactions from 2008-2014 was also recommended by the Commission.

An amendment to the Civil Procedure Code is being contemplated to expedite legal action to recover the massive loss of Rs. 1.6 billion to the government, Presidential Secretariat sources said. The Attorney General will look into the possibility of passing a separate Act in Parliament to recover the loss to the government and the EPF avoiding delays in court procedure.

New laws will be introduced to empower the Central Bank to prevent reoccurrence of similar incidents in the future.The Speaker of Parliament has been directed to take action against the members of the Committee on Public Enterprises (COPE) who had communicated with Perpetual Treasures Ltd’s owner Arjun Aloysius while the COPE probe was in progress, these sources said.

Meanwhile Sri Lanka will be raising 60 billion yen (US$500 million) by issuing 10-year Samurai bonds by mid next month hopefully before the Presidential elections, Dr. Coomaraswamy disclosed. The Japan Bank for International Co-operation (JBIC) will provide a 95 per cent guarantee on these Samurai bonds.

The CB has already appointed three joint lead managers Mizuho Securities Company Ltd, SMBC Nikko Securities Inc and Mitsubishi, and UFJ Morgan Stanley Securities Co. Ltd for the bond issuance with the approval of the cabinet. In another major development in state economic data processing field, six task forces with representatives of the CB are reviewing the process of computation of economic statistics.

The present process of data collection and computation of data particularly with respect to estimates of the Gross Domestic Product (GDP) and the Colombo Consumer Price Index (CCPI) by the Department of Census and statistics will be overhauled in accordance with the recommendations of the task forces, he said.