Forensic audit- a sham to save bond scammers: Cabraal

Audience

• Says audit a time-buying tactic for bond scammers to save their neck
• Charges despite audit costing Rs.1.5bn, nothing useful had come out of it
• Says Monetary Board had no right to provide oversight to forensic audit
• Wants perpetrators criminally charged and convicts stripped of civic rights

In what appears to be the sharpest rebuke levelled against the Central Bank bond scam so far, Senior Economic Advisor to the Prime Minister, Ajith Nivard Cabraal, who is also an ex-Central Bank Governor, said the purported forensic audit did nothing but gave time for the mastermind and the scam’s perpetrators to stay clear of the law. 

A presidential committee inquiring into the bond scam recommended a forensic audit as part of the probe into the alleged malpractices of the public debt issuance process of the 
Central Bank. 

The audit included the pre-2015 era, which according to Cabraal, was a covert distraction to implicate the previous Central Bank officials of misdeeds and to give further time for the real bond scammers to escape the law.

“During the entirety of year 2018, ‘forensic audit’ was held out as the next step in the investigation into the bond scam. But nothing happened,” said Cabraal at the launch of his book titled ‘The Great Bond Scam Cover-Up,’ last Friday in Colombo.

Cabraal maintained that the Monetary Board of the Central Bank at the time had no rightful role to provide oversight for the forensic audit as almost all of its members had been tainted by the scam or involved in the cover up.

He said the forensic audit should have been carried out by the Auditor General’s Department.

“In 2019, quite astonishingly, the Monetary Board and the Central Bank embarked on an exercise, under their authority to carry out a purported forensic audit covering the pre-2015 era. But no one questioned as to the nexus between the bond scam and the (reportedly) Rs.1, 500 million forensic audit,” Cabraal stressed. 

Speaking further, he accused the previous Wickremesinghe administration of using various tactics to cover up the scam. 

He said the Wickremesinghe administration continuously silenced the whistleblowers and dissolved the Parliament just before the tabling of a report by the Committee of Public Enterprise (COPE) on the bond scam before the Parliament. 

In recent times, the Central Bank also withheld information on the progress of the bond scam investigations citing the ongoing forensic audit. 
Cabraal estimated the loss of the cover-up to the economy to be around a trillion rupees and termed the saga as the, ‘mother of all cover-ups’.

He said the direct and indirect involvement by the leaders of the previous regime in the run-up to the bond scam, its execution and its intense cover-up has been well established while the involvement of the then Central Bank Governor Arjun Mahendran and his connivance with Perpetual Treasuries Limited have been clearly identified and documented. 

“After 5 years of successful evasion, it’s time to bring the main culprits to justice in 2020,” Cabraal said.

 “Some persons who fix cricket matches are barred from cricket for life. In the same way, these bond scammers who have caused a series of losses totalling to around one trillion rupees must be stripped of their civic rights for life,” Cabraal stressed.