Most COPE report footnotes on Sri Lanka bondscam factual, reasonable: Commission

ECONOMYNEXT – A presidential commission of inquiry said most of the said most foot notes written by a minority of members of a parliamentary committee on public enterprises (COPE) were factually correct.

Nine out of 25 members of the COPE representing the United National Party while agreeing to the main recommendations of the report disagreed with some of the passages in the main report including some statements and calculations made by the Auditor General.

A controversy was fired over the footnotes by after 15 members who said they did not agree with the foot notes.

"..This Commission of Inquiry has found that, the Footnotes made by nine members of COPE including 4 of the members listed above, are, in the main, limited to factual observations and that these Footnotes are not incorrect or unreasonable," the final report of the commission said.

The commission interviewed Harsha de Silva, a legislator who is an economist who explained that the Auditor General’s stance that there was a loss if a bond with a coupon interest was sold at a discount was not correct.

De Silva a former Treasurer of a bank, explained that a bond can be sold at a face value only when the market yield matches its coupon.

The Commission said it agreed it agreed with the observation as "Market Factors such as the Yield Rates and Interest Rates which then prevail in the Market for similar Treasury Bonds, perceptions held by the Market of the likely trends in Yield Rates and Bonds which have been previously issued, prevailing economic conditions and global factors, all play a significant part in determining whether the CBSL is able to issue a bond at a ‘Discount’ or at a ‘Premium’."

There were 32 footnotes.

The commission said for example that footnotes 1 to 14 were factually correct but 15 and 16 were wrong, based on the evidence before it.

Some footnotes referred to information in a draft COPE report which was not published.





Some pointed out that calculations made by the Auditor General were based on assumptions.

Others contained recommendations, including that EPF funds had been mis-used and legislation was needed to protect it and improved investment schemes were needed.

Another footnotes involved a recommendation to investigate and find out how much of a loss Perpetual Treasuries caused to the EPF.

Footnote 27 recommended "that a detailed investigation be held into the Treasury Bond Auctions held and the Direct Placements accepted from the years 2008 to 2016 and further recommends that, a Forensic Audit be conducted," the commission.

The commission itself made a similar recommendation. (Colombo/Jan20/2018)


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