ECONOMYNEXT – Chairman of Sri Lanka’s parliamentary Committee on Public Finance (COPF) Harsha de Silva has urged the International Monetary Fund (IMF) to prioritise accountability and transparency as the international lender goes into its first review of its programme.
“As the IMF evaluates our progress, we urge them to prioritize accountability and transparency. Confronting past mistakes is crucial for our nation’s recovery. Let’s work together to rebuild Sri Lanka on a foundation of truth and justice,” de Silva tweeted Thursday September 14 afternoon.
The main opposition Samagi Jana Balawegaya (SJB) MP made this call in a Twitter thread about questions he had raised at a recent press conference about a former Central Bank of Sri Lanka (CBSL) governor guarantee repayment to a Chinese-American financier named Benjamin Wey when Sri Lanka was on the brink of defaulting in January 2022.
“Benjamin Wei’s involvement in questionable activities, including ties to the Hamilton Reserve Bank and Fintech Holdings Ltd., is deeply concerning. How did a small bank in a nation with 50,000 inhabitants and GDP under $1 billion amass a $250 million stake in our bonds?” said de Silva.
The same question was raised by an article that appeared in the London-based Financial Times on September 08 in a piece titled ‘The mysterious ‘global financier’ suing Sri Lanka’.
The FT story was on a lawsuit filed by the US government in the first week of September.
“The case has been brought by Hamilton Reserve Bank in St Kitts & Nevis. Somehow, a small bank based in a country with 50,000 inhabitants and GDP of under $1bn has amassed a $250mn face-value stake in a Sri Lankan bond,” the FT wrote.
This specific bond was issued in happier times (2012) and lacks some now-common clauses that make bonds easier to restructure, the FT noted. What was unusual, according to the newspaper, was the size of HRB’s stake and the “unusual aggressiveness” of its lawsuit against Sri Lanka, which began almost as soon as it defaulted in April 2022. The lawsuit “smelt a bit fishy”, the FT wrote.
“We’d heard whispers about who might be behind HRB’s lawsuit, and last week Sri Lanka’s law firm Clifford Chance for the first time said explicitly who it thinks is driving this: a Chinese-American financier called Benjamin Wey,” the paper said, adding that Wey is no stranger to legal controversy.
According to the FT, Wey had contacted several creditors about joining forces against Sri Lanka, and had even emailed a presentation laying out their case.
MP de Silva said in his Twitter thread on Thursday that parallels with Greek bond crisis are evident, “as we see investments in ‘junk’ bonds raising anger”.
“Recent revelations of Wei rallying creditors against #lka only deepen suspicions of undisclosed deals, who truly invested in these bonds & at what discounted rates?
“The U.S., Britain, and France’s support underscores international unease. However, our refusal to accept allegations of #EconomicCrimes remains a significant challenge. The @IMFNews must not overlook governance issues in Sri Lanka’s recovery plan. 🌍 #IMF #Accountability,” he tweeted.
The IMF begins its first review of its ongoing programme in Sri Lanka on September 14. (Colombo/Sep14/2023)