CJ should have resigned over husband’s role in NSB-TFC deal- UNP

By Shamindra Ferdinando

UNP MP Harsha de Silva says that investigations into the conduct of Chief Justice Dr. Shirani Bandaranayake and her husband, Pradeep Kariyawasam, one-time Chairman of the National Savings Bank (NSB) shouldn’t be mixed up.

National List MP de Silva insists that the investigations should be handled separately and all those involved in the illegal transactions punished regardless of their social status. Asked whether he was satisfied with the investigation into the controversial purchase of close to eight million shares of The Finance Company by the NSB at 65 per cent above the market price in late April 2012, the UNPer said that the government should conduct a thorough inquiry.

He said that he was responsible for revealing the fraudulent transaction on April 29, 2012 having verified facts as regards the sordid NSB-TFC deal and also pointing out the fact that the NSB chief was Chief Justice Bandaranayake’s spouse.

UNP MP de Silva reiterated that as a proper investigation into the NSB-TFC deal wasn’t possible due to Kariyawasam’s wife being the Chief Justice, he felt Dr. Bandaranayake should resign. "But not once have I said that the CJ should be removed for what Pradeep Kariyawasam was alleged to have done."

Responding to allegations that he on behalf of the UNP had demanded the impeachment of Chief Justice Bandaranayake though the party now played a different tune, de Silva said he never called for the prosecution of Dr. Bandaranayake. The UNPer accused the government of misinterpreting a statement issued by him on April 29, 2009 to justify ongoing efforts to impeach Dr. Bandaranayake. He said that he stood by reference to the CJ and her husband that: "The husband of the Chief Justice, Pradeep Kariyawasam, who continues to enjoy the power and position as chairman of the NSB, among several other plum postings offered by the Rajapaksa government in a glaring example of conflict of interest and Hennayake Bandara, its General Manager, must justify to the public under what circumstance almost Rs 400 mn of depositor money guaranteed by the government was spent on a high risk transaction and why they paid 65 percent more than the market price."

In the wake of President Mahinda Rajapaksa ordering the cancellation of the transaction, Pradeep Kariyawasam resigned in the third week of May, 2012. Kariyawasam received the appointment in the third week of May 2010. Earlier, he functioned as the Chairman of Sri Lanka Insurance Corporation (SLIC). MP de Silva said that the NSB-TFC deal was discussed during a three hour adjournment motion moved on May 23, 2009 close on the heels of Kariyawasam’s resignation as NSB chief.

Those appointed by the Central Bank had totally mismanaged TFC and acted in their own interest while ignoring regulations, MP de Silva said.

"Anyone serious about a true investigation can start from there. The investigation needs to unearth the shady deals going back to 2009 and probe why the people appointed to run TFC were appointed? It must unearth who appointed them and what their connections were to the top echelons of the Central Bank. It must examine the previous business relationships among the cast of actors of this stinking deal. Their previous criminal records must be unearthed and particular reference must be made to allegations on various pyramid scams. The investigation must be set in the background of the golden ‘pump-and-dump’ era of the Colombo Stock Exchange (CSE) that was controlled by a powerful group of people and supported by the Employees Provident Fund (EPF). I maintain that this deal was only one of dozens of such stinking deals done and once we are able to get the transaction details of the EPF many other frauds will be unearthed and many powerful people will be implicated. Let me tell you that the no amount of threats by the desperate criminals to intimidate me into silence will succeed. Someday soon the truth will come out on how the ‘god fearing’ and ‘daily temple going’ mafia robbed the innocent people of this country and their children."

Asked whether he believed a mechanism was necessary to carry out background checks on people taking up top positions in the judiciary and the banking sector, de Silva said that he couldn’t comment on judicial appointments. "But, in the banking sector there are very clear ‘fit-and-proper’ legal guidelines. Section 42 of the Banking Act of 1988 provides clear criteria on who can and cannot be appointed as directors of banks. Any and all Board appointments to banks must be cleared by the Central Bank as per these ‘fit-and-proper’ guidelines. People with criminal convictions or those who have deceived thousands of depositors must never be made directors of banks. Background checks are above and beyond these legal criteria. Just because one happens to be a family member, a relation or a friend of a high official of the Central Bank does not qualify him or her to become a director or in some instances a chairperson of a bank. Equally inappropriate is the new practice of Central Bank staff joining regulated banks and finance companies as directors without a cooling off period. In a classic case, a very senior Central Bank official, the person who was in charge of the EPF investment committee, was appointed a director of Tabrobane Holdings, the parent company of the stock broking company that was involved in this disgusting NSB-TFC deal in the totally bizarre case where it acted as both the buying and selling broker; within only a few months of his retirement."

Commenting on a recent briefing given by External Affairs Ministry to the Colombo based diplomatic community, de Silva said that a dossier prepared by the government alleged that he along with several other Opposition members called for the impeachment of the CJ.