The Public Enterprises Department (PED) of the General Treasury had not followed the Registered Stock and Securities Ordinance (RSSO) in issuing treasury bonds to the SriLankan Airlines (SLA) as capital infusion in 2012, the Presidential Commission of Inquiry (PCoI) on irregularities at SriLankan Airlines, SriLankan Catering and Mihin Lanka learnt yesterday.
Deputy Governor of the Central Bank S.R. Attygalle, who was the then Director General of the PED’s testimony was continued yesterday.
Through the budget 2012, the government has allocated USD 500 million for the SLA to strengthen its balance sheet and thereby to obtain loans for restructuring. This amount was proposed to be given in installments in five years.
According to the RSSO, it is the Finance Minister who has the authority to issue the treasury bonds to another party.
This issuance should be gazetted by the minister prior to the issuance with all the details such as the maturing date.
When questioned by Additional Solicitor General Neil Unamboowe, the Deputy Governor, however, said that it has been the practice of the General Treasury that it first issues treasury bonds and informs the Minister after the action.
On a previous day, the Deputy Governor was questioned by the PCoI on the issuance of bonds to the value of USD 500 million by the General Treasury instead of issuing money (cash) for the budgetary allocation.
The Additional Solicitor General highlighted that a Cabinet memorandum presented and passed in July 2011 by the then line minister has sought USD 500 million as the capital infusion for SLA under its restructuring project. He stressed the word ‘money’.
Therefore, he questioned the Deputy Governor how the General Treasury issued bonds when it has mentioned as money in the Cabinet paper.
Attygalle said when it is money, it could be cash or near money (bonds).
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