Lankaputhra’s Lasantha vows to bow to Monetary Board ruling on his appeal

By Dharisha Bastians

Making himself out to be a martyr, Chairman of the state owned Lankaputhra Development Bank Lasantha Goonewardena yesterday vowed to bow to the ruling of the Monetary Board after the Bank Supervision Department of the Central Bank of Sri Lanka (CBSL) determined that the top official had failed his ‘fit and proper’ assessment.

“I have appealed the Bank Supervision Department ruling on 4 April 2016. This appeal must go to the Monetary Board. I will bow to the board’s decision,” Goonewardena said.

The Lankaputhra Bank Chairman who is facing a storm of controversy over his appointment and failure to meet stipulations of the Banking Act, quoted Buddhist revivalist leader Anagarika Dharmalapala, who said that all those who come forward to save the people of Sri Lanka must be prepared for brickbats.

When asked by reporters why he was choosing not to step down until the Monetary Board makes its ruling on his appeal in keeping with the principles of good governance, Goonewardena said it was the view of the Board that if he vacated the position legal action currently pending against those who have misused bank funds may not proceed.

Goonewardena also denied that he had attempted to influence the Monetary Board by meeting with Central Bank Governor Arjuna Mahendran and Finance Minister Ravi Karunanayake at the Finance Ministry on 28 March, four days after he received the letter deeming him ‘unfit’ to serve as Bank chairman from the CBSL Bank Supervision Department.

 “We asked for a meeting with the Governor and the Finance Minister as a Board because we felt we had to explain. The ruling is against me and I have to appeal, that is a personal matter,” he said.

The meeting continues to be controversial however because Governor Mahendran is Chairman of the Monetary Board. Finance Ministry Secretary, Dr. R.H.S. Samaratunga is also an ex officio member of the Monetary Board and will be compelled to act on the directives of his Minister who has already heard Goonewardena’s case privately. The five-member Board requires a majority of only three votes to overrule the decision of the Central Bank’s Bank Supervision Department, corruption watchdogs say.

Goonewardena also denied the violations cited by the Central Bank Supervision Department, reiterating his controversial claim that Lankaputhra was ‘not a regular bank’.

The Bank Supervision Department of Central Bank refused to ratify Goonewardena’s appointment as chairman in a letter dated 24 March 2016, after he was found to be in violation of the Banking Act for corporate governance violations and violating confidentiality regulations under the Banking Act.

The confidentiality laws were alleged to have been breached during a press conference organised by Minister of Finance Ravi Karunanayake which Goonewardena also attended.

 “I did not breach confidentiality. There were some allegations made against the Finance Minister. The allegations were about the Lankaputhra Bank. I am a political appointee. And as Chairman of the Bank I had to attend and clarify matters. People have a right to know about wastage of public funds during the previous Government’s tenure. I did it for the public good,” Goonewardena told reporters at the Bank headquarters in Nawala yesterday.

He added that the charge about his violation of corporate governance principles as set out in the Banking Act referred to his decision to be involved in the day to day operations of the Lankaputhra Bank.

“The board of directors made a specific decision that until operations at the bank were streamlined and the problems of the past were dealt with, the chairman and the working director would involve themselves in operational activities,” Goonewardena said.

The state bank Chairman also denied all the irregularities cited in the COPE findings on Lankaputhra during Goonewardena’s term. “I will give COPE detailed answers on all these matters,” he claimed.  

Corruption watchdog, the Anti-Corruption Front continued its campaign against what it calls the ‘protection’ of the Lankaputhra Chairman by the Central Bank Governor, firing off a letter yesterday to the Central Bank’s Bank Supervision Unit, citing Goonewardena’s claim that Lankaputhra Development Bank was “not a regular bank”.  ACF has queried the CBSL department on how it proposes to protect the depositors of Lankaputhra Development Bank if it is not a ‘regular bank’ that must abide by the directives of the Supervision Department of the Central Bank.

“Goonewardena is right. There is nothing regular about Lankaputhra Bank,” Tennakoon charged during an interview with Daily FT yesterday.

 

INSET

Lankaputhra Company Secretary in the dock over letter to Ministry

Lankaputhra Development Bank Chairman Lasantha Goonewardena said action was being contemplated against the bank’s Company Secretary Gamini Pitipana, over his letter to the Ministry of Public Enterprise Development on 11 May, claiming that Central Bank Governor Arjuna Mahendran had “recalled” the letter issued by the Bank Supervision Department over the chairman’s appointment.

“That letter is a problem and we have asked for explanation from our Company Secretary,” Goonewardena told reporters yesterday, after Governor Mahendran denied the charge in an interview with Daily FT earlier this week.

Pitipana told Secretary to the Ministry of Public Enterprise Development, Ravindra Hewawitharana, that the letter issued by the Bank Supervision Department on 24 March 2016 had been “recalled” by the Central Bank Governor. Pitipana attributes his claim to the minutes of the meeting on 28 March 2016 held at the Finance Ministry. Those minutes have not yet been made public, but could offer valuable clues as to the direction of the discussion between Goonewardena, Governor Mahendran and the Finance Minister that day.

“However consequent meeting held at the Ministry of Finance on 28th March 2016 chaired by Hon Minister of Finance, the Governor of Central Bank Mr. Arjun Mahendran recalled the said letter considering the clarifications of the Chairman and the Board of Directors of Lankaputhra Development Bank. Minutes of the said meeting is attached herewith for your consideration,” Pitipana’s letter to the Ministry of Public Enterprise Development said.

Advisor to the Anti-Corruption Front (ACF) Ranjith Keerthi Tennakoon said Pitipana was going to be sacrificed to save the Central Bank Governor.