Perpetual CEO says Aloysius lied to COPE

By Himal Kotelawala

Perpetual Treasuries (Pvt) Ltd (PTL) CEO Kasun Palisena, under relentless questioning, yesterday told the Presidential Commission of Inquiry on the controversial bond issuance that Former PTL Director Arjun Aloysius had lied to the Committee on Public Enterprises (COPE).

In his cross-examination of the witness, Deputy Solicitor General Milinda Gunatillake made reference to a resignation letter said to have been written by Aloysius in which the Former Director cites a potential conflict of interest due to the nature of his relationship with Former Central Bank Governor Arjuna Mahendran. In the letter, a part of which was read out loud by Palisena, Aloysius clearly accepts that he oughtn’t to be operationally involved in the running of the company, in the interest of maintaining good governance.

DSG Gunatillake declared that this claim was not true, as audio recordings of telephone conversations subsequent to that, where Aloysius can be heard instructing Palisena on how to bid, indicate that he was very much involved in the running of PTL.

Palisena, however, insisted that Aloysius was not operationally involved in everything but only in “certain events,” but Gunatillake maintained that the businessman had had the final say on virtually every aspect of the company.

Many questions and half-answers ensued, with Palisena stopping short of saying outright that his former boss had, in fact, lied.

Commissioner Justice Prasanna Jayawardena intervened, at this point, to ask Palisena if what Aloysius had said to COPE about not being operationally involved was factually correct or not, to which Palisena simply said “he was involved.”

 “So in other words, he lied. Did he lie or not?” asked Justice Jayawardena.

“He has,” Palisena finally said.

Audio recordings of telephone conversations between several parties, including one call between Palisena and a close friend of his from a leading development bank recorded in December 2015, were played before the Commission, after which the question of PTL Chief Dealer Nuwan Salgadu’s earlier statement that he had been instructed by Palisena to delete recordings harmful to the organisation came up.

Justice Jayawardena, referring to an affidavit submitted by Salgadu claiming that he had received such instructions, asked Pailsena if Salgadu had lied in that statement.

“Yes. I do not agree with [that statement],” said Palisena.

Asked if he could think of a reason as to why Salgadu might want to lie about something like that, Palisena claimed he could not, and added that the two were still close friends.

DSG Gunatillake, meanwhile, observed that PTL had provided the Commission some 240,000 audio recordings that were not labelled in an easily identifiable manner, but had somehow been able to provide Central Bank of Sri Lanka (CBSL) officials a specific recording “within minutes” during an onsite visit. He submitted that Palisena had kept a “close track” on voice recordings

(Primary dealers are required, it is learnt, to maintain voice recordings pertaining to bond transactions, as part of a series of CBSL regulations).

In the December 2015 call, Palisena and the dealer from the development bank can be heard discussing, suggested Gunatillake, whether or not it would be a good idea for them to “stage” another voice call as the two individuals had been engaged in a “grand chat” on this particular call.

Asked what the new call was regadring, Palisena said “mata mathaka nehe” (I don’t recall).

Palisena added that a need for a new recording might’ve arisen because the two parties had been recorded engaging in some friendly banter that possibly included foul language.

Gunatallike accused Palisena of misleading the Commission, going as far as to call him an “unrepentant liar”. In a previous instance yesterday, Gunatillake said the PTL CEO was lying because of the “9-digit bonus” he had received.

Palisena disagreed.

The Deputy Solicitor General submitted that both Palisena and Aloysius knew of the “fabrication, destruction and concealing” of evidence that was carried out with the purpose of misleading the Commission.

“I have not done that,” said Palisena.

Asked if Aloysius might’ve done it then, he said while he was sure Aloysius hadn’t, he could not speak for him.

When it was pointed out to Palisena, at one point, that nobody had challenged Salgadu’s statement about receiving instructions advising him to delete recordings, the CEO said he did not know about that and claimed that he did not involve himself in operations pertaining to the recording system.

This prompted Commission Chairman Justice K. T. Chitrasiri to quip that it was akin to a husband not knowing about his wife.

In a similarly lighter vein, DSG Gunatillake remarked, “It must be something to do with the [witness stand].”

Earlier in the day, it was revealed in the testimony that individuals connected to the alleged ring of dealers that, according to Gunatillake, helped PTL make unlawful gains, had used suspected codenames such as Mod Goviya, Little Johnny and Beehive. Gunatillake suggested that Mod Goviya was a nickname used for Palisena by his dealer friends, while Beehive was an official from an insurance company with a bee in its logo. A recorded phone call that was played before the Commission refers to a payment of Rs. 1,145,400 made to a “Little Johnny.” Palisena insisted that Little Johnny could be “anyone” – a slang term referring to all smalltime bidders.

The Commission was seemingly unsatisfied with this answer, pointing out that Little Johnny in this case was referring to a specific individual. “Come up with something believable,” said Justice Jayawardena.

Gunatillake then played a previous recording between Aloysius and Palisena in which the former mentions a meeting where state banks had purportedly been instructed to bid low. The DSG asked Palisena who might have been giving such instructions to state banks, and the latter, after several pauses, attempted to guess which Ministry state banks might be coming under.

“Livestock Development?” offered Gunatillake.

“No, sir,” said Palisena.

The PTL CEO’s attorney President’s Counsel Nihal Ferando will lead evidence in his re-examination of his client on Monday.