How can Cabraal claim that he is a person of high integrity?

I was so amazed to read the responses given by the former CB Governor Ajith Cabraal to your newspaper on 8 June.

In particular, I could not control my laughter when I read his remarks about his so-called track record of high integrity: “Further my professional track record of over four decades will confirm that I am a person of high integrity and responsibility unlike certain persons who have been rocked with scandals within days of assuming office” – Ajith Cabraal to Daily FT on 8 June.  

It was during the reign of Cabraal as the Governor of the CB that Lakshman Hulugalle was appointed to the Board of Directors of the Commercial Bank, which is the largest private commercial bank in the country. 

As per the Banking Act, no one with a conviction could serve on a bank’s directorate. The usual procedure is that when a person is nominated to a bank board, the clearance of the Monetary Board has to be obtained whether such a person could serve on the board. 

In 1989, Lakshman Hulugalle was found guilty by the Colombo High Court for stealing Rs. 90,000 worth of timber. He pleaded guilty the following year and was sentenced to two years imprisonment suspended for 10 years and fined Rs. 20,000. 

Cabraal was the Chairman of the Monetary Board, which sanctioned the appointment of Hulugalle. How can Cabraal claim that he is a person of high integrity when he enabled the appointment of a convicted criminal to the directorate of the largest private commercial bank in the country?

We all know that Cabraal is a qualified accountant. Accountancy is a profession that is tainted with scandals of gross misconduct and massive financial frauds not only in Sri Lanka but all around the world. Enron and WorldCom scandals illustrated how accounting manipulations deceived and cheated the investing public in US. 

Even in Sri Lanka there have been many instances where professional audit firms have been accused of aiding and abetting financial frauds that robbed a colossal sum of money from the depositors in finance companies – i.e. Pramuka Bank, Golden Key. Therefore if accountancy is a pool of mud, is our former CB Governor like a flower of lotus that grows out of the mud?

It was during the time of Cabraal that the EPF, the management of funds of which comes under the CB, bought shares in the utterly bankrupt The Finance Company (TFC) of tainted businessman, Lalith Kotelawela. The EPF is the foremost retirement benefits scheme of the private sector employees in the country, which is made up the contributions of both employees and employers. 

We all know what happened to the former NSB Chairman, Pradeep Kariyawasam, when NSB bought shares of TFC in 2012. There was a huge public outcry over that deal and the transaction was annulled on the directions of the then President. The EPF investments are undertaken only after the approval is granted by the Monetary Board, of which Cabraal was the Governor. 

As per the latest financial results published by the TFC, its net assets are negative and carries accumulated losses worth Rs. 16.165 million. Why did the Monetary Board, which was headed by Cabraal, grant approval to the EPF to invest in TFC which put the wealth of the EPF members in this country in jeopardy by overlooking many other profitable investment opportunities in the Stock Exchange?

Why did eminent economists of the calibre of H.N. Thenuwara and Dr. Anila Dias Bandaranaike resign from the CB during the tenure of Cabraal?

Actions speak louder than words. Cabraal’s self-proclaimed legacy of high integrity and professional competence must be viewed and scrutinised in the context of all errors of omission and commission that took place under his watch as the Governor of the Central Bank. 

    Ashoka Mihindu