Heated arguments erupted at the PCoI on SriLankan Airlines, SriLankan Catering and Mihin Lanka (Pvt.) Limited yesterday over the USD 500 million infused to the national carrier, SriLankan Airlines (SLA), by the General Treasury in 2012 when the Deputy Governor of the CBSL, S.R. Attygalle, continued his testimony for the second consecutive day.
The Deputy Governor was questioned by Additional Solicitor General (ASG) Neil Unamboowe on bond issue to the value of USD 500 million by the General Treasury instead of issuing money (cash).
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 said the word ‘money’.
This money has been requested in USD and it has been expected to allocate this sum from the appropriation bills of five years from 2012.
Pointing out that the General Treasury had given this amount to the SLA as treasury bonds, he grilled the Deputy Governor as to how the General Treasury could issue bonds when it has mentioned as money in the cabinet paper.
Attygalle said that when it is money, it could be cash or near money (bonds)”.
“It says money, but there is no reference the Treasury Bonds”, ASG Unamboowe asked. He also referred to the Registered Stock and Securities Ordinance (RSSO) of Sri Lanka, where it says that the Treasury Bonds could be issued on the sanction of the Finance Minister by gazetting it by him.
The Deputy Governor, however, told the commission that a discussion held at the official level between CBSL officers and the SLA on February 22, 2012, then Secretary to the Treasury (ST) P.B. Jayasundara directed him as the then Deputy Secretary to the Treasury (DST) to issue bonds for this capital infusion. He said he has no documentary evidence to prove this.
The ST, however, had informed the SLA that this infusion could not be used for recurrent expenditure but to increase the balance sheet of the SLA and thereby raise funds from the outside institutions.
The Deputy Governor insisted that everything has happened in the due process and some are in the practice rather than the law.
“But we have to respect the law. Otherwise this country would not have the rule of the law,” the ASG said.
The testimony will be continued.