Foreign Affairs

In Defense Of Arjuna Mahendran

By Sarath de Alwis

Sarath De Alwis

Sarath De Alwis

I am time, the destroyer of all I have come to consume the planet. That one particular is dear to me who runs not right after the pleasant or away from the painful, grieves not, lusts not, but lets things come and go as they happen.” The Gita

Funds markets need laws, guidelines and regulations. The integrity, competence and judgment of the Monetary Authority is what is at stake right now. Lee Kwan Yew in his memoirs describes how he set up the capital market in Singapore and dismissed critics who complained of overregulation. ‘In Hong Kong what is not expressly forbidden is permitted in Singapore what is not expressly not permitted is forbidden’.

To take up the assignment, Arjuna Mahendran gave up a lucrative profession in International Banking and his Singapore Citizenship. When he sought much more time, he was persuaded to take more than immediately and his nationality problem was resolved by quickly tracking the approach.

Had he waited till April to take more than, the bond fiasco would have been under the watch of an individual else or there would have been no fiasco at all.

The rocket science of bond trading is explained by a central banker in a paper presented in 2008. The Added Superintendent of Public Debt Department Central Bank of Sri Lanka Mr.C.P.J. Siriwardene explains the growth of the Bond Market place.

ArjunaTreasury bonds are traded through competitive auctions carried out by the Central Bank on a standard basis. Primary dealers who have been involved in the government debt industry considering that 1992 have direct access to the major auctions. According to the present regulatory framework, principal dealers must subscribe the complete sale and single main dealer minimum investment level is set at 10 per cent of the volume of sale to stay away from any possibility of below subscription. The present auction method is on several price tag basis. Given that 2000, all auctions are performed electronically employing an on &#8211 line technique. Prior to each and every auction, the debt authority accesses the prospective investors by means of major dealers to make sure the availability of funds for the full subscriptions. Private placements of Treasury bonds also take place as a contingency to accommodate unexpected borrowings to keep away from market shocks by providing big volumes to the auctions and cancellation of planned bond auctions. Productive 21 bidders are informed on the identical day of the auction and the settlement is two days right after the auction (T+2 technique). Given that the establishment of the principal dealer method, the Central Bank continued its part as a debt manager to create the major dealer system. They incorporate streamlining of dealers (removing nonactive dealers, appointing new dealers, and so on.), introducing necessary regulatory framework for dealers and building up close connection among main dealers and the Central Bank.

Dr. Harsha De Silva the Deputy Minister of Preparing has announced that the committee of three lawyers will examine all issues and trace any irregularities up to 2012. His erudite posturing and justifying of three mediocre lawyers on a voyage of discovery tracing misdeeds up to 2012 amounts to bottom trawling for red herrings.

This writer did not know who Mr. Gamini Pitipana was till finding out that he was to be the chairman of the probe committee. These days Google does much much more than Dunn &amp Bradstreet. So the name was googled. What  appeared was mind goggling. Royal College Class of ’72. Lawyer at Law. Apollo foods Private Ltd. In the absence of any further details from the usually expansive ,Dr.Harsha what should we make of the meagre details? That Mr.Pitipana is discovered in the law and could cook? Is that what is expected of an old Royalist buddy? Cook a report?

Let us get back to the planet of bond trading. A basis point is a hundredth of a percentage point. To make it easier, if a yield moves from 5.5% to 5%, it has moved 50 basis points.

Naturally Prime Minister Ranil Wickremesinghe thinks that the average quantum of gray matter which serves to process data in the brain of the typical Gamarala’ in Sri Lanka is far less than one basis point! But ‘Gamaralas’ are starting to run out of patience. Moving from bad governance to excellent governance the ‘Gamaralas are now experiencing a spell of ugly governance. Certainly really ugly governance at that.

It would be grossly unfair to accuse Governor Mahendran of withholding any data pertaining to his son in law. Sri Lanka is a small nation. The incestuous world of the money market place knew about the two Arjunas. Ranil Wickremesinghe decided to play Sri Krishna and persuaded the elder Arjuna to battle in the harsh world of greed.

Arjuna Mahendran is only a man. Energy is not of a man. Wright Mills the author of ‘Sociological Imagination’ the seminal study of twentieth century society identifies 5 problems we face right now in a cost-free marketplace economy alienation, moral insensibility, threat to the spirit of democracy, disregard to human freedom and most significantly the conflict in between bureaucratic rationality and human purpose.

The issues such the one that is discussed are commonplace.

“Wealth does not center in the particular person of the wealthy. Celebrity is not inherent in any character. To be celebrated, to be wealthy, and to have power demands access to main institutions.” What is nauseating with the governance style of the Prime Minister is that he reminds us of the commandant of Auschwitz who insisted “I never got complaints!”

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