By Shamindra Ferdinando
Former Chairman of Committee on Public Enterprises (COPE) Prof. Charitha Herath yesterday (13) said that undue delay on the part of a particular parliamentary watchdog committee to call certain state enterprises should be inquired into against the backdrop of some hidden facts and perhaps political interference.
In the case of HDFC Bank, massive loans had been granted to some politicians though the Auditor General’s Department and COPE failed to ascertain the situation, the rebel SLPP lawmaker claimed. The MP found fault with what he called the COPE review committee.
Prof. Herath said so when The Island sought his explanation as to how COPE, during his leadership, conveniently failed to summon HDFC Bank under investigation for suffering Rs 69mn loss by granting a special interest rate to a fixed deposit of the CEB and releasing a loan amounting to Rs 350 mn to Bimputh Finance PLC (BPF) on July 18, 2018.
During COPE proceedings in respect of HDFC Bank late last month, it was revealed that it hadn’t been summoned before the watchdog committee for a period of nine years. According to Director Legislative Services, the bank last appeared before COPE on Nov 04, 2014 in the run-up to the presidential election won by Maithripala Sirisena.
JVP MP Sunil Handunnetti served as Chairman COPE during the Yahapalana administration. After Gotabaya Rajapaksa was elected President in Nov 2019, Prof. Herath succeeded Handunnetti. Following Gotabaya Rajapaksa’s ouster in July 2022, Parliament elected Prof. Ranjith Bandara as the new COPE Chief. Former MP Handunnetti didn’t answer his phone.
Responding to another query, Prof. Herath said there are 214 corporations and nearly 20 other institutions subjected to scrutiny by COPE though the parliamentary watchdog missed HDFC Bank. The MP claimed that there were no other problems in HDFC bank other than the issues at hand.
MP Herath said that now latest statistics were available and therefore COPE could go into HDFC Bank. “I believe special measures should be adopted to investigate hidden cases in some state enterprises. We should implement a special review process to identify cases which required special attention,” Prof. Herath said.
Stalled investigations have revealed that disciplinary action hadn’t been taken in respect of an employee of the HDFC bank in spite of him being found guilty of playing the role of a clandestine agent in the deal with CEB.
COPE, under the leadership of Prof. Ranjith Bandara, has recommended to the Finance Ministry to inquire into the issue at hand and take tangible action against the HDFC employee within a month, according to a statement issued by Janakantha Silva, Director Legislative Services / Director Communication (Acting).
Against the backdrop of COPE declaration that the HDFC Bank faced problem in recovering Rs. 350 mn loan given to BPF, the Central Bank has announced that BPF had been prohibited from operating with effect from Sept. 01, 2023. Prof. Herath, in his response to The Island query, referred to this particular case when he mentioned some politicians being granted massive loans.
Prof. Bandara is on record as having said that the BPF matter would be referred to the Commission to Investigate Allegations of Bribery or Corruption (CIABOC).
According to a Central Bank statement dated Oct 27, 2023, the troubled finance company had been stopped from operating in terms of Section 37 of the Finance Business Act No 42 of 2011. The Director, Resolution and Enforcement Department has assured depositors of BPF that all depositors would be compensated in line with the provisions of the Sri Lanka Deposit Insurance and Liquidity Support Scheme (SLDILSS) Regulation No 02 of 2021.