ECONOMYNEXT – Sri Lanka's Central Bank asked a company known for renting mobile toilets and sanitary services to clean up the mess, after its controversial bond auctions under the then governor Arjuna Mahendran.
A leaked audit report showed that Mahendran favoured the sanitary and janitorial services arm of Abans to clean up the image of the bank after the proverbial hit the fan following the contentious 30-year bond sale in 2015.
Mahendran had submitted to the Monetary Board proposals by two journalists (one is named as Mahesh Senanayake and the other is not identified) to outsource media and public relations work on behalf of the Central Bank on July 9, 2015. Based on that, expressions of interest were called from bidders.
Out of two responses to the expressions of interest, only one, made by a subsidiary of Abans, was said to have qualified.
However, the audit report, leaked to the media over the weekend, raised concerns of a serious conflict of interest as two “senior journalists” involved in the Abans proposal were actually those working for two financial institutions. The Abans proposal was made in the name of its janitorial subsidiary — Facility and Engineering Management Services (Private) Limited.
The team leader of the Abans proposal, R. S. M. Senanayake, was actually the head of marketing for the troubled finance company, The Finance, and the other member of the team, Miss A. D. Soysa, was an assistant manager at Softlogic Finance PLC.
“Since the said two finance companies are under the supervision of the Central Bank of Sri Lanka, and the outsourced media personnel have been given the opportunity to work part time, it is deemed a conflict of interest,” the report noted.
The audit report also said that the Bank's legal department raised concerns that sharing information with the outsourced “media personnel” of Abans who were also working full time for finance companies amounted to a violation of the Monetary Law Act.
The report does not say how much was expected to be paid to Abans for the clean up, but the “media” man and woman were expected to report directly to Mahendran who is accused of insider dealing.
Mahendran, who was removed as governor in June last year by President Maithripala Sirisena despite pleadings on his behalf by Prime Minister Ranil Wickremesinghe, has maintained his innocence, but faces fresh investigations.
The 33-page audit report is not clear if the bank actually paid Abans for their services. But, there was a warning about the reputational damage to the Bank by hiring a janitorial firm to project a clean image.
The report suggests that Mahendran mixed business with pleasure, at least judging by his official credit card spending, and notes that any reimbursements for personal expenses had been slow in coming.
It has also focused on procurement procedures and improper accounting and record keeping at the governor's secretariat and has called for a more professional clean up.
(COLOMBO, February 6, 2017)