IN THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF

In the matter of an application under Articles 17 & 126 of the Constitution of the Democratic Socialist Republic of Sri Lanka.

Ven. Thiniyawala Palitha Thero Nalandaramaya, Nalandarama Road, Nugegoda.

Petitioner

-Vs- SC FR Application Number: SC/Ref/464/2016 1. Hon. Chairman of Committee on Public Enterprises (COPE)

2. Hon. Rauf Hakeem Member of Committee on Public Enterprises (COPE)

3. Hon. Anura Priyadharshana Yapa Member of Committee on Public Enterprises (COPE)

4. Hon. Member of Committee on Public Enterprises (COPE)

5. Hon. Lakshman Seneviratne Member of Committee on Public Enterprises (COPE)

6. Hon. Member of Committee on Public Enterprises (COPE)

7. Hon. Member of Committee on Public Enterprises (COPE)

8. Hon. Wasantha Aluvihare Member of Committee on Public Enterprises (COPE)

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9. Hon. Lasantha Alagiyawanne Member of Committee on Public Enterprises (COPE)

10. Hon. Dr. Member of Committee on Public Enterprises (COPE)

11. Hon. Ajith P. Perera Member of Committee on Public Enterprises (COPE)

12. Hon. Member of Committee on Public Enterprises (COPE)

13. Hon. Ashok Abeysinghe Member of Committee on Public Enterprises (COPE)

14. Hon. Anura Dissanayake Member of Committee on Public Enterprises (COPE)

15. Hon. Chandrasiri Gajadheera Member of Committee on Public Enterprises (COPE)

16. Hon. Member of Committee on Public Enterprises (COPE)

17. Hon. Member of Committee on Public Enterprises (COPE)

18. Hon. Member of Committee on Public Enterprises (COPE)

19. Hon. Mewai S. Senadhiraja Member of Committee on Public Enterprises (COPE)

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20. Hon. Abdullah Mahruf Member of Committee on Public Enterprises (COPE)

21. Hon. S. Sritharan Member of Committee on Public Enterprises (COPE)

22. Hon. M.A Sumanthiran Member of Committee on Public Enterprises (COPE)

23. Hon. Member of Committee on Public Enterprises (COPE)

24. Hon. (Dr.) Nalinda Jayathissa Member of Committee on Public Enterprises (COPE)

25. Hon. Member of Committee on Public Enterprises (COPE)

26. Hon. Gnanamuttu Srinesan Member of Committee on Public Enterprises (COPE)

In their capacity as members of COPE, the 1st to 26th Respondents are all based at;

Secretary - COPE COPE Secretariat Parliament, Sri Jaywardenepura, Kotte.

27. Monetary Board of the Central Bank of Sri Lanka No. 30 Janadhipathi Mawatha, 01.

28. Dr. Indrajith Coomaraswamy Governor of the Central Bank of Sri Lanka No. 30 Janadhipathi Mawatha, Colombo 01.

29. P Samarasiri in his capacity as Chairman of the Treasury Bond Tender Committee of the Central Bank of Sri Lanka No. 30 Janadhipathi Mawatha, Colombo 01.

30. Superintendent and Registrar of Public Debt Department of the Central Bank of Sri Lanka No. 30 Janadhipathi Mawatha, Colombo 01.

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31. The Auditor General of Sri Lanka Auditor General’s Department 306/72, Polduwa Road Battaramulla.

32. Hon. Attorney General Attorney General’s Department Hulftsdorp, Colombo 12.

Respondents

On this the 23rd day of December 2016,

TO: HIS LORDSHIPS THE CHIEF JUSTICE AND THE OTHER HONOURABLE JUDGES OF THE SUPREME COURT OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA;

The Petition of the Petitioner above named appearing by James Henry Paul Ratnayeke and Nilanthi Sonia Anne Pieris Attorneys-at-Law of the Honourable Supreme Court of the Democratic Socialist Republic of Sri Lanka, carrying on business in Partnership under the name, style and firm of PAUL RATNAYEKE ASSOCIATES and their assistants Mahesha Alahakoon, Therese Melanie De Alwis, Liyana Gayathri Narmada Mendis, Tharini Prakarshi Dias Senerath Gunasekera, Hashini Madushika Epa, Apsara Witharanage, Achini Shanika Kaluarachchi, Warnakulasuriya Ishara Swini Peiris, Mayadunnage Dona Bimali Jithma Bandara Mayadunna and Hettige Don Udara Oshadi Gunasekara his Registered Attorneys-at-Law state as follows:-

1. The Petitioner is a citizen of Sri Lanka and is filing this application on the basis that for the reasons more- fully set out below;

a. The Petitioner’s fundamental rights under Article 12(1) of the Constitution of Sri Lanka have been violated, and/or;

b. That the fundamental rights guaranteed to the general public of Sri Lanka under Article 12(1) of the Constitution have been violated.

2. The Petitioner pleads that he is filing this application in the public interest, and in the performance of his Constitutional duties under inter alia Articles 28(a) and/or 28(d) and/or 28(f) of the Constitution of Sri Lanka.

3. The Petitioner pleads that the scope of this application concerns inter alia various purported findings and/or statements made in a report prepared by the Committee on Public Enterprises [“COPE”] as regards certain bond issues by the Central Bank of Sri Lanka in the year of 2015 and 2016.

4. The Petitioner states the following as regards himself;

a. The Petitioner has been attached to the Nalandaramaya temple since 1966;

b. He is also the Vice Secretary of the Sri Lanka Mahabodhi Society;

c. He is also the Regional Head of Mahabodhi Society Chennai India,

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d. He is also the Viharadhipathi of Beruwala Sapugoda Temple;

e. He is also the Nalandaramapathi of Nalandaramaya, Nugegoda;

f. He is also a Director of Lanka Hospitals. 5. The 1st to 26th Respondents are members of COPE that have been tasked by to investigate and report on matters pertaining to certain Treasury bond auctions by the Central Bank of Sri Lanka [“CBSL” or “Central Bank”] in February 2015 and March 2016. For this purpose, the 1st Respondent has been nominated / appointed as the Chairman of COPE, whilst the 2nd – 25th Respondents have been nominated / appointed as members of COPE.

6. The 27th Respondent is the Monetary Board of the Central Bank. The 2nd Respondent is a body corporate and has the legal capacity to sue and be sued in its corporate name. The 2nd Respondent is the governing body of the Central Bank, and is responsible for inter alia the management and administration of the CBSL.

7. The 28th 29th and 30th Respondents are the Governor of the CBSL, Chairman of the Tender Committee of the CBSL and Superintendent of the Public Debt Department of the CBSL.

8. The 31st Respondent is the Auditor General of Sri Lanka that has submitted a report dated 29 June 2016 to the members of COPE.

9. The 32nd Respondent is the Hon. Attorney General and is made a party to this application in terms of law and established procedure.

10. At the outset the Petitioner respectfully reserves his right and/or seeks the permission of Your Lordships Court to;

a. add further Respondents / parties to this application in the event the necessity arises, and/or;

b. tender any document that has not already been tendered with this application, but which is available and/or accessible to the Petitioner, and which Your Lordships Court deem relevant and requisite for the purpose of effectively adjudicating this application.

11. The Petitioner respectfully pleads the following;

a. Consequent to being elected in September 2015, Parliament of Sri Lanka nominated/appointed the members of COPE to conduct an investigation into certain Central Bank auctions of Treasury Bonds which occurred in February 2015 and March 2016

b. As at the date of presentation of their final report, the members of COPE were the 1st to 26th Respondents;

c. The members of COPE have submitted their final report to Parliament on or about 28 October 2016 [“COPE report”];

d. With the said COPE report 25 annexures have also been submitted;

e. The said COPE report maintains that;

i. the 1st 2nd 3rd 4th 5th 9th 14th 15th 16th 17th 18th 21st 22nd 24th and 26th Respondents agreed to the said COPE report in general without the footnotes;

ii. the 6th 7th 8th 10th 11th 13th 20th 23rd and 25th Respondents agreed to the said COPE report with the footnotes;

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iii. all members of the Committee (i.e. the 1st to 26th Respondents) unanimously agreed to the recommendations given at the end of the report.

The Petitioner marks and annexes hereto as ‘P1(a)’ ‘P1(b)’ and ‘P1(c)’ respectively, the copies of the Sinhala, Tamil and English language versions of the said COPE report and pleads the same as part and parcel hereof.

The Petitioner marks and annexes hereto as ‘P2(a) to P2(y)’ respectively the copies of the said 25 annexures to the said COPE report and pleads the same as part and parcel hereof. By way of example the Petitioner states that annexure 1 to the COPE report has been marked hereto as P2(a), whilst annexure 2 has been marked as P2(b) and so forth.

12. The Petitioner expressly pleads that notwithstanding that the said COPE report was presented to Parliament on or about 28 October 2016, the same remained inaccessible to the general public and the Petitioner for some time. The Petitioner pleads that the said COPE report only became accessible to the Petitioner (and the Petitioner verily believes, to the majority of the general public) on or about 24 November 2016.

13. In the circumstances afore-said, the Petitioner pleads that the Petitioner could not file this application sooner as the COPE report was inaccessible to him, and he was not aware of the contents of the same, until 24 November 2016.

14. The Petitioner pleads further that in any event the continuous reliance and/or circulation and/or actions of the said COPE report as it presently stands amounts to a continuing infringement of the Petitioner’s fundamental rights guaranteed under Article 12(1) of the Constitution of Sri Lanka, and also amounts to a cause which enables the Petitioner to prefer this application in the public interest.

15. The Petitioner pleads that as members of COPE - tasked by Parliament to investigate and report on certain specific matters - the 1st to 26th Respondent have a duty and/or an obligation to the Petitioner, to the country and to the general public, to investigate into such matters fairly and impartially, and to report on such matters truthfully, without misleading the public, without any misrepresentation, without any glaring contradiction and without ulterior/political objectives and/or motives.

16. The Petitioner pleads that the 1st to 26th Respondents have an inherent duty and an obligation to base their investigation and final recommendations on the proper premise, and on matters of fact.

17. The Petitioner states that the said COPE report which has been submitted to Parliament (and consequently made accessible to the Petitioner) is for inter alia the reasons stated below littered with contradictions and/or misrepresentations, and is not based on a proper and/or truthful premise.

18. The Petitioner pleads that for the purpose of the averments pleaded in this application, the Petitioner shall refer to the English version of the COPE report marked hereto as ‘P1(c)’.

19. The Petitioner pleads that through the said COPE report [P1(c)], the Petitioner and the general public have been misinformed and/or misled.

20. The Petitioner pleads that through the said COPE report and through other means and reliable sources, the Petitioner has come to verily believe the following as regards the past and existing procedure of the Central Bank as regards the issue of Treasury Bonds;

a. Prior to the year of 1997, there were two main methods by which the Central Bank raised funds for the government of Sri Lanka. Those were by issuing instruments called ‘Treasury Bills’ (which is a short term debt instrument) and by issuing instruments called ‘Rupee loans’ (which is a longer term debt instrument);

6 b. In 1997 the Central Bank and/or the 27th Respondent introduced a long term debt instrument called the ‘Treasury Bond’ which had a market determined yield. It was decided that the Treasury Bond ‘be issued on auction basis through Primary Dealers and are transferable by endorsement and delivery. These instruments [Treasury Bonds] will be issued in addition to the presently available Treasury Bills and Rupee Loans (Registered Stocks)’ [Emphasis Added];

The Petitioner marks and annexes hereto as ‘P3’ a copy of the Board Paper of the 27th Respondent bearing No. MB/PD/05/18/97 and pleads the same as part and parcel hereof.

The Petitioner marks and annexes hereto as ‘P3(a)’ a copy of memorandum / communication dated 14 February 1997 sent by the Public Debt Department of the Central Bank to the 27th Respondent, and pleads the same as part and parcel hereof.

The Petitioner marks and annexes hereto as ‘P3(b)’ a copy of document titled ‘Central Bank of Sri Lanka, Public Debt Department, Procedures for Primary Issue, Transfer and Collection of Interest and Maturity Proceeds, Issue of Duplicates, Renewal, Consolidation and Sub-division of Treasury Bonds’ and pleads the same as part and parcel hereof. c. By the documents P3 and P3(a) it was also inter alia decided that the Superintendent of the Employees’ Provident Fund [“EPF”] be also permitted to bid at such auctions to help ensure that the issue is fully subscribed (i.e. that the Central Bank manages to reach the subscription level it requires); d. The Petitioner respectfully pleads that in view of the matters afore-said, from the year of 1997, the proper and/or lawful procedure for the issue of Treasury Bonds was through the participation of Primary Dealers and the EPF at auctions held by the Central Bank; e. Consequent to which the Petitioner has come to know and understand that in the year of 2008, the 27th Respondent has by Board Paper bearing No. MB/PD/01/26/2008 dated 7.1.2008 approved ‘direct placements of Treasury bonds and Rupee loans in respect of captive investors such as EPF, NSB and ETF during January-April 2008 [Emphasis Added]’; f. In the said Board Paper bearing No. MB/PD/01/26/2008 the following has also been stated, “In 2008, the government’s borrowing requirement from the domestic market through Treasury bonds and Rupee loans is excessive and not be able to raise through the normal auction process at a reasonable yield rates. Therefore it would be advisable to raise funds available with captive type investors through direct placements”.

The Petitioner marks and annexes hereto as ‘P4’ a copy of the said Board Paper bearing No. MB/PD/01/26/2008 dated 7.1.2008 and pleads the same as part and parcel hereof. g. The Petitioner pleads that what is important to note about the 27th Respondent’s said Board Paper P4, is that the Central Bank only made direct placement [also known as ‘private placement’] available to Captive Sources/ Investors (i.e. such as the EPF, NSB and ETF) for the period January to April 2008. By the said Board Paper [P4] the 27th Respondent has also expressly and/or impliedly acknowledged that the normal process in respect of the issue of Treasury Bonds is the ‘auction process’; h. The Petitioner pleads that direct/private placement is a methodology employed by the Central Bank where an opportunity is afforded, to purchase Treasury Bonds on the weighted average yield declared by the Central Bank/ Public Debt Department of the CBSL [‘PDD’] . The Petitioner pleads that to the best of his knowledge, unlike auctions, direct/private placement and the weighted average yield which is declared by the Central Bank is not strictly determined by market forces; i. The Petitioner pleads that he verily believes that in accordance with the existing proper procedure of CBSL direct/private placement of Treasury Bonds should only be afforded after a clear decision is taken and a Board Paper is tabled and passed by the 27th Respondent. Otherwise and as hereinbefore

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pleaded, the proper and normal procedure (since 1997) should always be to hold auctions for the purchase of Treasury Bonds; j. The Petitioner verily believes that ordinarily in auctions, the average weighted yield and/or coupon rate and/or interest rate of the relevant Treasury Bonds are determined by market forces. The Petitioner has come to understand that Primary Dealers (i.e. Non-Captive Sources) should only be permitted to purchase Treasury Bonds viz direct/private placement in the event that a Board Paper of the 27th Respondent is passed and an unambiguous decision is taken by the CBSL to afford Primary Dealers an opportunity to purchase Treasury Bonds viz direct/private placement; k. In any event and after having gone through the said COPE report, the Petitioner has come to know that by Board Paper bearing No. MB/PD/11/16/2008 dated 02.05.2008 the 27th Respondent has seemingly and/or essentially approved the extension of direct/private placement to ‘captive type large investors such as EPF, NSB and ETF during May to December 2008’. [c/f: footnote 2 at page 15 of COPE report [P1(c)] [Emphasis Added]; l. The Petitioner has also come to know that by Board Paper of the 27th Respondent bearing No. MB/PD/25/20/2008 dated 07.10.2008, it has been inter alia recommended to approve the issue of Treasury Bonds to ‘EPF and other captive sources at a interest rate 5 basis points above the secondary market rates through private placements’;

The Petitioner marks and annexes hereto as ‘P5’ a copy of the said Board Paper dated 07.10.2008 bearing No. MB/PD/25/20/2008 and pleads the same as part and parcel hereof, m. Through inter alia footnote 2 at page 15 of the said COPE report [P1(c)] the Petitioner has also come to know that a ‘letter faxed by the Director of the PDD to the Committee held on 24th October 2016 has shown that approval of the monetary board for the interest rate paid to issue treasury bonds for the captive sources as mentioned above has been given only for the period of May to December 2008. The letter has further shown that the time has not extended thereafter’ [Emphasis Added]; n. The Petitioner pleads that what is important to note about the said Board Papers bearing Nos. MB/PD/01/26/2008 dated 7.1.2008 [P4], MB/PD/11/16/2008 dated 02.05.2008 [mentioned in footnote 2 of the the said COPE report] and MB/PD/25/20/2008 dated 07.10.2008 [P5] is that the issue of Treasury Bonds viz direct/private placement to the EPF and/or ‘other Captive Sources’ have only been approved by the CBSL for the period January 2008 to April 2008, and thereafter from May 2008 to December 2008; o. The Petitioner pleads that to the best of his knowledge and belief, from January 2009 no Board Paper has been tabled and/or passed by the 27th Respondent which permits the issue of Treasury Bonds viz direct/private placement to Captive and/or Non- Captive Sources; p. The Petitioner expressly pleads that the said COPE report [P1(c)] does not disclose of any other Board Paper of the 27th Respondent which has permitted Treasury Bonds to be issued viz direct/private placement to Captive and/or Non-Captive sources; q. The Petitioner pleads that he verily believes that in terms of correct and/or proper and/or lawful procedure, the 27th Respondent is bound to table a Board Paper and pass the same in the event that the CBSL and/or the 27th Respondent intends on issuing Treasury Bonds to Captive and/or Non- Captive sources viz direct/private placement. The Petitioner respectfully pleads that the documents annexed hereto as P4 and P5, and the Board Paper referred to above bearing No. MB/PD/11/16/2008 dated 02.05.2008, expressly and/or impliedly, corroborates the matters afore-said; r. In the circumstances afore-said, the Petitioner states that he has come to understand and verily believes that the issue of any Treasury Bonds viz direct/private placement from the period January 2009 has not been officially and/or properly and/or lawfully sanctioned by the 27th Respondent, and is

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contrary to the rules and/or proper procedures of the Central Bank, and is contrary to law, and is therefore unauthorised and ex facie unlawful.

21. The Petitioner pleads that in the event that the issue of Treasury Bonds from January 2009 to Captive and/or Non-Captive sources viz direct/private placement has not been properly and/or officially and/or lawfully authorised and/or sanctioned by the 27th Respondent by way of an official Board Paper of the 27th Respondent (as was done in 2008, c/f: P4 and P5 and Board Paper bearing No. MB/PD/11/16/2008 dated 02.05.2008), any issue of Treasury Bonds by way of direct/private placement from January 2009 is wrongful and/or unauthorised and/or unlawful and/or contrary to proper procedures of the CBSL.

22. In the circumstances afore-said, the Petitioner respectfully pleads that the said COPE report (i.e. the members being responsible to Parliament and the General Public of Sri Lanka, including the Petitioner) ought not to be permitted in any manner whatsoever, to expressly and/or impliedly base its findings and/or make statements and/or rely on and/or refer to and/or to draw analogies with and/or to use as a premise or yardstick such wrongful and/or unlawful and/or unauthorised and/or irregular actions of the CBSL.

23. The Petitioner pleads further that in any event, and in addition to the matters afore-said, given the nature and scope of their mandate, all members of the COPE committee (i.e. the 1st to 26th Respondents) were inter alia ethically and morally duty bound to investigate, ascertain and unambiguously report to Parliament and the general public whether the CBSL was correctly, properly and/or lawfully issuing Treasury Bonds to Captive and/or Non- Captive sources viz the direct/private placement method from the month of January 2009 (i.e. when the time periods prescribed in the Board Papers marked and annexed hereto as ‘P4’ and ‘P5’ and the Board Paper referred to above bearing No. MB/PD/11/16/2008 dated 02.05.2008 lapsed).

24. The Petitioner pleads that in the event that the CBSL was not properly and/or officially and/or lawfully issuing Treasury Bonds viz the direct/private placement from the month of January 2009, the proper procedure that ought to have been followed from January 2009 was the Central Bank Treasury bond auction process.

25. The Petitioner pleads that instead of reporting the above to Parliament and the general public, the said COPE report is littered with inconsistencies and/or contradictions and/or misrepresentations, which the Petitioner pleads makes certain findings and/or statements in the COPE report unsafe, and/or prejudiced and/or biased, and a violation / infringement of the Petitioner’s fundamental rights guaranteed under Article 12(1) of the Constitution of Sri Lanka.

26. In addition to the matters that may be urged at the hearing stage of this application, the Petitioner pleads the following as regards the COPE report.

Paragraph 4.1.1 and 4.1.2 of the COPE report (at page 15 of P1(c))

27. By the said COPE report [P1(c)] the following has been reported and/or stated at paragraph 4.1.1 and 4.1.2 (page 15) of the same;

“4.1.1 The report of the Auditor General further notes that through monetary Board Paper No MB/PD/1/26/2008 (07.01.2008) (Annexure 7), it has been decided in the year 2008 to meet the funding requirements through the direct method and subsequently through Monetary Board Paper No. MB/PD/25/20/2008 (07.10.2008) (Annexure 07) it has been recommended to establish market liquidity by issuing bonds with interest rates 0.05 percent higher than the prevailing interest rates in the secondary marker to the Employees’ Provident Fund.

4.1.2 The Committee queried the Central Bank officials as to how the term ‘Other Captive sources’ came to be included in the decision of the Monetary Board Paper No. MB/PD/25/20/2008 (07.10.2008) and it was pointed out that it was decided that not only the Employees’ Provident Fund but other sources (Other Captive Sources) which could be utilised to meet the finding requirements of the country during the relevant period too should be taken into account.”

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28. The Petitioner pleads that on a plain reading of paragraph 4.1.1 (without the footnotes) it has been inter alia suggested and/or implied that the 27th Respondent has decided in the year of 2008 to meet the funding requirements by way of the ‘direct method’.

29. In terms of the COPE report the said suggestion (without the footnotes) has been agreed to by the 1st 2nd 3rd 4th 5th 9th 14th 15th 16th 17th 18th 21st 22nd 24th and 26th Respondents.

30. The Petitioner pleads that when reading the said paragraph 4.1.1 with footnotes 1 and 2, it is clear that it has been suggested (in contradiction to the above) that; a. in terms of Board Paper bearing No. MB/PD/01/26/2008 [P4] approval has been sought from the 27th Respondent for the issue of Treasury Bonds by way of direct placement for a period of 3 months (from January 2008 to April 2008) to Captive investors such as the EPF, NSB and ETF;

b. in terms of Board Paper bearing No. MB/PD/11/16/2008 approval has been sought from the 27th Respondent for the issue of Treasury Bonds by way of direct placement in respect of captive type large investors such as EPF, NSB and ETF during the period May to December 2008.

31. The Petitioner pleads that in terms of the COPE report the 6th 7th 8th 10th 11th 13th 20th 23rd and 25th Respondents have only agreed to the content of paragraph 4.1.1 with footnotes 1 and 2.

32. The Petitioner therefore pleads that there is therefore an ex facie contradiction and/or inconsistency and/or misrepresentative and/or distorted position maintained in the COPE report.

33. The Petitioner pleads that the afore-said paragraphs 4.1.1 and/or 4.1.2 and/or the entirety of the COPE report does not indicate with any acceptable degree of certainty, whether the CBSL and/or the 27th Respondent has properly and/or lawfully and/or in terms of proper Central Bank procedure authorised and/or sanctioned the use of direct/private placement in the issue of Treasury Bonds from the month of January 2009 to Captive and/or Non-Captive sources.

Paragraph 4.2 of the COPE report (at pages 16 and 17 of P1(c))

34. The header of paragraph 4.2 reads in the following manner;

“The use of the Operations Manual of Public Debt Department of the Central Bank in respect of the implementation of the policy decisions for the issue of bonds by the Central Bank of Sri Lanka”.

35. The main body of paragraph 4.2 states inter alia the following;

“The officials of the Central Bank of Sri Lanka were questioned by the Committee about the manner in which the Direct Placement method and the Auction method in issuing bonds given in B(i) on page 8 of this manual and it was pointed out by the officials of the Central Bank that “as much as possible through auctions” therein decided the volume of bonds to be issued through the auction method and that it was decided based on cost and risk. Further clarifying the point, the officials of the Central Bank mentioned that cost and risk were determined as per the guideline mentioned in Medium Term Debt Management of the Central Bank. It was further pointed out by the officials of the Central Bank that despite the mentioning of:

a. Auctions b. Private Placements c. Rupee Loans

as methods of financing on page 3 of the Operations Manual of Public Debt Department, there was no order specifying the adoption of auction method firstly, private placements secondly and rupee loans thirdly to be followed.

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Further, citing “The front office of the PDD is mainly responsible for mobilizing required funds for the government at the lowest possible cost with a reasonable degree of risk through the implementation of domestic borrowing programme approved by the Monetary Board”, it was pointed out by those officials that the fund requirement of the government had to be financed at the minimum cost. It was also pointed out that the fund requirement had to be financed without causing any disadvantage to the government and the process of the Central Bank.”

36. The Petitioner states that on a plain reading of paragraph 4.2 (without the footnotes) it inter alia appears that the following has been expressly and/or indirectly stated and/or suggested;

a. That the Operations Manual of the Public Debt Department of the Central Bank is followed and/or applied in deciding whether to adopt the direct method or the auction method in issuing bonds by the Central Bank;

b. When being questioned about the manner in which the direct placement method and auction method was used in issuing Treasury Bonds, the officials of the Central Bank pointed out that as per B(i) page 8 of the said Operations Manual, Treasury Bonds were issued “as much as possible through auctions”, and the volume issued through auctions was decided by cost and risk factors;

c. The officials of the Central Bank have also stated that though page 3 of the said Operations Manual states the methods of financing as (a) Auctions (b) Private Placements, and (c) Rupee Loans, there was no order specifying the adoption of auction method first, private placements second, and Rupee loans third;

d. Furthermore the officials of the Central Bank have cited a passage [i.e. ‘The front office of the PDD is mainly responsible for mobilizing required funds for the government at the lowest possible cost with a reasonable degree of risk through implementation of domestic borrowing programme approved by the Monetary Board’] and have pointed out that the fund requirement of the government has to be financed at the minimum cost, and without causing any disadvantage to the government and the process of the Central Bank.

37. In terms of the COPE report the said suggestions (without the footnotes) have been agreed to by the 1st 2nd 3rd 4th 5th 9th 14th 15th 16th 17th 18th 21st 22nd 24th and 26th Respondents.

38. The Petitioner respectfully pleads that on a appropriate reading of the suggestions more-fully stated above [i.e. paragraph 36(a) (b) (c) (d) hereof] it is manifest that the said paragraph 4.2 of the COPE report (without the footnotes) by itself and/or read with the totality of the COPE report (without the footnotes) has implicitly suggested that;

a. The officials of the Central Bank followed the Operations Manual of the Public Debt Department in deciding whether and in what volume to issue Treasury Bonds by way of the auction method and the direct/private placement method;

b. The words ‘as much as possible through auctions’ found in B(i) page 8 of the said Operations Manual did not mean that most of the Treasury Bonds had to be issued viz the auction system, but instead cost and risk factors had to be taken into account in determining what was meant by ‘as much as possible through auctions’, and after having taken such factors into account it was open for the Public Debt Department and/or the relevant officials/department of the Central Bank to issue less Treasury Bonds viz the auction method, and more Treasury Bonds viz the direct/private placement method;

c. More Treasury Bonds could be issued viz direct/private placement (as opposed to the auction method) notwithstanding that Page 3 of the said Operations Manual stated the methods of financing as (a) Auctions (b) Private Placements (c) Rupee Loans;

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d. More Treasury Bonds could be issued viz direct/private placement (as opposed to the auction method) in view of the fact that the fund requirement of the government had to be financed by the Central Bank with ‘minimum cost’ ‘and without causing any disadvantage to the government and the process of the Central Bank’.

39. The Petitioner pleads that when reading the said paragraph 4.2 with footnotes 4, 5 and 6 it is clear that it has been suggested (in contradiction to the above) that;

a. In terms of page 8 under B(1) of the Operations Manual the “Front Office has to make arrangements to meet the financing needs as much as possible through auctions. The balance fund requirement of the government as indicated in the approved Borrowing program may be arranged through private placements with PDs”;

b. There was no evidence to suggest that approval of the 27th Respondent had been received for direct/private placements with Primary Dealers;

c. The methodology adopted by the 27th Respondent is to obtain the major portion of the requirement of funds through the auction system, and to obtain the balance by way of private placement. This is in line with the said Operations Manual;

d. Though the report of the Auditor General which had been submitted to COPE seems to suggest that the correct and/or accepted system was the direct/private placement system, Monetary Board Papers MB/PD/01/26/2008 and MB/PD/11/16/2008 seem to suggest otherwise;

e. There is no document / evidence to suggest that permission has been granted to issue Treasury Bonds viz direct/private placements to Primary Dealers;

f. Therefore an examination had to be carried out to ascertain whether an opportunity had been provided (or permission granted) to issue Treasury Bonds to Primary Dealers viz the direct/private placement method during the period 2008 to 2015;

40. The Petitioner pleads that in terms of the COPE report the 6th 7th 8th 10th 11th 13th 20th 23rd and 25th Respondents have only agreed to the content of paragraph 4.2 with footnotes 4, 5 and 6.

41. The Petitioner therefore pleads that there is therefore an ex facie contradiction and/or inconsistency and/or misrepresentative and/or distorted position maintained in the COPE report.

42. The Petitioner pleads that the afore-said paragraphs 4.2 and/or the entirety of the COPE report does not indicate with any acceptable degree of certainty, whether the CBSL and/or the 27th Respondent has properly and/or lawfully and/or in terms of proper Central Bank procedure authorised and/or sanctioned the use of direct/private placement in the issue of Treasury Bonds to Non-Captive sources during the period 2008 to 2015.

43. The Petitioner pleads that paragraph 4.2 of the COPE report has not satisfactorily met the aspirations of the general public (including the Petitioner), as the said paragraph (read in its entirety) does not even remotely (and unambiguously) inform the reader whether the Central Bank had properly and/or lawfully authorised the issue of Treasury Bonds to Non-Captive Sources (Primary Dealers) viz the direct/private placement method during the period 2008 to 2015.

Paragraph 6.1 of the COPE report (at pages 31 and 32 of P1(c))

44. The header of paragraph 6.1 reads in the following manner; “Estimated loss if the bond issue had been limited to Rs. 1 billion”.

45. At page 31 and 32 the following has been stated at paragraph 6.1 (without the footnotes);

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“Rs. 1, 403 million could have been obtained had bonds been issued only up to a bid value of Rs. 104. 5073 per bond If the bond issue of 27th February 2015 had been limited to Rs. 01 billion as expected, as per the amount of bids placed covering the aforesaid value.

For not limiting the issue of bonds to the said value, there was an estimated loss of Rs. 889, 358, 050/- for the government.”

46. On a plain reading of paragraph 6.1 (without the footnotes) it has been suggested and/or implied that as the bond issue of 27 February 2015 had not been limited to Rs. 01 billion, the government and/or country had suffered an estimated loss of Rs. 889, 358, 050/-. 47. In terms of the COPE report the said suggestion (without the footnotes) has been agreed to by the 1st 2nd 3rd 4th 5th 9th 14th 15th 16th 17th 18th 21st 22nd 24th and 26th Respondents.

48. The Petitioner pleads that when reading the said paragraph 6.1 with footnotes 19, 20 and 21, it is clear that it has been inter alia suggested and/or implied (in contradiction to the above) that;

a. The supposed loss of Rs. 889, 358, 050/- had been calculated within the context and/or within an environment of supposing that the direct/private placement method is the correct procedure;

b. However the documents reveal that after the ‘Treasury Bond’ instrument was introduced in 1997, the auction process was considered the ‘rule’ and the direct/private placements method was considered the ‘exception’;

c. The direct/private placement method should be used viz a special Board Paper of the 27th Respondent i.e. as was done in 2008. However after 2008 there was no evidence to suggest that the 27th Respondent had granted approval for the use of the direct/private placement method;

d. Even in the 27th Respondent’s Board Papers of 2008 [i.e. that permitted the use of direct/private placement] it is revealed that;

i. The direct/private placement method was only used in respect of government funds [i.e. Captive sources];

ii. Conditions have been included in such Board Papers to protect such funds;

iii. There were identified implications of using the direct/private placement method.

e. Direct/private placement is an ‘exception’ that can be used with the approval of the 27th Respondent during an unstable situation in the country or when it is essential;

f. It is not appropriate to use the direct/private placement method as the basis to calculate the loss.

49. The Petitioner pleads that in terms of the COPE report the 6th 7th 8th 10th 11th 13th 20th 23rd and 25th Respondents have only agreed to the content of paragraph 6.1 with footnotes 19, 20 and 21.

50. The Petitioner therefore pleads that there is therefore an ex facie contradiction and/or inconsistency and/or misrepresentative and/or distorted position maintained in the COPE report.

51. The Petitioner pleads that having read paragraph 6.1 in its entirety, it is manifest that the reader is inter alia made unaware as to whether;

a. The supposed estimated loss of Rs. 889, 358, 050/- to the government / country, is a reliable figure;

b. The supposed estimated loss of Rs. 889, 358, 050/- has been calculated on the basis and/or within the context that the direct/private placement method is correct process.

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52. The Petitioner pleads that the afore-said paragraph 6.1 and/or the entirety of the COPE report does not indicate with any acceptable degree of certainty whether the stated estimate loss of Rs. 889, 358, 050/- has been calculated viz the use of a reliable and/or proper method.

Paragraph 6.2 of the COPE report (at page 34 of P1(c))

53. The header of paragraph 6.2 reads in the following manner;

“Loss incurred as a result of exceeding Rs. 2. 608 billion recommended by the Public Debt Management Committee of the Central Bank of Sri Lanka” 54. The main body of paragraph 6.2 states the following (without the footnotes);

“There was a possibility to issue bonds worth Rs. 2, 608 million (so that bid value of a bond would be Rs. 102.20720) as recommended in the option sheet furnished to the Tender Board by the Public Debt Department. Issuing bonds up to the value of Rs. 10.058 billion instead of doing so, has an estimated loss of Rs. 688, 538, 600 as calculated in the table below:”

55. On a plain reading of paragraph 6.2 (without the footnotes) it has been suggested and/or implied that as the bond issue of 27 February 2015 had not been limited to Rs. 2.608 billion as suggested in the option sheet furnished to the Tender Board by the PDD, the government and/or country had suffered an estimated loss of Rs. 688, 538, 600/-.

56. In terms of the COPE report the said suggestion (without the footnotes) has been agreed to by the 1st 2nd 3rd 4th 5th 9th 14th 15th 16th 17th 18th 21st 22nd 24th and 26th Respondents.

57. The Petitioner pleads that when reading the said paragraph 6.2 with footnote 22, it is clear that it has been inter alia suggested and/or implied (in contradiction to the above) that the calculation of the estimated loss of Rs. 688, 538, 600/- was not only hypothetical, but also based on the matters referred to in footnotes 20 and 21 [Some of the suggestions contained in footnotes 20 and 21 have been more-fully stated herein and above at paragraphs 48(a) to 48(f)).

58. The Petitioner pleads that in terms of the COPE report the 6th 7th 8th 10th 11th 13th 20th 23rd and 25th Respondents have only agreed to the content of paragraph 6.2 with footnote 22.

59. The Petitioner therefore pleads that there is therefore an ex facie contradiction and/or inconsistency and/or misrepresentative and/or distorted position maintained in the COPE report.

60. The Petitioner pleads that having read paragraph 6.2 in its entirety, it is manifest that the reader is inter alia made unaware as to whether;

c. The supposed estimated loss of Rs. 688, 538, 600/- to the government / country is a reliable figure;

d. The supposed estimated loss of Rs. 688, 538, 600/- has been calculated on the basis and/or within the context that the direct/private placement method is correct process.

61. The Petitioner pleads that the afore-said paragraph 6.2 and/or the entirety of the COPE report does not indicate with any acceptable degree of certainty whether the stated estimate loss of Rs. 688, 538, 600/- has been calculated viz the use of a reliable and/or proper method.

62. The Petitioner pleads that the matters more-fully stated above [i.e. from paragraphs 27 to 61 hereof] are only some of the obvious inconsistencies and/or contradictions and/or misrepresentations contained in the COPE report which have violated the fundamental rights of the Petitioner guaranteed under Article 12(1) of the Constitution. The Petitioner respectfully reserves his right to bring all and/or any contradictions contained in the COPE report to the attention of Court at the hearing stage of this application.

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63. The Petitioner pleads that in light of the substantial media coverage given to the Treasury Bond auctions/transactions of 27 February 2015 and 29 March 2016, the matters investigated by COPE have become a matter of significant importance.

64. The Petitioner and the general public of Sri Lanka are entitled to receive a fair, impartial and truthful investigation into such matters, which is free from bias and ulterior/political objectives.

65. The Petitioner states that by the glaring contradictions and/or inconsistencies and/or misrepresentations contained in the said COPE report, the members of the COPE committee [i.e. the 1st to 26th Respondents] have not fulfilled their duties and obligations to the Petitioner [and other members of the general public of Sri Lanka].

66. The Petitioner reiterates that from the matters contained in the COPE report itself, and in view of the matters pleaded above, from the year of January 2009 the Central Bank of Sri Lanka had not adhered to proper and/or correct and/or lawful procedure in issuing Treasury Bonds viz direct/private placement. In other words from the year of 2009, the Central Bank has wrongfully and/or improperly and/or and unlawfully issued Treasury Bonds viz the direct/private placement method without obtaining the express authorisation and/or sanction by way of a Board Paper from the 27th Respondent.

67. In view of the above, the Petitioner pleads that the proper process to be followed in the issue of Treasury Bonds from the year of 1997 was the auction process, save and except instances when the 27th Respondent gave its express authorisation viz a Board Paper to issue Treasury Bonds through the direct/private placement method.

68. The Petitioner pleads that in light of the afore-said, as at 27 February 2015 and 29 March 2016, the proper and/or correct and/or lawful procedure in the issue of Treasury Bonds that ought to have been followed by the CBSL was the auction method/process.

69. The Petitioner respectfully pleads that the COPE Committee [i.e. the 1st to 26th Respondents] were bound and/or obliged to indicate the afore-said to Parliament and the general public by clearly reporting the afore- said in the said COPE report. However they have not unanimously done so.

70. The Petitioner pleads that on a reading of the totality of the said COPE report, the same gives rise to the express and/or implied (albeit wrongful) impression that the direct/private placement process as regards Treasury Bonds has been properly and/or correctly and/or appropriately and/or lawfully used by the Central Bank from the year of 2009.

71. The Petitioner pleads that in light of the matters pleaded above, and in view of the matters that will be urged at the hearing stage of this application, the actions of the 1st-26th Respondents (i.e. COPE Committee) in coming to the findings and/or statements contained in the said COPE report which expressly and/or impliedly suggest that in issuing Treasury Bonds from the year of 2009 the Central Bank had appropriately used the direct/private placement method, is a violation and/or infringement and/or continuing violation and/or infringement of the fundamental rights of the Petitioner guaranteed under Article 12(1) of the Constitution.

72. The Petitioner pleads that the afore-said actions of the 1st to 26th Respondents (COPE Committee) amount to executive and/or administrative action within the meaning of Articles 17 and 126 of the Constitution of Sri Lanka.

73. In the premises afore-said, the Petitioner pleads that he has become entitled to seek the following relief from Your Lordships Court;

a. Leave to proceed with this application in the first instance;

b. A declaration that the Petitioner’s Fundamental Rights guaranteed to him under Article 12(1) of the Constitution of Sri Lanka has been infringed;

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c. An order and/or declaration that any express and/or implied finding and/or statement and/or suggestion in the said COPE report [marked and annexed hereto as P1(a) P1(b) and P1(c)] that the direct/private placement method in the issue of Treasury Bonds by the Central Bank has been properly and/or lawfully and/or correctly used from the month of January 2009 up until the date of the said COPE report, is wrongful;

d. An order and/or declaration that as at the time of the Treasury Bond auctions of the Central Bank that was held on 27 February 2015 and 29 March 2016, the proper and/or lawful process and/or method as regards the issue of Treasury Bonds was the auction process/method, and not the direct/private placement process/method;

74. The Petitioner pleads that he has not previously invoked the jurisdiction of Your Lordships Court as regards the matters pleaded herein.

75. An affidavit of the Rev. Tiniyawala Palitha Thero is filed along with this Petition in support of the averments contained herein.

WHEREFORE THE PETITIONER RESPECTFULLY PRAYS THAT YOUR LORDSHIPS COURT;

a. Grant the Petitioner leave to proceed with this application in the first instance;

b. Declare that the Petitioner’s Fundamental Rights guaranteed to him under Article 12(1) of the Constitution has been infringed and/or violated;

c. Make Order and/or Declare that any express and/or implied finding and/or statement and/or suggestion in the said COPE report [marked and annexed hereto as P1(a) P1(b) and P1(c)] that the direct/private placement method in the issue of Treasury Bonds by the Central Bank has been properly and/or lawfully and/or correctly used by the Central Bank from the month of January 2009 up until the date of the COPE report, is wrongful;

d. Make Order and/or Declare that as at the time of the Treasury Bond auctions of the Central Bank that was held on 27 February 2015 and 29 March 2016, the proper and/or lawful process and/or method as regards the issue of Treasury Bonds was the auction process/method, and not the direct/private placement process/method;

e. Grant and award the Petitioner costs;

f. Grant such other relief and/or issue such other Orders / directions as is deemed just and equitable by Your Lordships Court, under and in terms of Article 126(4) of the Constitution of Sri Lanka, after taking into account all the facts and circumstances averred by the Petitioner in this application;

g. Such other and further relief as to Your Lordships Court shall seem meet.

Registered Attorneys-at-Law for the Petitioner

Documents annexed to the Petition

1. Our appointment 2. Documents marked as 'P1(a)’ to ‘P5’ 3. The affidavit of the Petitioner

Registered Attorneys-at-Law for the Petitioner

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