Govt. can seek compensation for losses

Govt. can seek compensation for losses

Attorney General Jayantha Jayasuriya has informed Parliament that the government can seek compensation for relevant parties in the event it incurred any loss in the Treasury Bond issue of the Central Bank.

The Attorney General has informed Parliament that he has instructed the Director of the CID to expedite criminal investigations on the written complaint made by the Central Bank Governor on the Treasury Bonds issue on February 27, 2015.

He had also directed the CID to report about the progress of the investigations to the Attorney General’s Department.

Speaker Karu Jayasuriya yesterday in Parliament tabled a letter received from the Attorney General in reply to the COPE report referred to him.

The AG in his letter had also pointed out,“the content of the COPE report points to the possibility of several transgressions known to the law, including market manipulation,insider dealing and non-compliance with mandatory procedure”.

The AG has also observed the possibility for the Government to seek compensation from the relevant parties if it had incurred any liability at this instance.

“In terms of Section 21D of the Registered Stocks and Securities Ordinance, in the event of Government incurring any liability or making payment of any sum due as principal, interest or redemption proceeds with regard to Treasury Bonds, and where such liability arises or such payment is made in consequence, or by reason of any default of a direct participant or a dealer direct participant, such participant shall be liable on demand by the Government, to indemnify the Government with respect to such liability or payment” the letter said.

However, the AG has also noted that a reasonable estimation of damages assessed by a method that could be substantiated before a court of law would be required, and for this purpose the Government would have to provide a precise quantification of the loss it suffered. “The said quantification should be carried out by the Auditor General’s Department, with the assistance of an independent expert or experts whose evidence can be relied upon in a court of law” the AG said in the letter.

“In order to consider the possibility of criminal prosecution against a particular person or entity being initiated under the aforesaid provision or any other law, an investigation based on a complaint to the police on a complaint would be a prerequisite” the letter further stated.

“In addition to aforesaid civil and criminal remedies, the Central Bank is entitled to exercise regulatory powers over primary dealers in terms of inter alia regulation 11(2) and 12 of the Registered Stocks and Securities (Primary Dealers) Regulations No.1 of 2009 and Section 21D of the Registered Stocks and Securities Ordinance and also under Section 56A of the Ordinance and the Code of Conduct of Primary Dealers,” he added in the letter. (Daily News)

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