Tuesday, June 14, 2016

Mahendran – unnecessary scapegoat where GOATS RULE!

In a Country, where every Politician is corrupt, and the few who pretend not to be corrupt, don’t even understand the word, we have an APPOINTED official by the PM, who gave up a lucrative job, and who could return to an even more lucrative job overseas, being hounded out of office for being CORRUPT!

If you believe I am partial to the Governor, please read the article I wrote on January 12th 2015 a few days after the Presidential Election of Maithripala Sirisena, where I predicted this scandal by association, and the PM did not heed my advice, about Mahendran.

Frankly I don’t know why someone who can earn Rs500M a year, would take this job, except for the prestige factor, and if he knew the grief he would encounter in retrospect would surely have refused it. NO OTHER SRI LANKAN IN THIS COUNTRY CAN COMMAND SUCH AN INCOME IN A FOREIGN BANK. Not one of the 225 MPs could even get a job as a security guard in a foreign Bank.

As an international Banker (India’s Governor was also an international Banker), he is probably the ONLY person in Sri Lanka who is in a job for which he is qualified. I challenge the reader to name anyone else, least of all any of the 225 in parliament as qualified to be even a people’s representative!(to be a servant of the people)

While allegations abound, nothing is proved, and all have been dealt with without any hint of impropriety, and any non-disclosure to COPE is merely due to the need for confidentiality in not disclosing Monetary Policy to third parties, which will unfavorably impact on SL ability to borrow at lower interest rates. It is as simple as that.

With regard to him being linked to his son-in-laws dealings, I will only say that it is unfortunate that his daughter married the boy, who made a lot of money during the Rajapakse administration, including in the BOND issues, that were NOT transparent then, as they were NOT auctioned, but price fixed forcing Govt. institutions to subscribe at PRESCRIBED RATES and not market rates that would evolve in auctions.

COPE does not realize the need for confidentiality/unpredictability/mix of maturity dates/ changes to requirements on short notice/ taking advantage of short term international interest rate movements to benefit Sri Lanka. International high finance is definitely NOT for the faint hearted. Anyone working at the CB or retired has never taken a personal risk, so they fail to understand what it really means, and the high stakes involved in Bond Auctions and sudden need for big changes in funds raised, and risks attached, which are just too much to answer to COPE, so they err on the safe side, at huge cost to SL in final debt burden.

There is nothing he can do about the fact that his son in law may own the largest non Bank Bond Trading Company in Sri Lanka, as that would have been the case either way, even if I was the Governor. So when the next set of accounts discloses he made Rs10B in bond trading, you will shout corruption, I will say reward for high risk bets his CEO took on the economy, and none of the pundits in Sri Lanka can understand that. Perhaps no one understands the huge losses and huge profits you can make on betting on interest and exchange rates! The bigger you are the bigger risk you can take, and the more money you can make. You can lose big like ENTRUST and go bankrupt, too, if you make the wrong bet!

Sri Lanka is a corrupt state, where even a new Govt. pledging good Governance, has as its political leaders except the PM, all looking at ways to personally enrich themselves. Why are the intelligent masses NOT pointing a finger at the obviously corrupt deals these people continue to make, instead of attacking the easy target, NON politician to whom you will never go, after your allegations, for help, when any of the others may be useful to you in getting whatever it is you want! Please think about that logic!

As for blocking investigations, ask investigative journalists to look at the real reasons, as all the Media reporting is one sided, and people come to conclusions.

Just imagine how satisfied the corrupt politicians are that CB Governor is the target of Jayaratne and Tennekoon, they have nothing to lose even if they are right or wrong. As for naming the real crooks, they have all to lose, their gravy train keeping them alive. They must get out of the frog in the well mentality, and direct their ire where it is most needed, not the easiest punching bag, the only fish in the well!

Sri Lanka’s recent slide into economic crisis has nothing to do with Monetary Policy as managed by the CB and dependent on International Markets, but Fiscal Policy that has shown flip flops, lack of direction, uncertainty and costly Government spending mismanagement(read corruption).  


I personally believe that this distraction of using the Governor as the root of all evil, has prevented objective reporting, to enlighten us the public to the true massacre of the innocents (public) that take place daily, by our elected officials! We can stop it if we think National Interest and NOT personal!


  1. Island mentality is at the heart of the problem in Sri Lanka.
    For example, a Rs50M BMW X5 about 3 years old can be bought for Rs 500K only in the US. So is a suit from a shop!

    In SL we can't think of spending Rs500K on a suit, but can think of a Rs50M vehicle. So when Mahendran buys a suit pays Rs 500K by charging it to his credit card, and reimburses the CB from his personal funds, people go hay wire!

    So when people go hay wire, explain that as Island mentality. Until we lose that, we have NO HOPE for a future. Our politicians are the worst exponents of this mentality.

  2. If I was a primary dealer and I know my bids would be scrutinized by COPE and the Auditor General, I would be conservative in my placement.

    The resulting effective higher interest rate that the Govt will have to pay is a higher cost to the state! If I was aggressive to get the bonds and bid at lower rates, I am taking a bigger risk, but I could grab more of the bonds and make more in the secondary market, if I am lucky.

    Do you think the Auditor General would buy that argument? Hey that is the whole reason, why such transactions have to be done without full disclosure.

    This is not like bidding at a fish auction! It is so easy to distort the facts when people are ignorant of how this is done.

  3. The link is a worthy read of the state of play vis a vis Mahendran and his background as the most qualified for the job.