“Treasury was fine at the end of February 2015”: says Dy Sec to the Treasury -Heated argument between ASG and Mahendran’s lawyer

 By Shehan Chamika Silva

 

Deputy Secretary to the Treasury, Sajith Attygalle told the Presidential Commission of Inquiry that there was an un-estimated excess in revenue to the Treasury in February 2015 thereby no short falls happened.

 

He said the Treasury was fine in respect of the difference between the actual debt requirement and the total borrowings of the government in January and February 2015.

 

Mr. Attygalle was handling the Treasury management, fiscal policy and Treasury Operation Department since 2012.

 

Mr. Attygalle broadly explained about the Treasury Management to the commission during the cross examination led by Counsel Chanaka de Silva.

 

According to the witness, the Treasury would usually communicate the fund requirements of the Government to the Public Debt Department of the CBSL on the least cost using cash flow statements of the Treasury.

 

He explained that the Government revenue would be largely allocated to the entire expenditure of the Government while the debt service repayment would be settled using CBSL borrowings.

 

The witness said the Treasury generally requires more borrowings from the CBSL in expectation of using in expenditure as well.

 

Repayment of the debt services was amounting to 33.64 billion for the month of February 2015.

 

The Treasury wanted Rs. 46 billion from the CBSL for the month of February Month. However, the CBSL had managed to raise only Rs. 40.5 billion which was a lesser amount compared to the Treasury requirement.

 

The witness said it was not unusual by the CBSL and in case of a deficit as such could be raised in many other ways.

 

He also said that there was an excess in estimated revenue amounting to Rs. 10.5 billion by the middle of February, thereby there were no short falls were occurred in Treasury accounts.

 

“If the CBSL failed to supply the required amount indicated in the cash flow, then the Treasury would go for alternatives as postponing some expenditure of the Government or obtaining Over Draws from BOC and People’s bank”, he said.

 

He said that at the end of February, 2015 the Treasury was quite fine. Thereby, the new fund requirements for March 2015 were indicated to the CBSL, which was an entirely different requirement because the February requirement is no longer relevant.

 

However, it was revealed earlier that there was a request from the Finance Ministry to the Central Bank of Sri Lanka in the middle of February 2015 regarding the urgency of raising additional funds amounting to Rs. 75 billion.

 

Earlier the witness had said that he was not informed by any government entity prior to the controversial Bond auction that took place on February 27, 2015.

 

Counsel Chanaka de Silva questioned the witness about several meeting that took place in the Finance Ministry, the Cabinet, and the CBSL regarding the urgent money requirement for the Road Development Authority projects during the month of February and March.

 

The witness said that he was not part of those meetings thereby unaware about what was discussed in the meetings.

 

In the meantime, during the Cross-examination, a heated argument took place between Additional Solicitor General Dappula de Livera and Counsel Chanaka de Silva who was appearing on behalf of the former Governor.

 

The argument began when Mr de Silva commented to the objection raised by the ASG regarding a question put forward to the witness during the cross examination.

 

“You cannot dictate to me”, said Mr. Livera. The Counsel said neither ASG can dictate his line of questioning. Replying to that Mr Livera repeatedly said that he can and will dictate.

 

Interfering into the intense argument, SC Justice Prasanna Jayawardena advised both the senior counsel to discontinue the argument as it seemed an unsuitable behavior.