Some purchases by PTL reflected only in internal documents

DSG Milinda Gunatilleka says it should have gone the CBSL systems

By Shehan Chamika Silva

Cross examining PTL CEO Kasun Palisena on its costs of sale in Bond purchases, Deputy Solicitor General Milinda Gunathilake today said that most of the purchases reflected as PTL’s expenses in their given documents were unreliable because neither any payment nor security movement with counter parties could be seen in the CBSL recording systems or other current accounts of PTL in commercial banks.

PTL had earlier provided a set of documents disputing the calculation made earlier by Additional Director (IT) of Central Bank, K.V.K Alwis, over the capital gains of PTL.

In order to disprove Alwis’ calculation, PTL had provided a set of documents of their bond purchases during 2015 -2016.

Some of them were Government Securities bought by PTL from its connected companies such as Perpetual Capital Holdings and W.M. Mendis & Company. Also there were bond purchases with some other individuals as well.

Presenting a sample of expenses reflected in the PTL documents, DSG Gunathilake was of the view that the payments and the security movement should be reflected in the CBSL recording systems (RTGS and LSS) if PTL had been involved in such purchases.

However, it was revealed that none of those transactions are reflected in the CBSL recording systems.

DSG Gunathilake was of the view that theses purchases cannot be regarded as costs of PTL because they were only reflected in the internal book entries of PTL.

After a series of questions by Commissioners and the DSG, PTL CEO Palisena explained that those PTL purchases from PCH and WM Mendis & Company may not have been reflected in the CBSL recording systems if parties had involved in ‘netting off’ transactions which happens when settling credits of parties with each other.

However, the Commission seemed unsatisfied with the witness’ explanation.

It was also revealed today that PTL had prepared the documentation works in those internal transactions with its internal companies. This was revealed when DSG Gunathilake played a voice recording which shows one of PTL’s dealers asking Perpetual Capital Holding (PCH) Finance manager to obtain PCH’s letter heads to conclude transactions.

It was also revealed that ArjunAloysius was the ultimate beneficial owner of PTL and had confirmed all the bond purchases.

DSG Gunathilake was of the view that the documents provided by PTL to the commission in expectation of showing their cost of sales in order to dispute the previous calculation of CBSL with regard to PTL’s capital gains should have given all the necessary details to prove their purchases.

DSG Gunathilake will continue with the cross examination of PTL CEO Kasun Palisena on Monday and Nihal Fernando PC will re-examine the witness on Tuesday.