Indian head for CBSL Bond Investigation Sacked…? Here’s the truth!

The Monetary Board, in consultation with the Auditor General and the Attorney General, took measures to commission six forensic audits pursuant to the recommendations of the Presidential Commission of Inquiry, appointed to investigate and inquire into and report on the issuance of Treasury bonds, during the period 1 February 2015 to 31 March 2016. As per the CBSL reports out of total six forensic audits, five forensic audits have been completed so far. The procurement process for the sixth forensic audit is currently underway.

With Speaker Karu Jayasuriya approving the tabling of forensic audit reports on bond transactions of the Central Bank of Sri Lanka (CBSL), there has been widespread interest among public about the revelations and observations in these audits.

In this scenario, we noticed a number of posts with the following caption in Sinhala, “මහ බැංකුවේ බැඳුම්කර නිකුත්කිරීම සම්බන්ධයෙන් වෝහාරික විගණන වාර්තා සකස් කිරීමට භාර දුන් ඉන්දීය සමාගමේ ප්‍රධානියා ධුරයෙන් ඉවත්කර තිබේ. ඔහුට එල්ල වූ දූෂණ චෝදනා මත තනතුරෙන් ඉවත් කර ඇතැයි ඉන්දීය මාධ්‍ය වාර්තා විසින් වාර්ථා කරයි.” Translation of the above text is as follows: “The head of Indian firm, which was tasked with preparation of forensic audit reports on the issuance of Central Bank Bonds, has been sacked. Indian media reports claim that he has been sacked due to allegations of corruption against him.” with the caption also carries a link to a Economictimes (India) article.

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Mostly these social media claims originated from reports of the sacking of the head of the Indian team involved in the Central Bank Bonds investigation (බැදුම්කර වෝහාරික වාර්තාව හැදු ඉන්දීය සමාගමේ ලොක්කා පන්නයි) published on a number of websites.

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This news went viral as the Central Bank Bond Investigation report is a trending topic in the social media circles of Sri Lanka. This is evidently seen here as a number of websites and social media profiles are carrying the reports.

We could not find any official news report in the local mainstream media related to these claims and as we received few requests from our readers to check the authenticity of such claims. Hence, we decided to carry out a fact check.

Fact Check (සත්‍ය තොරතුරු විමර්ශනය කිරීම)

Since all these claims were based on an Economic times report we read the full article. The screenshot and link of the article given below:

Economictimes article (June 2019)

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The article states that a partner of the audit firm BDO was expelled due to accusations of corruption against him while working on an assignment of India’s Income Tax Department. The Sri Lankan tax department called as Inland Revenue Department, nowhere mentioned in the report.

In order to get an insight of these claims we checked the BDO website learnt that they have a global presence in a number of countries. We contacted BDO, Sri Lanka, Managing Director - Mr. Sujeewa Rajapaksa. He informed us, “The entire audit was done by BDO’s Indian partners and his team was not involved in the process. The biddings were open for clients with international experience in conducting forensic audits.”

We also found the below notice published by Central Bank of Sri Lanka inviting bids for the forensic audit in 2018 for implementation of the recommendations of the Presidential Commission of Inquiry to investigate, inquire and report on the issuance of treasury bonds during the period from 1^st February 2015 to 31st March 2016.

Public Notice by CBSL | CBSL Notice

BDO Sri Lanka informed us that Mr. Srinivasa Rao of BDO India was heading the Central Bank investigation. Since he was signatory of the final bond investigation report as well, we decided to contact BDO India to get their stance on above claims. When we contacted BDO India, we learnt that Mr. Mr. Srinivasa Rao was indeed heading the entire forensic audit team. However, the personnel expelled was from a different project of BDO India with no relation to this project and that decision had no bearing or execution involvement, in the CBSL project which was completed successfully and that Mr. Rao to this day continues as the Partner and Leader of Forensics based in Chennai.

BDO India – Our People

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Conclusion

Hence, from our investigations it is clear that the claim “Head of the Indian team involved in the Central Bank Bonds investigation sacked” is very misleading and the personnel expelled was not Mr. Srinivas Rao, the head of team investigating Central Bank Bonds. The expelled personnel was from a different project of BDO India and that decision had no bearing or execution involvement, in the CBSL Treasury Bond project.

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