• Concerns raised whether AG’s Dept. failed to properly frame charges
• ‘AG can amend charges or appeal decision’

By Skandha Gunasekara The 31 March 2016 bond scam case will be taken up on 26 January 2022, following a request for time to consult the Attorney General (AG) and revisit the charges or the relevant actions to be taken. Meanwhile, legal experts questioned whether the AG’s Department had failed to properly frame the charges against the alleged perpetrators. Last Monday (6), the Colombo Permanent High Court Trial-at-Bar ordered the release of several accused, including former Finance Minister Ravi Karunanayake, former Central Bank of Sri Lanka (CBSL) Governor Arjuna Mahendran, and Perpetual Treasuries Ltd. (PTL) Director Arjun Aloysius, from 11 charges out of 22 in connection with the alleged Central Bank bond scam of 31 March 2016. Karunanayake and six others were arrested earlier this year for alleged connections to the misappropriation of bonds valued at Rs. 15 billion at a bond auction at the CBSL on 31 March 2016. They were later released on bail with a travel ban. Half the charges dropped The three-judge bench, composed of Justices Amal Ranaraja, Namal Balalle, and Aditya Patabandige, announced the verdict based on a preliminary objection raised by the lawyers who appeared for the accused. The bench ruled that 11 of the 22 charges could not be carried forward, and, therefore, decided to clear the accused from those 11 charges. The move caused a public backlash on social media, where questions were raised on the judicial process of the country and why many high-profile cases on corruption and other crimes were withdrawn or dropped. A Presidential Commission of Inquiry (PCoI) report into the bond scam had earlier stated that PTl had made profit mainly through “price-sensitive inside information” and “market manipulation”. The court decision came just weeks after Finance Minister Basil Rajapaksa stated, at the Budget 2022 reading on 12 November, that Rs. 8.5 billion of Perpetual Treasuries’ earnings had been transferred to the Treasury, based on insights gathered from the PCoI report. “This report identifies that Rs. 8.5 billion was received by wilfully violating the provisions of the code of conduct issued by the CBSL, under the Registered Stock and Securities Ordinance No. 7 of 1937, to the primary dealers on best practices,” Rajapaksa had stated in his Budget 2022 document, according to reports. Despite the court’s decision to drop 11 of 22 charges, legal experts told The Sunday Morning that the decision did not acquit the accused of the other charges filed against them. However, the 11 charges that were dropped related to the alleged misappropriation of public funds, while the remaining charges were related to aiding and abetting. President’s Counsel (PC) Anil de Silva, appearing for the seventh accused, PTL Director Chitta Ranjan Hulugalle, pointed out that action could not be filed against a company that is a corporate entity, under the Offences Against Public Property Act.  De Silva also argued that as the complaint was based on the first charge, it was not possible to maintain the charge against the other defendants. Following some of the charges being dropped, Senior Additional Solicitor General Priyantha Nawana, appearing for the AG’s Department, had requested time to consult the AG and amend the charges or on the relevant action that needed to be taken. Thus, the case and the evidence examination were postponed to 26 January 2022. ‘Not the first time’ The AG’s Department had filed indictments against former Finance Minister Karunanayake; former CBSL Governor Mahendran; PTL Director Arjun Aloysius, Chairman Jeffrey Joseph Aloysius, and Chief Executive Officer (CEO) Kasun Palisena; Directors Ajan Gardiya Punchihewa, Sangarapillai Padumanathan, Indika Saman Kumara, Hulugalle, and Pushpamitra Gunawardena; and PTL, in connection with the allegation. Former Bar Association of Sri Lanka (BASL) President Upul Jayasuriya PC pointed out that this was not the first instance that charges had been dropped in a high-profile case. “Let us examine the Azath Salley matter. After he was kept in remand for nearly one year, finally, in one day, the judge acquitted him of all charges. “Another case is that of (former Criminal Investigation Department Director) Shani Abeysekara; while every witness was saying that they were pressurised and were asked to sign statements (against Shani) and all that, indictments were filed (against Shani). “It’s a similar situation with the charges that were cleared in the bond scam case.” Incorrect framing? Jayasuriya PC alleged that the Attorney General’s Department had framed the charges incorrectly. “This is something that the Attorney General’s Department always does. For example, even if a private cheque bounces, the (perpetrators) are charged under the (Offences Against) Public Property Act – what is the connection to public property there? “In this case, when the CBSL engages in a commercial transaction, they are viewed as another party, like any other private individual or company. As such, the charges, under the (Offences Against) Public Property Act, have been framed incorrectly,” he opined. He noted that the Attorney General’s Department need not necessarily refile all the charges, and that it was a mere misinterpretation on part of the Department when filing the initial indictment.  “However, they must take action – if not criminal action, at least disciplinary action – against those responsible,” he added. Attorney-at-Law Chrishmal Warnasuriya explained that as a corporate entity, PTL could not be charged under the Offences Against Public Property Act. “Charges framed under the (Offences Against) Public Property Act cannot make a corporate body an accused. Therefore, if you can’t hold a charge against PTL, then there is no question of charging them for aiding and abetting either,” he opined. “The judges came to a preliminary ruling following preliminary objections being raised. Before starting a trial, the defendant is entitled to make a preliminary objection. Here, the question of law was raised by those defending, saying that you can’t bring these charges, which they are saying are wrong and therefore can’t be maintained,” he explained. Warnasuriya said the AG could either file fresh charges, continue with the remaining charges that have been maintained, or even appeal the High Court’s decision to drop the charges, adding: “This decision itself can also be appealed. I don’t know if the AG will decide to appeal the matter or whether they would look at another way of framing those charges.” He added that he believes the charges filed under the Securities and Exchange Commission of Sri Lanka Act and others, were being held. With regard to filing new charges posing the risk of double jeopardy, Warnasuriya said that it would be mitigated if the charges were framed in a different manner, under another law. He said the AG’s Department’s decision on the next steps would be based on whom it wanted convicted.  “The prosecuting arm of the Government has a duty to assess the chances of getting a conviction in the trial process, as it is spending public money on it – on the judges, court system, infrastructure, etc. So, the AG has to make a decision on whether the material (evidence) they possess is sufficient to lead to a conviction and evaluate the situation before they continue. As such, they may very well look at what they have now, based on what it is they want to achieve, i.e., what conviction against whom.” ‘Withdrawal is not acquittal’ Former BASL President W. Dayaratne PC noted that the AG’s Department could change the charge at any time over the course of the trial, until it was complete.  “The AG’s Department can amend the charge sheet until the trial is concluded. That is the normal process. You can’t say that because 11 charges were withdrawn, those accused were partly acquitted,” he clarified, asserting that the withdrawal of the 11 charges could not be viewed as an acquittal of the accused.  “Sometimes, the AG’s (Department) will file an indictment and thereafter, will consider the material that is available, and they will decide to drop certain charges. You don’t have to prove all the charges. Out of the other 11 charges, a conviction can come through from even one. Sometimes, it could be considered a smaller offence, but it depends on the charge. But whatever charge that is proven comes with a punishment.” He also said he did not believe there was any political interference in the AG’s Department when the charges were initially filed. “I don’t think there was any political motivation. I have the utmost respect for the AG’s Department, having practiced for 43 years, and I don’t think there was any political motivation or interference in the AG’s Department,” Dayaratne opined. Transparency International Sri Lanka (TISL) pointed out that public attention was on this case and its outcome was crucial to how TISL viewed the implementation of the rule of law in Sri Lanka.  “It seems that Ravi Karunanayake and others were released from certain charges based on a technicality, that the (Offences Against) Public Property Act was intended to apply to only natural persons and not institutions. TISL notes that this is a case that drew much public attention towards what seems to have been an existing serious form of corruption in the country; meaning insider trading, conflict of interest, abuse of power, embezzlement of public funds, and money laundering. Therefore, the people are watching with hope that the court, as the ultimate guardian of the rights of the people, would enforce the law against the perpetrators,” TISL Executive Director Nadishani Perera told The Sunday Morning.