Sri Lanka Brief
Situation AnalysisSingapore Citizen Mahendran’s Appointment as CB Governor Challenged in Courts

Singapore Citizen Mahendran’s Appointment as CB Governor Challenged in Courts

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( Keerthi Tennakoon speaking to press after filing the petition)

A petition to obtain a Writ of Quo Warranto preventing Arjuna Mahendran from holding the position of governor of Central Bank.
ACF Adviser Rajith Keerthi Tennakoon presented the petition.  The petitioner says that being a citizen of Singapore Mahendran is  not suitable to hold the post of Governor of the Central Bank of Sri Lanka. Further it says that Mahendran’s involvement in treasury bonds  in Feb 2015 raises the issue of his integrity. The Petitioner argues that ” in the totality of the aforesaid circumstances, the Respondent holding office as the Governor of the Central Bank of Sri Lanka is ultra vires the Monetary Law Act, No. 37 of 1974 (as amended) and is illegal.”

Full text of the petition follows:

IN THE COURT OF APPEAL

OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA

In the matter of an application for an order in the nature of Writ of Quo Warranto under and in terms of Article 140 of the Constitution of the Democratic Socialist Republic of Sri Lanka.

CA (Writ) Application No:         /2016

Keerthi Tennakoon

100/19A, Welikadawatta Road,

Rajagiriya.

 

PETITIONER

-Vs-

Arjun Lakshman Mahendran,

Governor of the Central Bank of Sri Lanka,

No. 30, Central Bank of Sri Lanka,

Janadhipathi Mawatha,

Colombo 1.

RESPONDENT

TO:     HIS LORDSHIP THE PRESIDENT AND THEIR LORDSHIPS THE OTHER         HONOURABLE JUDGES OF THE COURT OF APPEAL OF THE             DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA

On this   20th   day of June, 2016

The Petition of the Petitioner above named appearing by Ms. Dharshika Perera and Samudra Guanawrdena under  the name and style of  “NICLO ASOCIATES” ,  his  registered Attorney-at-Law states as follows;

  1. 1. The Petitioner is a citizen of Sri Lanka.
  2. 2. The Petitioner states that he is the Executive Director of CaFFE, and has been involved in ensuring the rule of law and good governance.
  3. 3.The Petitioner invokes the jurisdiction of Your Lordships’ Court in respect of the subject matter of this application in the public interest. The Petitioner states that the issues to be determined by Your Lordships’ Court in this application are of significant public and constitutional importance. The Petitioner states that as a citizen of Sri Lanka it is a constitutional duty under Article 28 of the Constitution to uphold and defend the Constitution and the law and to preserve and protect public property and to combat misuse and waste of public property and he is conscious of his said Constitutional duties.
  4. The Respondent is the incumbent de facto Governor of the Central Bank of Sri Lanka who is holding onto the said office illegally.
  5. In this application the Petitioner is seeking to impugn the Respondent illegally holding office as the Governor of the Central Bank of Sri Lanka.
  6. The Petitioner states that the Central Bank of Sri Lanka is the authority responsible for the administration, supervision and regulation of the monetary, financial and payments system of Sri Lanka and the Central Bank of Sri Lanka is charged with the duty of securing economic and price stability and financial system stability with a view to encouraging and promoting the development of the productive resources of Sri Lanka.
  7. The Petitioner states that in terms of the provisions of Section 19 of the Monetary Law Act, the Governor is the chief executive officer of the Central Bank of Sri Lanka and is charged with the powers, duties and functions stipulated in Section 19 of the Monetary Law Act.
  8. The Petitioner states that the Governor of the Central Bank of Sri Lanka is a public officer within the meaning of the Constitution of the Republic of Sri Lanka
  9. The Petitioner states that the Respondent is presently a citizen of Singapore and is not a citizen of Sri Lanka. The Petitioner states that the Respondent is residing in Sri Lanka on a ‘working visa’
  10. The Petitioner states that the Respondent was citizen of Sri Lanka by birth but subsequently renounced his Sri Lankan citizenship and became a citizen of Singapore, by registration. The Petitioner states that under and in terms of Article 126(1) of the Constitution of Singapore no person shall be registered as a citizen of Singapore until he has taken the oath of renunciation of allegiance and loyalty in the form set out in the 2nd Schedule of the Constitution of Singapore. (A copy of the said second schedule is annexed herewith marked as P1 and pleaded as part and parcel of this Petition.)
  11. The Petitioner states that as required by the Constitution of Singapore, the Respondent as a citizen of Singapore has pledged allegiance to the Constitution of Singapore.
  12. The Petition states that Article 170 of the Constitution of the Democratic Socialist Republic of Sri Lanka defines a “public officer” as a person who holds any paid office under the Republic, and excludes certain categories of persons from the application of this definition. However, the governor of the Central Bank of Sri Lanka has not been excluded from the application of this definition.
  13. The Petitioner further states that as per Article 165 of the Constitution of the Democratic Socialist Republic of Sri Lanka every public officer is required by the Constitution to take an oath or make an affirmation as set out in the 4th Schedule of the Constitution.
  14. The Petitioner states that therefore the Respondent being a citizen of Singapore is incapable of pledging allegiance to the Constitution of the Republic of Sri Lanka. The Petitioner further states that a situation might arise where the Republic of Sri Lanka will have to enter into financial transactions with the Republic of Singapore or financial institutions incorporated in Singapore and in such situations the Respondent being a citizen of Singapore who has pledged allegiance to the Constitution of  Singapore would not be in a position to discharge the proper functions of the office of the Governor of Central Bank of Sri Lanka and the same demonstrates that the Respondent is not legally entitled to hold office as the Governor of the Central Bank of Sri Lanka.
  15. The Petitioner states that in the circumstances the Respondent is disqualified by law from holding office as the Governor of the Central Bank of Sri Lanka.
  16. The Petitioner states that the Respondent was purportedly appointed as the Governor of the Central Banka of Sri Lanka on or about 27.01.2015 and since then the Respondent is in usurpation of the office of Governor of the Central Bank of Sri Lanka
  17. The Petitioner further states that according to the profile of the Respondent published in Business Week Bloomberg, the Respondent appears to be affiliated to the Credit Suisse Group AG, which is a global financial institution from which the Government of Sri Lanka has decided to borrow money. ( A true copy the relevant web page of the Respondent’s profile is annexed hereto marked as P2 and pleaded as part and parcel of this Petition.)
  18. The Petitioner states that in terms of Section 11(c) Monetary Law Act, a person who is a director, officer, employee or shareholder of any banking institution other than the Central Bank of Sri Lanka is disqualified from holding office as the Governor of the Central Bank of Sri Lanka.
  19. The Petitioner states that therefore by virtue of his involvement with the Credit Suisse Group AG the Respondent is disqualified by Section 11(c) of the Monetary Law Act from holding office as the Governor of the Central Bank
  20. The Petitioner further states that there are serious allegations of corruption against the Respondent, in particular in the issuance of treasury bonds on 27.02.2015. The Petitioner states that;
  • On 27.02.2015, the Central Bank of Sri Lanka announced an auction of issuing 30 year treasury bonds for Rs. 1000 million and thereafter Public Debt Department of the Central Bank contacted commercial banks and primary dealers over the phone canvassing bids for the above auction around the market rate of 9.35% to 9.75% range.
  • At the auction Central Bank of Sri Lanka accepted bids for Rs. 1000 million at weighted average of 11.73%. However bids for Rs. 3000 million from the primary dealer Perpetual Treasuries Ltd., owned by the Respondent’s son in law was accepted at 12.50%. Most of the other banks and the primary dealers bid at low rates below 11.00%.
  • Soon after the conclusion of the above auction, on 27.02.2015 the Central Bank announced a policy change removing restrictions to excess funds of commercial banks at the standing deposit facility of the Central Bank and effectively increasing overnight money market rates by around 1%. This policy change was done only 3 days after the previous monetary policy announcement where monetary board stated that there was no need to change the monetary policy.

The activities of the said primary dealer Perpetual Treasuries Ltd., who successfully bid for Rs. 3000 million at 12.50 %and Rs. 2000 million at around 12.00% at the auction clearly indicates prior knowledge of impending monetary policy changes.

21. The Petitioner states that in the aforesaid circumstances the conduct of the Respondent and holding of office as the Governor of the Central Bank of Sri Lanka is obnoxious to all the norms of good governance.

22. The Petitioner states that  in the totality of the aforesaid circumstances, the Respondent holding office as the Governor of the Central Bank of Sri Lanka is ultra vires the Monetary Law Act, No. 37 of 1974 (as amended) and is illegal.

23. The Petitioner states that in the circumstances, the Petitioner is entitled to a mandate in the nature of Writ of Quo Warranto declaring that the Respondent is disqualified and/or not entitled to hold office as the Governor of the Central Bank of Sri Lanka.

24. The Petitioner states that he has not previously invoked the jurisdiction of Your Lordships’ Court in respect of the subject matter of this application.

 

WHEREFORE THE PETITIONER RESPECTFULLY PRAYS THAT YOUR LORDSHIPS’ COURT BE PLEASED TO;

 

  • Issue Notice on the Respondent;
  • Call for and examine the entire record pertaining to the subject matter of this application;
  • Grant and issue an order in the nature of Writ of Quo Warranto declaring that the Respondent is disqualified and/or not entitled to hold office as the Governor of the Central Bank of Sri Lanka;
  • Grant costs;
  • Grant such other and further reliefs that Your Lordships’ Court shall seem meet;

 

Attorney-at-Law for the Petitioner

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