By Sarath Dharmasena and Shyam Nuwan anewatte

March 16, 2017, 10:46 pm

Assistant Governor and Secretary to the Monetary Board of the Central Bank H. A. Karunaratne, yesterday testifying before the Special Presidential Commission of Inquiry probing the alleged Bond Scam, said the transfers of key officers within the institution after Arjuna Mahendran assumed duties as its Governor on February 23, 2015 had shaken the very foundations of the Central Bank.

He said during that period 14 heads of department had been transferred along with 20 other key persons and the total number of transfers effected during that period stood at 501.

“Among those transferred were heads of four vital departments of the Central Bank and Mahendran’s action had caused dissent and dejection among the senior officers of the bank.

Two teams of officers following discussions among themselves had sought a meeting with the Governor and explained the situation to him, Karunaratne told the commission.

He said that prior to Mahendran becoming Governor the practice had been to consult Deputy Governors and Departmental Heads prior to effecting transfers.

The Secretary said four officers including him had visited Mahendran at his official residence and explained the situation and Mahendran had assured all of them that he would rectify the mistakes, but that pledge had not been fulfilled.

Karunaratne told the Commission that he had worked under three Governors, namely Sunil Mendis, Ajith Nivard Cabraal and Arjuna Mahendran and transfers of that magnitude had never been effected previously.

He said that previously not more than five to six departmental heads and 195 of general staff had been transferred and the internal transfers had to be effected in a justifiable manner without upsetting the workings of the departments.

Member of the Commission Supreme Court Judge Justice Prasanna Jayawardena: How many Departments are there in the bank

Karunaratne: Thirty.

Justice Jayawardena: Did each department have a head?

Karunaratne: Yes

Justice Jayawardena: How did 34 heads get transferred in 2014

Karunaratne: Some heads of department were transferred from one division to another only for a short period and then to another.

Justice Jayawardena: Who should take the responsibility for these haphazard transfers?

Karunaratne: All the transfers had been approved by Mahendran. All transfers were effected after his approval.

Justice Jayawardena: Was transferring such a large number of persons unusual in the history of the bank.

Karunaratne: Yes your honour