The President Maithripala Sirisena has given instructions to Minister Lakshman Kiriella to reconstitute the boards of the Bank of Ceylon and People’s Bank as their three-year tenure had expired and not due to any corruption allegations, a top official said.
Speaking to the Sunday Observer yesterday, Secretary to the Ministry Public Enterprise and Kandy City Development, Ravindra Hewavitharana said although the President’s intimation that he wishes to reconstitute a new Board had reached the Minister in writing on Wednesday, an ultimatum for the said implementation was not specified.
“In complying with His Excellency’s directive, the Director Boards will not be immediately dissolved, but will continue to function until new members are finalised soon,” Hewavitharana said.
According to sources, Minister Kiriella had met President Sirisena on the night of Wednesday, October 3 to discuss restructuring measures and the new Boards are expected to be reconstituted with the understanding and communication between the President and the Minister.
Ronald Perera was appointed Chairman of Bank of Ceylon on January 28, 2015 while Hemasiri Fernando was appointed Chairman of the People’s Bank on February 9, 2015. The two officials along with the Board of Directors were appointed by the former Minister of Finance, Ravi Karunanayake as the two institutions then came under the purview of the Ministry of Finance.
The two State banks were later brought under the Ministry of Public Enterprise and Kandy City Development in September 2015.
According to Chapter 397, Clause 6 (1) of the Bank of Ceylon Ordinance, the key piece of legislation governing the functions of the State banks, “the management and administration of the affairs of the bank shall be vested in a board, consisting of six directors appointed by the Minister”.
Section 8 of The People’s Bank Act (No. 29 of 1961) stipulates that while the subject Minister has the authority to appoint two directors, the Minister appointing a director may, by an instrument signed by him, also removed from office such director.
“It is only the subject minister who has the authority to dissolve Director Boards. However, the President has written to me to dissolve the boards using the powers vested in me. I have asked the President to submit a list of names to be included in the boards,” Minister Kiriella clarified while speaking at the launch of the ‘Lak Diriya’ loan scheme in Kandy on Friday.
The Minister while noting that reports of director boards being dissolved were misleading, also cautioned that it could tarnish the global reputation of the two State banks.
On Friday, People’s Bank Chairman, Hemasiri Fernando said that although he and the board of directors of People’s Bank are ready to offer their resignations as per the President’s request but the subject Minister is yet to provide instructions.
“As soon as we are informed to resign, the Chairman and the Board of Directors are willing to provide our letters of resignation.
The President has instructed the Minister to do this but the Minister has not yet given instructions,” Fernando told a local television channel. Early last month, Fernando was appointed as President Maithripala Sirisena’s Chief of Staff replacing I.H.A. Mahanama, who is currently in remand custody over bribery and corruption charges. Meanwhile, a press release issued by the UNP Central Media Unit on Friday stated that a team of UNP representatives met President Maithripala Sirisena on Thursday to discuss the President’s decision to dissolve the Boards appointed by relevant Ministers to the three institutions functioning under two UNP Ministers. The release, however, did not elaborate on the contents of discussion.
On Thursday, Minister of Development Strategies and International Trade, Malik Samarawickrama also categorically refuted media reports that cast aspersions on the conduct of the Board of Directors of the Board of Investment. Pointing out that the BoI Directors comprised highly respected professionals, who functioned with utmost responsibility and integrity, he added that such misleading media reports would erode investor sentiment.
“I was appointed by the President. But, since he deems he wants to retrench the Board, it is my duty to comply with his decision. Therefore, I sent in my resignation,” Ratnayake said noting that he had acted in a professional and transparent manner during the course of his short tenure.
“The Board functioned independently without any political pressure. We hired about 50 management trainees and all of them were hired on merit without any political interference”.