Forensic audits out soon making bond scammers beware

Forensic audits out soon making bond scammers beware

14 October 2019 11:45 am

Five out of six forensic audits into alleged Treasury bond scams and transaction of Rs. 2.2 trillion Employees’ Provident Fund (EPF) are nearing completion and those audit reports will be ready by next month, Central Bank (CB) Governor Dr. Indrajit Coomaraswamy said.

He disclosed that the forensic audit reports on the Treasury bond and EPF transactions since 1998 will be submitted to the Attorney General and necessary legal action will be taken thereafter.

BDO India and KPMG are conducting the forensic audits and five of those audits began in April this year.

Most of those audits are to be completed in two to three months and the longest audit will take at least six months for its completion, Dr Coomaraswamy previously announced.

The Cabinet Tender Committee appointed to select prospective bidders has awarded contracts to BDO India and KPMG at an agreed payment of Rs.250 million and it was approved by the Cabinet on March 6 this year, official sources said.

These forensic audits were recommended by a Presidential Commission of Inquiry into the alleged bond scams in 2015 and 2016, and will also cover earlier periods since 1998, when bonds were issued outside auctions.

Holding a forensic audit examination on the EPF involvement in Treasury Bonds and Treasury Bills transactions from 2008-2014 was also recommended by the Commission.

An amendment to the Civil Procedure Code is being contemplated to expedite legal action to recover the massive loss of Rs. 1.6 billion to the government, Presidential Secretariat sources said.

The Attorney General will look into the possibility of passing a separate Act in Parliament to recover the loss to the government and the EPF avoiding delays in court procedure.

New laws will be introduced to empower the Central Bank to prevent reoccurrence of similar incidents in the future.