Former Central Bank Governor Ajith Nivard Cabraal stated before a three-judge High Court bench in Colombo that the decision to invest funds in Greek bonds was based on a nine-point report submitted by the Director of International Operations of the Central Bank.
He made this statement while testifying in a case concerning an alleged loss of Rs. 1.8 billion to the government resulting from the investment in Greek bonds.
He informed the court that he had no intention whatsoever of causing a loss to the government, and that the investment was made following a collective decision by senior officials—including the Director of International Operations—who had articulated the rationale for investing in bonds issued by the Greek and Irish governments.
The former Central Bank Governor further noted that no official raised any objections to the investment in Greek bonds, nor were any dissenting notes submitted regarding the matter. The case is being heard before a bench comprising Manoj Thalgodapitiya (Chairman), Udesh Ranatunga, and Buddhika Sri Ragala.
Responding to questions posed by President’s Counsel Dilan Ratnayake, appearing for the defense, Cabraal stated that he qualified as a Chartered Accountant at the age of 22 and that the Central Bank recorded a profit in 2011, during his tenure as Governor. He further noted that foreign reserves, which stood at US$ 2 billion when he assumed office, had grown to US$ 8 billion by the time he stepped down.
He also stated that it has been established that investments in Greek and Irish bonds accounted for only about 0.6 percent of the total foreign reserve portfolio.
He further remarked that investments in gold and other assets were measures taken to minimize or offset losses, and that incurring a loss on an investment cannot be construed as a criminal offense. He further stated that, under the Monetary Law Act, the Governor of the Central Bank is entitled to legal immunity.
This case has been filed by the Commission to Investigate Allegations of Bribery or Corruption.