Reflection

Investigating Sakvithi, Golden Key, Ponzi Schemes and Financial Pyramids

The fact that the media has been awash with stories about the now-notorious Sakvithi, Danduwam Mudalali and Golden Key rackets and a whole bunch of associated scams has elicited the usual (lame) responses from those who should know better, “Caveat Emptor (Buyer Beware)” being a premier one among them.

However, one of the facts that some of the media appeared not to cotton onto was the fact that the government and its agencies, primarily the Central Bank in this instance, had a responsibility to police the operation of financial institutions.  They should have ensured that legislation existed that prevented the emergence of such shenanigans. 

Legislation needed to have been in place to ensure that those practicing such scams were brought to book before the illegalities reached a catastrophic stage such as that which the Ceylinco/Golden Key scandals have visited upon the financial markets of Sri Lanka.

This is not being wise after the fact because this is not the first time that pyramid schemes and the like have occurred in the financial sector in Sri Lanka.

Leave alone prevention, corrective action didn’t happen till the horse had bolted the stable and then only by the arrests of a few operatives who had not been agile enough to decamp.

What was even more conspicuous by its absence was media attention to the fact that, at the time the current governor of the Central Bank assumed office, some of the print media alleged that he had been associated with a business entity that was running a Pyramid (Ponzi) operation and that the Central Bank did, at that time, have a special unit which had been appointed with the specific responsibility of investigating this matter.

Disbanded

Shortly after Nivard Cabraal assumed his new and very powerful position, the newspapers again reported, this special unit had been disbanded.

That the Central Bank has been remiss in carrying out its fiduciary duties to the public hardly seems surprising given this train of events.

Calling for a comprehensive inquiry into all of this would be more than appropriate in the circumstances.  Or would that be too much like calling upon Colonel Harlan Sanders to ensure the longevity of the chickens of Sri Lanka?   Even if such a Commission of Inquiry were to be instituted, would it only result in yet another statement from the authorities concerned that “three special teams had been formed to investigate these matters,” not one of them being heard from ever again?

But, while all of this seemingly bears relevance to the issues under discussion, what it really constitutes is dealing with the associated symptoms and not with the primary problem.

That problem is a culture of impunity and entitlement that has a simple philosophy: “Anything is permissible as long as you have the ‘right connections’ to get away with it.”

That philosophy has been exemplified by the number of people with serious criminal charges hanging over their heads who have been elevated to the level of ministers.

That philosophy has been exemplified by people who can accurately be described as the government’s Praetorian Guard of toughs who have consistently (both them and their progeny) been afforded protection that can accurately be described as coming from the upper echelons of the government.

That philosophy has been exemplified by the disappearances of a number of people, when the government’s response has been denial or the provision of excuses that are insulting to the average person’s intelligence.

Stock response

That philosophy has been exemplified by the stock response to every new outrage committed against those seen as opposed to the government: the alleged appointment of “special investigative teams” after which nothing further is heard.

That philosophy has been exemplified by every accusation against the government being met with threats and demonisation of those seen as being in opposition to it.

That philosophy has been exemplified by the elevation to cabinet rank by the government of the day of the man widely believed to have been primarily responsible for the cold-blooded execution of more than 600 police officers of the Sri Lankan state.

There is truly a culture of entitlement (to anything and everything that power can provide) abroad in the land. 

The practice of the culture of impunity speaks loudly and clearly to the fact that the law of the land is not applicable to a select (privileged) number of the citizenry of this country even when they are in blatant contravention of that law.

In these circumstances, how can the average law-abiding citizen without access to the powerful in government expect their hard-earned savings to be safe in financial entities owing their existence to government statute?

Right to life

In these circumstances, how can the average law-abiding citizen without access to the powerful in government expect to have their property secure from the plunder of those with the ‘right connections?’

In these circumstances, how can the average law-abiding Sri Lankan without access to the powerful in government even be certain of the ultimate human right, the right to life?

This is the frightening reality of life in Sri Lanka today and it behoves those who believe in the need for a civil and law-abiding society to lobby and appeal to everyone in authority, particularly an Executive President riding the crest of a wave of popularity, to ensure that such a society becomes, once again, the reality of life in Sri Lanka.