Private and Confidential

Date 5 May 2022
The President and the members of the Council
The Institute of Chartered Accountants of Sri Lanka
30A Malalasekara Mawatha
Colombo 7

Dear Sirs/Madams,
PROFESSIONAL CONDUCT AND ETHICAL BEHAVIOUR OF MR. AJITH NIVARD CABRAAL, FCA

The Institute of Chartered Accountants of Sri Lanka (‘CA Sri Lanka’) is the National Professional Accountancy Organisation, and stakes claim to being the preferred and recognised destination for accountancy education in Sri
Lanka.

Members of CA Sri Lanka are globally recognised and are identified as a brand of unique and versatile professionals, with the ability to steer any business successfully. CA Sri Lanka has produced over 7,000 members, who are recognised for their professional integrity, exceptional technical and perceptive skills, as well as financial discipline and out of the box thinking, which helps them add value to their organisations and where they live.

CA Sri Lanka takes great pride in being the change makers of Sri Lanka’s Accounting arena and plays a vital role to ensure the Accounting profession continues to be an important catalyst in the success of Sri Lanka. This is achieved through the exceptional quality, professional competence, ethical behaviour and integrity of our members. The dignity and the global recognition of CA Sri Lanka is a direct reflection of the professional conduct and ethical behaviour of its members.

We, the undersigned being CA Sri Lanka members residing outside of Sri Lanka are seriously concerned about the perceived allegations levelled against one of our fellow members, Mr. Ajith Nivard Cabraal (membership number 690), (referred to as ‘he/him/his/the member’ hereafter), former Governor of Central Bank of Sri Lanka in the public domain. The alleged misconduct has been committed while he was carrying the flag of our prestige institute, CA Sri Lanka.

We strongly believe and kindly request that CA Sri Lanka shall take immediate actions against this member based on the provisions of the Institute of Chartered Accountants (Amendment) Act No. 15 of 1998 (‘the Act’). Timing of the actions and the decision taken by the President and the members of the Council in this regard may have a direct impact in maintaining the goodwill and the global standing of CA Sri Lanka as the pioneer accounting body in Sri Lanka.

We further note that the President and the members of the Council has the duty and the responsibility to secure the maintenance of professional standards among members of CA Sri Lanka and to take such steps as may be necessary to acquaint them with the methods and practices necessary to maintain such standards as per the Act.

Some of the alleged professional and ethical misconduct committed by Mr. Ajith Nivard Cabraal (FCA, 690) are given below. Refer to the following links for evidence and further details of the activities.

1. Willingly and/or knowingly participating in political activities which are seemingly detrimental and harmful to Sri Lanka and its citizens;
2. Significant breach of ethical principles in relation to insider dealings, conflict of interest and using power of the role as the Governor of the Central Bank of Sri Lanka and covering in committing these alleged activities;
3. Identifying as a key suspect of the Central Bank bond issuance activities and allegations that the member and his close connections have been making financial and other benefits out of the fraudulent activities;
4. Abusing public funds during his tenure as the Governor of the Central Bank (Mr. Cabraal has been summoned before the Colombo Magistrate’s Courts for this matter);
5. There are various allegations that, he has misused his authority as the Governor of the Central Bank, for his personal political advantage causing enormous damages to the Sri Lankan economy.
6. Involving and directly contributing artificially suppress the value of the United States Dollars (USD) against Sri Lankan rupees, creating a huge black-market for USD and other international currencies, and significantly devaluing the Sri Lankan rupees.
7. During late 2021 and early 2022, the member has authorised to print large sums of Sri Lankan rupees resulting increased inflation in Sri Lanka. As a Governor of a Central Banks and a Chartered Accountant he has made disgraceful, misleading and factually incorrect public statements indicating that there is no adverse impact of printing large amount of money on inflation of the country. This is a clear example of his dishonesty and disrespect to the duty of care and ethical standards that all our prestigious members are bound to follow.

Please note that this is not an exhaustive list of the professional misconduct committed by the member and we believe are reasonably sufficient for commencement of an investigation and taking disciplinary actions by the President and the members of the Council against the member.

The Act has the provisions, and accordingly the Council may disenroll any individual who is a member of the Institute, if satisfied that he is unfit to practice the profession of an accountant and auditor by reason that he has been guilty of professional misconduct. The above activities performed by the member appears clearly that the member is unfit to practice as a professional accountant and meets the definition of professional misconduct as defined within the schedule 2 of the Act.

We believe and understand that the legal system and Courts in Sri Lanka will proceed with actions on the breaches of legal responsibility as the Governor of Central Bank of Sri Lanka and any other allegations about the misuse of Public Funds in Sri Lanka.

We strongly believe that Mr. Cabraal has publicly violated the following mandatory ethical standards stipulated in the CA Sri Lanka Code of Ethics 2020.

• Subsection 111 - Integrity
• Subsection 112 - Objectivity
• Subsection 113 - Professional competence and due care
• Subsection 115 - Professional behaviour
• Section 230 – Acting with sufficient expertise
• Section 250 – Inducements including gifts and hospitality
• Section 260 – Responding to non-compliance with laws and regulations

Our concern is that unethical behaviour and professional misconduct of this member may result in damaging the goodwill and the global recognition of CA Sri Lanka and its members.

Therefore, to uphold the goodwill and the prestige reputation of CA Sri Lanka and its members, we kindly request the President and the members of the Council to take immediate action to initiate a disciplinary enquiry and take necessary steps as per the provisions in the Act.

We also kindly request to provide a written responses to this letter within 14 working days and keep us informed on the progress of this request and the outcome of the decisions taken by CA Sri Lanka.

EVIDENCE FOR PROFESSIONAL CONDUCT AND ETHICAL BEHAVIOUR OF MR. AJITH NIVARD CABRAAL, FCA
President and the members of the Council may consider and refer to information available at below sources and other evidence in conducting the disciplinary enquiry of Mr. Ajith Nivard Cabraal, FCA 690.

1. Court prevents Cabraal from traveling overseas
2. New CBSL Chief finds Cabraal’s exchange rate management faulty | Daily FT
3. https://lankatruth.com/en/?p=17940
4. Sri Lankas economy seen as a ticking time bomb
5. Money printing not responsible for price hikes price hikes: Cabraal
6. https://www.reuters.com/article/srilanka-combank-hedging-idUKCOL23756320081205
7. Hedging deal consigned to the dustbin?