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SLFP News conference draws focus on the Bond Scam

Minister Susil Premjayantha
The SLFP yesterday alleged that the process adopted by the Central Bank during Arjuna Mahendran’s tenure as its Governor to raise funds for the government through Perpetual Treasuries owned by his son-in-law Arjuna Aloysius had been seriously flawed and largely contrary to the mechanism in place in respect of issuing of bonds.

Referring to the report prepared by a Special Parliamentary Investigation Committee that probed the alleged insider trading and favoritism in the mega treasury bond issue of February 2015 and the one compiled by Committee on Public Enterprises (COPE) headed by JVP MP Sunil Handunetti, Science, Technology and Research Minister Susil Premjayantha explained the circumstances under which those in authority at Mahendran’s behest exploited the system.

Investigation took place in the presence of the Auditor General to ensure legitimacy to the process at the highest level.

The alleged first bond scam had taken place during President Maithripala Sirisena’s 100-day project.

Former UPFA General Secretary and SLFP National Organiser Premjayantha asserted Mahendran’s direct intervention on behalf of Perpetual Treasuries.

Sports Minister Dayasiri Jayasekera, a member of the COPE, asserted that Mahendran shouldn’t have accepted the post of the Governor as his son-in-law functioned as one of the 16 primary dealers tasked with raising funds for the government.

Addressing the media at SLFP head office at T.B. Jayah Mawatha, Ministers Premjayantha and Jayasekera explained that a comprehensive no holds barred investigation was required to ensure financial stability. They emphasized pivotal importance of taking tangible measures to restore confidence in the public and also to rectify shortcomings in the system.

The SLFP called special media briefing on the eve of the release of the COPE report on the alleged bond scam.

Minister Premjayantha said the subject of the probe had been a 30-year bond auction for Rs.1 billion on February 27, 2015. The CB had received 26 offers amounting to Rs. 20.78 billion, with Perpetual Treasuries and the Bank of Ceylon (BoC) on behalf of the controversial primary dealer making significant offer. This paved the way for the Central Bank Governor to accept Rs. 10 billion.

Minister Premjayantha said that the Superintendent of the Debt Department and his Deputy had turned down a request from the then Governor to accept Rs 20 bn resulting in the Central Bank settling in for Rs 10 bn.

Perpetual Treasuries had received 50 per cent share of this amount, Minister Premjayantha said, adding that though the report prepared by the Special Parliamentary Investigation Committee couldn’t be tabled in parliament due to dissolution of parliament in mid 2015, MP Handunetti’s COPE examined it.

Minister Premjayantha asserted that the two reports were basically compatible. The former Bank of Ceylon employee said that the issue was why Central Bank ended up accepting Rs 10 bn after going for a 30-year bond auction for Rs.1 billion.

Minister Jayasekera said that the SLFP believed that in addition to a thorough investigation into alleged bond scams during Mahendran’s tenure as the Central Bank Governor, his predecessors, too, should be investigated.

During the investigation under taken by Dew Gunasekera’s Committee it also transpired that former Governor Ajith Nivard Cabraal’s sister had been a director at the Perpetual treasuries and the UNP at that time routinely accused clandestine relationship between the Central Bank and the firm.

Minister Premjayantha also alleged that Mahendran had altered interest rates without prior permission from the Monetary Board.

Responding to media queries, Premjayantha, Jayasekera as well as Petroleum Industries Development Minister Chandima Weerakkody alleged that the entire process had been manipulated by influential interested parties hell bent on securing unfair profits at the expense of the national economy.

SLFP spokesmen said that they couldn’t comprehend massive profits made by Perpetual Treasuries much bigger than those others in the banking and insurance sectors.

Last year, a three-member committee comprising party lawyers appointed by the UNP-led government cleared Mahendran of any wrong doing while recommending remedial measures to rectify shortcomings in other institutions involved in the process.
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