Mahendran ignored Public Debt Dept warnings, went ahead with bond sales, officials tell COPE
Posted on July 7th, 2016

By Saman Indrajith Courtesy The Island

A group of Central Bank (CB) officials yesterday informed the Committee on Public Enterprises (COPE) that Central Bank Governor Arjuna Mahendran had claimed he acted on the instructions of Prime Minister Ranil Wickremesinghe as regards the controversial bond issue, according to a senior COPE.

The COPE met at 2.30 pm at the Parliamentary Complex and over 20 top CB officials including the incumbent Governor Dr. Indrajit Coomaraswamy were present.

The UNP members of the COPE had sought to exonerate Mahendran and to shift the blame to the officials, the COPE member told The Island. The top CB officials, too, should be held responsible for the massive loss caused by the bond deal because they had cooperated with Mahendran, the UNP MPs maintained.

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However, the CB officials had responded that Mahendran had proceeded with the controversial bond sales in spite of severe warnings from the Public Debt Department of the Central Bank, COPE member said.

The UNP MPs’ attempt to absolve Mahendran of the responsibility for the controversial bond auction on the grounds that it had been consequent to a policy decision by the government was countered by the Opposition MPs with the help of presentations made by the CB officials, according to another COPE member.

The officials insisted that there had been no such policy decision because the Monetary Board had not given approval for Mahendran’s action as regards the bond deal at issue. He had informed the Monetary Board of his move only after he had conducted the auction, the officials said.

Incumbent CB Governor Coomaraswamy remained silent during the meeting that lasted for three hours and answered a question raised by UNP MP Ranjan Ramanayake, who asked whether the latter would accuse his predecessor of having caused the loss making bond deal. The Governor responded that he would work with the CB officials and do the right thing to maintain the dignity of his office and he was yet to decide what had gone wrong and how it had happened, sources said.

COPE Chairman Sunil Handunnetti permitted the committee members to question the CB officials.

Of the 26 member COPE, 24 including Handunnetti attended yesterday’s meeting. Those present were Rauff Hakeem (SLMC), Anura Priiyadarshana Yapa (UPFA), Dayasiri Jayasekera (UPFA), Ravindra Samaraweera (UNP), Wasantha Aluvihare (UNP), Lasantha Alagiyawanna (UPFA), Dr Harsha de Silva (UNP), Ajith P. Perera (UNP), Ranjan Ramanayake (UNP), Ashok Abeysinghe (UNP), Anura Kumara Dissanayake (JVP), Lakshman Seneviratne (UPFA), Chandrasiri Gajadeera (UPFA), Bimal Ratnayake (JVP), Weerakumara Dissanayake (UPFA), Mavai Senathiraja (TNA), M.A. Sumanthiran (TNA), Hector Appuhamy (UNP), Dr Nalinda Jayatissa (JVP), Harshana Rajakaruna (UNP), S Sritharan (TNA), Abdulla Maharoof (ACMC), and Gnamutthu Srinesan (TNA). UNP MP Velu Kumar resigned at the previous meeting while MP Mahindananda Aluthgamage (UPFA) was absent.

The COPE is scheduled to meet again on August 16 and its members are expected to study the Auditor General’s report on the questionable bond eal and present their opinions on that day, according to sources.

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