Bondgate the political roller coaster
Posted on January 30th, 2017

By Ruwan Laknath Jayakody Courtesy The Nation

The Joint Opposition said that the next course of action they were considering taking with regard to the Central Bank Treasury bonds issue was to file a writ of mandamus in the Court of Appeal.

The issue reportedly involves former Governor of the Central Bank, Arjuna Mahendran and his son-in-law Arjun Aloysius who is involved with primary dealer Perpetual Treasuries.

Member of Parliament Vasudeva Nanayakkara reiterated that he had filed complaints with the Commission to Investigate Allegations of Bribery or Corruption, the Inspector General of Police and the relevant crime detection departments while anticipating that investigations would unfold in the course of time.

tableHe added that as long as Prime Minister Ranil Wickremesinghe, remained in his current position nothing would take place in this regard.

The issue with filing a writ seeking to get a particular directive with regard to urging investigations to be forge ahead, is that respondents to the case (the Commission and the Police) would inform the Court that investigations were ongoing and that they required time in which case the Court might be prompted to ask those who filed the writ to bide the time for a while.

Therefore, in order to obtain an order making it mandatory for the Commission and the Police to act would require concrete information regarding how the investigations were being conducted.

Perpetual Treasuries has not been struck off the list of primary dealers despite having engaged in insider dealing. They are currently trading. The money they make does not stay stuck in one place as the amounts get larger and larger. The financial capital moves (even overseas) and therefore becomes impossible to trace.

Thus, action taken in this regard is already late. The Central Bank can take certain limited action without waiting for a Court pronouncement by halting trade of, Perpetual Treasuries.

Chairman of the Committee on Public Enterprises (COPE) MP Sunil Handunnetti earlier said that they probed the Central Bank Bond transactions for the years 2015 and 2016, and in the process it was evident that Mahendran, had an influence with regard to the Treasury Bond issue of February 27, 2015 which was rigged to benefit Perpetual Treasuries.

This was expressed by him on October 28, 2015 when the report was tabled in Parliament. He went on to say that the committee had recommended that the officials accountable for these transactions should be brought before the law and punished. He also said that COPE recommended for the establishment of a proper mechanism that would ensure credibility and transparency in transactions of this nature.  In this regard, COPE recommended amendments to the existing laws dealing with the said matter.

Minister of Public Enterprise Development, Eran Wickremaratne, last week following the parliamentary debate on the bond scam said that the matter has been directed to the Attorney General.

However, President Maithripala Sirisena claimed that the report was sent to the AG’s Department without seeking Parliamentary approval.

Subsequently the Prime Minister’s Office had said, the AG had recommended that legal action could be instituted against Mahendran and Perpetual Treasuries as criminal as well as civil cases related to the CB Bond scam.

Meanwhile, on Thursday it was reported that the Central Bank had placed controls on distributing assets of Perpetual Treasuries. It was also reported that the government was prepared to enact new laws enabling the confiscation of any ill-gotten gains if the court finds Perpetual Treasuries guilty for any allegations levelled against them.

Meanwhile, Central Bank had decided to restrict transactions made from bank accounts belonging to Perpetual Treasuries Limited.

In addition, the President had instructed the TRC to disallow the transfer of ownership of radio and television channels without him being notified.

This comes in light of media reports that monetary gains from the Bond issue may be invested in certain media organization.

Despite government assurances to the contrary, the civil society anti corruption organizations provided documentary evidence attesting to Mahendran’s continued involvement as an advisor to the Ministry of Finance.

One Response to “Bondgate the political roller coaster”

  1. Sooriarachi Says:

    Reading about the way this scam eventuated, it seems it had been pre-planned and persons at the highest level involved and trying their best to cover this up. They have already delayed a proper investigation by over two years since the first of the two Treasury Bond issues. I think Vasudeva Nanayakkara is right to believe, nothing would happen as long as the present Prime Minister has a say in this matter. Otherwise , how can “Mr Clean” ignore all these allegations against the former Governor of the Central Bank, and appoint him as a consultant to the Finance Ministry, after his position as Governor was not extended. Is this adding insult to the injury done to the nation?

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