Treasury bond scams ‘mother of all problems’
Posted on January 2nd, 2019

By Shamindra Ferdinando Courtesy The Island

Speaker Karu Jayasuriya recently asserted that the relationship between President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe turned sour in the run up to the last local government polls in Feb 2018. Jayasuriya said so addressing religious leaders at his official residence, on Dec 26, 2018.

A statement issued by the Speaker’s Office, on Dec 28, 2018 quoted Jayasuriya as having said that he, at every possible opportunity, intervened to improve the situation as he realized the disastrous consequences of such a clash. Claiming that he realized the danger at an early stage, Jayasuriya confirmed President Sirisena offered him the premiership on several occasions.


Jayasuriya emphasized that he didn’t want to accept the premiership as they received a mandate for Sirisena to be the President and Wickremesinghe to be Prime Minister.

The Speaker’s Office statement, issued in Sinhala, dealt with issues at hand, particularly the proposed abolition of the executive presidency.

Unfortunately, Jayasuriya has conveniently forgotten the circumstances, leading to the damaging battle between Sirisena and Wickremesinghe. Those present there, on the invitation of Jayasuriya, refrained from reminding the gathering what was the mother of all yahapalana problems.

Nothing can be further from the truth than Jayasuriya’s claim that Sirisena – Wickremesinghe relations turned sour in the run up to the last local government polls. Obviously, Jayasuriya has turned a blind eye to the bond scam, perpetrated on the morning of Feb 27, 2015, allegedly by the then Governor of the Central Bank, Singaporean Arjuna Mahendran, and his son-in-law, Arjun Aloysius, the owner of primary dealer Perpetual Treasuries Limited (PTL). The UNP has been accused of providing the political backing for the heist.

The first bond scam, perpetrated 50 days after the last presidential election, is the mother of all problems for the Sirisena-Wickremesinghe government. The new administration never really recovered from the unprecedented treasury bond scam, though President Sirisena went out of his way to protect the interests of the UNP, for about a year.

At the time of the first bond scam, Jayasuriya functioned as Minister of Public Administration, Democratic Governance and Buddha Sasana. Chamal Rajapaksa was the Speaker. Jayasuriya cannot be unaware how the treasury bond scam caused a massive rift between the UNP and the SLFP, both in and outside parliament. The crisis created by the treasury bond scam certainly caused a debilitating setback to the 100-day government and gave a turbo boost to the group led by twice President, Mahinda Rajapaksa. The UNP should examine the impact of the first treasury bond scam, on the 100-day government, and how the second fraud, committed in late March 2016, ruined everything. At the time of the second bond scam, Jayasuriya was the Speaker and, therefore, he knew the deterioration of the UNP-SLFP relationship long before the Feb 2018 local government polls.

Chronology of events

Let me mention key events relating to the ‘mother of all problems’ against the backdrop of the Presidential Secretariat accusing parliament of deliberately thwarting an accelerated investigation into the treasury bond scam. Following a meeting at the Presidential Secretariat on Dec 21, 2018, President Sirisena had with senior officials involved in the treasury bond scams probe, the media was told how the relevant Parliamentary oversight Committee deliberately sabotaged President Sirisena’s efforts to have those responsible for treasury bond scams punished. President Sirisena cannot, under any circumstances, absolve himself of the responsibility for the second far bigger bond scam perpetrated, due to him dissolving parliament on the night of June 26, 2015 to prevent the Committee on Public Enterprises (COPE) Chief Dew Gunasekera from presenting the report on the first scam.

Jan. 8, 2015: Presidential election

Jan.9, 2015: Maithripala Sirisena sworn in as President

Jan.9, 2015: Ranil Wickremesinghe sworn in as Prime Minister

Jan.23, 2015: Then Finance Minister Ravi K recommended Arjuna Mahendan as Governor, CBSL

Jan. 26, 2015: President Sirisena appointed Singaporean Mahendran as Governor, CBSL.

Feb. 26, 2015: Mahendran met ministers, Ravi K, Kabir H and UNP Chairman Malik S at CBSL, allegedly to discuss a massive fund requirement of Rs 18 bn (All three politicians were present when President Sirisena lambasted the UNP over treasury bond scams on Dec 16, 2018 at the Presidential Secretariat. PM Wickremesinghe and Mrs Wickremesinghe were also present.)

Feb 27, 2015: First bond scam perpetrated. Within hours, those who mattered knew how PTL had carried out the operation in connivance with Mahendran. The PTL is a fully owned subsidiary of Perpetual Capital (Pvt) Limited, owned by Geoffrey Joseph Aloysius and Arjun Joseph Aloysius. The Central Bank was under the purview of Premier Wickremesinghe, though previously it functioned under the Finance Ministry.

Massive media coverage of the bond scam sent shock waves through the Sirisena-Wickremesinghe government. President Sirisena directed his party to lodge a complaint with the CIABOC. The high profile institution, handling of that particular inquiry, should be examined for obvious reasons.

March 10, 2015: Wickremesinghe, following consultations with Sirisena, appointed a three-member committee to probe the issuance of treasury bonds. The committee comprised those considered UNP loyalists i.e. attorney-at-law Gamini Pitipana, attorney-at-law Mahesh Kalugampitiya and attorney-at-law Chandimal Mendis. (Wickremesinghe thereby thwarted Sirisena from appointing a Commission by naming his own)

May 21, 2015: The Joint Opposition requested Speaker Chamal R to call a special debate on the bond scam.

May 22, 2015: Special Sub Committee of CoPE appointed to probe the Feb 27, 2015 issuance of treasury bonds. The 13-member Sub Committee had its inaugural meeting on the same day under the chairmanship of Dew Gunasekera.

The committee comprised Chairman of the Committee on Public Enterprises (COPE) and General Secretary of the Communist Party, D.E.W. Gunasekera, UPFA MP Susil Premajayantha, Minister of Health and Indigenous Medicine Rajitha Senaratne, UPFA MP Lasantha Alagiyawanna, Democratic National Alliance MP Sunil Handunetti, Minister of Ports, Shipping and Aviation Arjuna Ranatunga, UPFA MP Hassan Ali, Deputy Minister of Highways and Investment Promotion Eran Wickramaratna, Prof. Rajiva Wijesinha, Deputy Minister of Justice Sujeewa Senasinghe, UPFA MP Weerakumara Dissanyake, Illankai Tamil Arasu Kadchi (ITAK) MP E. Saravanapavan and State Minister of Child Development Rosy Senanayake (Sujeewa Senasinghe was later exposed as one of those lawmakers to receive money from the PTL. Senasinghe recently received a promotion with his appointment as a non-cabinet minister).

Parliament had never before appointed a special committee comprising members of COPE to investigate a specific allegation against a senior state official.

May 26, 2015: Probe commenced with Treasury Secretary Dr. R.H.S. Samaratunga and Director General, Department of Treasury M.S.D. Ranasiri being questioned (Later it was revealed Samaratunga took part in a discussion when Ravi K issued controversial directives to state bank officials pertaining to issuance of treasury bonds).

June 18, 23, 2015: CoPE questioned Mahendran. The Singaporean was the last to appear before the committee.

June 25, 2015: Wickremesinghe alleged CoPE denied him of an opportunity to appear before the watchdog. (In terms of the Standing Orders, ministers cannot be summoned before COPE.  Parliament is yet to make required amendments to allow ministers to appear before the watchdog committee. Jayasuriya, as well as leaders of all political parties, represented in parliament, owed an explanation as to why changes weren’t made so far)

June 26, 2015: Sirisena dissolved parliament to thwart CoPE presenting its report on treasury bond scam. General election set for Aug. 17, 2015. (President Sirisena paid a very heavy price for his action).

The dissolution prevented the CoPE Chairman Dew Gunasekera from presenting his report on the first treasury bond scam. In a related action, UNP Deputy Justice Minister Sujeewa Senasinghe moved court to bar Gunasekera from releasing his report to the media.

The writer sought an explanation from Gunasekera, in January this year, at a media briefing, as to the responsibility of Sirisena and the SLFP in the second bond scam, perpetrated on March 29, 2016. Asked whether, a far bigger second treasury bond scam could have been prevented if not for the dissolution of parliament in June 2015; Gunasekera said that question should be posed to President Sirisena as he had done so.

Much respected veteran politician Gunasekera explained the unacceptable growth achieved by PTL at the briefing held at the Communist Party headquarters, Borella. “Let me explain the phenomenal growth of PTL since its establishment in 2013 during the previous administration. Having launched operations with Rs. 300 mn as capital, how could PTL manage to obtain Rs. 11 bn in profits in such a short period?”

June 28, 2015: The writer in an exclusive story based on Dew Gunasekera’s suppressed report headlined ‘COPE inquiry finds Mahendran had intervened in bond issue’ in the June 28 edition of The Sunday Island dealt with Mahendran’s clear complicity in the first scam.

The report drew an angry reaction from the UNP in the wake of Sirasa giving heavy coverage to The Sunday Island report. The ruling party insisted that it be given immediate opportunity to counter The Sunday Island report. Senasinghe and Mahendran told the writer there was no basis for the Dew Gunasekera report. Senasinghe flayed Dew Gunasekera for playing politics and making a despicable bid to undermine the UNP for the advantage of a section of the SLFP (Bond scam: UNP rejects COPE report as biased with strap line ‘Govt. MPs did not endorse the document’-The Island, June 29, 2015).

July 3, 2015: Dew Gunasekera declared that Sirisena could take tangible action on what he called ‘dossier of evidence’ produced by his committee. Gunasekera asserted that Sirisena could call for a copy of the 447-page report from the Secretary General of parliament W.B.D. Dissanayake. The writer covered the briefing at the Sri Lanka Foundation Institute where the Communist Party chief explained how those responsible for the worst financial scam here could be dealt with (COPE bond scam probe: Prez can act on evidence-The Island, July 4, 2015). President Sirisena choose not to do anything. He was determined to ensure the UNP’s victory at the parliamentary polls. The President, obviously believed in continuing with his marriage of convenience with the UNP at any cost.

Aug. 17, 2015: Parliamentary polls.

Sept. 4, 2015:– Malik Samawickrema appointed Development Strategies and International Trade Minister in spite of him never being in parliament or at any level of political structure (Local Government or Provincial Council). Jayasuriya appointed as the Speaker.

Nov. 27, 2016: COPE reconstituted with JVP MP Sunil Handunetti as its Chairman.

March 29, 2016: Second far bigger bond scam perpetrated. The Central Bank was still under Premier Wickremesinghe. Jayasuriya functioned as the Speaker at the time of the second fraudulent transaction. The COPE, headed by Handunetti, was inquiring into the first treasury bond scam. Some UNPers in Handunetti’s committee later that year tried to interfere with the final report. Hope readers hadn’t forgotten about the so-called ‘foot note’ gang.

June 29, 2016: Sirisena visited the CBSL much to the discomfort of Wickremesinghe and Mahendran. Recently, President Sirisena revealed how Wickremesinghe tried to discourage him from visiting CBSL.

July 2, 2016: Renowned economist Dr. Indrajith Coomaraswamy succeed Mahendran as Governor of CBSL after Wickremesinghe made an abortive bid, with the support of Karunanayake, to secure Sirisena’s approval for Charitha Ratwatte to be appointed to the post. But disgraced Mahendran remained in Wickremesinghe’s entourage.

January 27, 2017: Sirisena appoints P-CoI consisting of Supreme Court Judges Kankanithanthri T. Chitrasiri and Prasanna Sujeewa Jayawardena and former Senior Deputy Auditor General Kandasamy Velupillai to probe bond scams.

Aug. 2, 2017: Karunanayake humiliated at P-CoI over the lease of a fifth-floor super luxury condominium apartment at the Monarch Residencies that was allegedly paid for by Arjun Aloysius.

Aug. 10, 2017: Foreign Minister Karunanayake resigned in the wake of shocking revelations at the P-CoI. Karunanayake received the foreign ministry portfolio on May 25, 2017. Karunanayake switched portfolios with Mangala Samaraweera. This took place amidst accusations as regards Samaraweera’s handling of the accountability process. Samaraweera earned the public wrath for co-spnsoring Geneva Resolution though it was a policy decision of the Sirisena-Wickremesinghe government. The SLFP cannot absolve itself of the responsibility for the Geneva Resolution adopted on Oct 1, 2015.

Nov 16, 2017: Evidence at the Bond Commission revealed how Arjun Aloysius had been in touch with some members of the COPE during its hearings.

Aloysius had spoken a total of 227 times to Sujeewa Senasinghe, 18 times with Dayasiri Jayasekara, 176 times with Harshana Rajakaruna and 73 times to Hector Appuhamy during the period commencing January 2015.

Nov 20, 2017: Wickremesinghe received kid glove treatment at P-CoI with AG Jayantha Jayasuriya assigned to question him. But Wickremesinghe’s affidavits received by P-CoI in response to questions sent to him by the P-CoI and the AG’s department and PM’s responses to AG Jayasuriya established the UNP’s leader’s complicity and failure to thwart the scams beyond doubt. However, Wickremesinghe and the UNP have repeatedly denied involvement whatsoever in bond scams.

Dec 30, 2017: P-CoI report handed over to Sirisena.

Jan. 4, 2018: Sirisena addressed the nation regarding the P-CoI report. Sirisena mounted a devastating attack on the UNP over treasury bond scams in the run-up to the Feb. 10 local government polls. Sirisena’s strategy caused heavy damage to the UNP at the Feb. 10 polls. Sirisena’s relationship with Wickremesinghe suffered irreparable damage due to Sirisena’s verbal attacks. Jayasuriya recent remarks at a meeting with religious leaders meant that the senior UNPer had conveniently forgotten what led to Sirisena’s attacks on Wickremesinghe in the run up to the local government polls in Feb 2018.

Feb 04, 2018: Arjun Aloysius and Chief Executive Officer of PTL Kasun Palisena arrested. They are still in remand pending investigations.

Feb. 10, 2018: UNP and SLFP suffered debilitating setbacks at the long delayed local government polls. Their sidekick JVP too suffered heavy defeat.

Feb. 19, 2018: Constitutional expert Dr. Jayampathy Wickremaratne, on behalf of the United Left Front (ULF) asserted Wickremesinghe role in bond scams – the third primary reason for the humiliating defeat suffered at the Feb. 10 polls.

March 28, 2018: Sirisena removed Central Bank and the Securities and Exchange Commission from Wickremesinghe’s purview -1,125 days after the first bond scam and 727 days after the second bond scam. President Sirisena owned an explanation as to why he waited so long to act.

April 04, 2018: Wickremesinghe comfortably defeats a No-Confidence Motion (NCM) moved by the Joint Opposition and the SLFP against him by a majority of 46 votes. A total of 122 voted against the NCM, 76 for and 26 abstained (24 SLFP lawmakers and two CWC).

Strangely throughout this period, Western powers conveniently refrained from publicly commenting on the bond scam though they worked overtime to discredit the previous Rajapaksa administration with the US pledging to help Sri Lanka recover stolen funds. India also pledged to assist yahapalana efforts.

In fact, the current political leadership certainly owed an explanation to the public as to how Mahendran, Aloysius and PTL CEO Kasun Palisena had committed the second bond scam, 13 months after the first. Obviously, they had been so sure that nothing could go wrong. Most probably, they believed Mahendran was going to have his own term as the Governor after having completed the period allocated to his predecessor Ajith Nivard Cabraal. Cabraal quit immediately after the Jan 2015 presidential polls.

The public should be grateful to former CBSL Senior Deputy Governor Dr W. A. Wijewardena, and the media for relentlessly pursuing the treasury bond scams.

Primary dealer PTL receiving prior information as regards the CBSL’s last minute decision to issue treasury bonds to the value of Rs. 20 bn in spite of its initial call for bids for only Rs 1 bn worth of 30-year treasury bonds has been established beyond doubt now.

Treasury bond scams fallout

Treasury bond scams and the UNP’s determination to pursue neo-liberal economic policies ruined the Sirisena-led administration. Jayasuriya’s comment on the deterioration of President Sirisena’s relationship with Wickremesinghe meant their reluctance to come to terms with the undeniable truth. The President had no option but to explore the possibility of replacing Wichremesinghe with Sajith Premadasa, Karu Jayasuriya, or Ranjith Madduma Bandara, due to disruption of his political alliance with the UNP leader. President Sirisena had the guts to declare, in the presence of Mahinda Rajapaksa that he swore in the former President as the Premier as three UNPers refused to accept the challenge. Although Wickremesinghe managed to secure his premiership back on Dec 16, 2018, President Sirisena seems hell bent on pursuing the treasury bond scam probe. The Presidential Secretariat statement the writer referred at the top of this piece is evidence that President Sirisena intends to go the whole hog. President Sirisena, having rapped the parliament for blocking his efforts to expedite the judicial process against those responsible for treasury bond scams, demanded that those responsible pursue the matter without further delay. The Presidential Secretariat also pointed out the failure on the part of Singapore to extradite Mahendran in spite of Sri Lanka making a formal request.

With presidential and parliamentary polls scheduled for 2019 and 2020 in addition to Provincial Council polls, treasury bond scams will certainly dominate the media, certainly much to the disappointment of those determined to hush up the GREAT CENTRAL BANK ROBBERY.

(To be continued on January 09)

2 Responses to “Treasury bond scams ‘mother of all problems’”

  1. Christie Says:

    1 It is not a Scam.

    2. It is Criminal Fraud.

    3. A paid employee has used his position to gain benefits that he is not entitled to using his trusted position.

    Whether it is a Capitalist (USA) or Socialist (DPRK) society such fraud is punished.


    A. By 1 March 2015 all those involved should have been arrested, their assets frozen and investigation and prosecution should have started.

    B. Sirisena should have resigned as he failed his Good Governance promise.

    Instead it all has become a political foot ball.

    It has to be the expected outcome because the fraudster is part of the Indian Colonial Parasites Cabal in the world.

  2. Randeniyage Says:

    “June 26, 2015: Sirisena dissolved parliament to thwart CoPE presenting its report on treasury bond scam. General election set for Aug. 17, 2015. (President Sirisena paid a very heavy price for his action).”

    If Sirisena was honest as he claims now he wouldn’t have done that. Not only that, he did EVERYTHING to bring RW to power. He did everything to deny UPFA becoming a proper opposition. It is what Sirisena wanted and he cannot make false complaints now. He had executive power throughout.

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