Three-member committee on Treasury Bond scandal recommends Full Scale Probe
Posted on May 19th, 2015

By Gagani Weerakoon and Skandha Gunasekara Courtesy Ceylon Today

The three-member Committee appointed to investigate the Central Bank bond issue has called for a full-scale investigation by a duly authorized government authority since they have detected an unusual bidding pattern practised by Perpetual Treasuries, the firm that is owned by the son-in-law of the Central Bank Governor, Arjuna Mahendran adding that its securing 50 per cent of the accepted bids was also unusual.The report of the committee was tabled in Parliament yesterday by Leader of the House Lakshman Kiriella. The committee appointed by Prime Minister Ranil Wickremesinghe was chaired by Attorney-at-Law Gamini Pitipana and comprised attorneys-at-law Mahesh Kalugampitiya and Chandimal Mendis.

The committee has observed that the bidding pattern of Perpetual Treasuries at the bond auction in question was unusual for two reasons: a) considering their previous bidding patterns, bids amounting to

Rs 2,000,000,000 when the value of bond is Rs 1,000,000,000, b) seeking the assistance of BOC to forward bids amounting to Rs 13,000,000,000 given the fact that the value of the bond announced was one billion.”

“In the interest of the public since the said transaction involves public funds and fiscal regulations of the government, the committee is of the opinion that a full-scale investigation by a duly constituted government authority is warranted.

“The committee further observers that the Board of Directors of BOC shall initiate a full-scale investigation, and if necessary a forensic audit into the activities of the Dealer room of BOC, given the fact that it is a State bank. The committee further observes that the Board of Directors of the BOC may call explanation from the Chief Dealer and his superior officers with regard to ad-hoc decisions made considering the large portfolio of BOC funds that is involved as stated above.”
The committee has observed that “there is a serious lack of transparency pertaining to the activities of the PDD (Public Debt Department) of the CBSL (Central Bank of Sri Lanka).

There is no proper supervision of the activities between the primary dealers and the PDD. There is no recording of calls, there is no log of any documents received, no supervision of electronic footprint such as text messages and emails between the officials of the PDD and the primary dealers.”

“Since the PDD is dealing with the most sensitive information of the government, the committee is of the opinion that a proper supervisory and monitoring mechanism has to be immediately implemented with regard to the activities of the PDD and the primary dealers.

“The committee also observes that an internal document of the Central Bank that contains statistics that are highly confidential is in the public domain. The availability of the said document on the web, newspapers, private circulation, complete with all signatures of CBSL officials leaves room to doubt the sanctity of sensitive confidential information within a secure environment of the CBSL. The committee had been informed by the officials of the CBSL that no internal inquiry had been initiated upto date with regard to the question of the said document appearing in the public domain.

The committee said in the report that bonds that are issued are never closed, and the bonds issued several years before are re-adjusted on maturity period and privately placed many years later. “This amounts to lack of transparency and opening out for manipulation and suspicion.”

6 Responses to “Three-member committee on Treasury Bond scandal recommends Full Scale Probe”

  1. Christie Says:

    Namaste: If this happened in the USA or any other country Mahendran and Mahendran will be in Jail and all their assets sealed. Best example is their good frien and mentor as they claim Raj Rajaratnam jailed by the US for insider trading. Jai Hind

  2. Sirih Says:

    As I said before, go after BOC and how they approve these funds and who authorised these with out security, rest will fall in to a pattern and it will show the crooks chain in command.

  3. janakic Says:

    The bond saga is a complete fiasco. The investigation report is not much of a relief to the public as the need for a full investigation via the judicial system was pretty evident from day one of the scam. The rise in the interest rate appears to be a direct result of Mr. Mahendran’s (the Governor’s) instruction to move to market driven bond system instead of the 5% frozen monthly rate; Perpetual Treasuries (PT), the company belonging to the son-in-law of the Governor being the beneficiary for having secured 50% of the accepted bids; PT being aware of the fact that the Govt. would raise more money than the published Rs.1 billion allegedly from information in the public domain; the non divulgence of the public domain sources; the Governor taking leave during the relevant period; etc. are somewhat unusual to say the least.
    The Governor, as the Central Bank CEO needs to be accountable for the outcomes of the institution under his purview. Yet he continues to be in the position whereas Mr. Basil Rakapaksa being the Minister is in custody for the alleged transactions of the public servants!

  4. Kumari Says:

    Ali Baba (Ranil) and the forty thieves, never took over power to run the country for the benefit of the ordinary Sri Lankan. But to destroy it and solicit intervention by the coup masters.

  5. Ben Silva Says:

    There appears to be a link between Mahendran, Rajaratnam and LTTE. Has Mahendran and RW attended the same school ?

  6. Lorenzo Says:


    You read my mind.

    Explore more and you will get to the bottom of it.

    (HINT 1: UNP needs TNA support now and after the election to hold on to power. TNA=LTTE. See WHY a LTTE sympathiser was made the CB governor? There is more.)

    (HINT 2: In 2007 GOSL confiscated over $600 million belonging to TRO – LTTE’s sham rehabilitation unit. In 2009 GOSL confiscated over $1 billion (in current prices) worth LTTE gold. These are managed by the central bank. Now they are slowly releasing these to TGTE and REPATRIATING these to foreign countries. Now you know WHY SL’s foreign reserves DROPPED by $2 BILLION after this SINGAPOREAN became the governor!!)

    (HINT 3: The entire REGIME CHANGE things was HATCHED in SINGAPORE in 2014 between TGTE, UNP, TNA, SLMC, JVP, etc.!!)

    My comments are moderated so I cannot reveal all these INSIDER FACTS for the benefit of patriots. IF the good moderator can allow posting I can reveal much more from an INSIDER point of view.

    IF you know the REAL GIGA DEALS going inside, you will say the things I said about Maru Sira (which led to my comments moderation). Maru Sira is AMPUTATING the SL economy, HSZs, unitary status, Singhala identity, Buddhist identity, etc. one by one. Its either SL or Maru Sira.

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