Loss due to Feb. 27 bond scam exceeds Rs. 125 bn – Joint Opposition
Posted on November 3rd, 2016

By Shamindra Ferdinando Courtesy The Island

The Joint Opposition yesterday acknowledged that none of those who had faced serious accusations during the previous SLFP-led PA and UPFA administrations had given up portfolios and positions temporarily to facilitate investigations.

Asked by The Island whether those in the Joint Opposition had practised what they preached now, top JO spokesmen Prof. G. L. Peiris and MP Bandula Gunawardena said the Central Bank bond scam couldn’t be compared with any other case examined by parliamentary watchdog committees, COPE (Committee on Public Enterprises) and PAC (Public Accounts Committee).

Gunawardena insisted that the unprecedented fraud had jeopardised national economy and undermined the investor confidence.

The JO couldn’t name a single politician who had stepped down on his or her own or were directed by the party to do so during their administration. The Island sought an explanation regarding the UPFA’s failure to take tangible action on the basis of COPE and PAC reports against the backdrop of their demand that Prime Minister Ranil Wickremesinghe quit thereby facilitating a proper investigation into the alleged scam.


The JO refused to be drawn on the issue of Dr P. B. Jayasundera receiving appointment as Secretary to the Ministry Finance in spite of him being faulted by the Supreme Court over infamous Lanka Marine Services deal also exposed by COPE during the then MP Wijeyadasa Rajapakse’s tenure as the watchdog’s Chairman.

Alleging that former Central Bank Governor Arjuna Mahendran had allowed Perpetual Treasuries run by his son-in-law Arjun Aloysius to use the Central Bank and the entire banking system to their advantage, both Prof. Peiris and MP Gunawardena emphasized such a project wouldn’t have been possible without PM Wickremesinghe’s knowledge. Underscoring the fact that the Central Bank had been under Premier Wickremesinghe’s supervision since the last presidential polls in January 2015, Prof. Peiris insisted that an independent investigation wasn’t possible as long as the UNP leader remained at the helm. Therefore, Premier Wickremesinghe should quit and the licence issued to Perpetual Treasuries to function as a primary dealer suspended pending investigation, Prof. Peiris said.

Both Prof. Peiris and MP Gunawardena said that it would be the responsibility of the Central Bank’s Monetary Board headed by Arjuna Mahendran’s successor Dr. Indrajith Coomaraswamy to act decisively regarding the allegations.

Acknowledging that Perpetual Treasuries had received the licence during the previous administration in 2013, JO spokesmen pointed out that the Monetary Board should examine the circumstances under which the Mahendrans’ outfit had recorded a massive growth. In 2014, Perpetual Treasuries share among 16 primary dealers engaged in the lucrative business had been just one per cent, but in the wake of presidential polls, the outfit increased its share to a staggering 43 to 46 per cent, Gunawardena said.

The Monetary Board owed an explanation as regards Perpetual Treasuries receiving a staggering Rs. 66 bn from the Central Bank between Feb 2015 and March 2016 to facilitate the controversial project, MP Gunawardena said. Of some Rs 89 bn released to primary dealers, Perpetual Treasuries had received Rs 66 bn or 75 per cent of the total amount, the MP said, adding that the outfit recorded a staggering Rs 10.1 bn after tax profit.

Gunawardena asserted that Feb 27, 2015 bond scam had caused over Rs 125 bn loss over a thirty year period.

Prof. Peiris said that Central Bank Governor Coomaraswamy had lodged a complaint with the CID recently seeking their intervention to identify the person or persons behind the leaking of confidential internal investigation conducted by the CB into the clandestine operation undertaken by the Mahendrans. Alleging that Coomaraswamy had acted on the instructions of PM Wickremesinghe Prof. Peiris said that the same person was reluctant to request the police to investigate the massive bond fraud.

The JO vowed not to allow the government to sweep the robbery under the carpet.

Prof. Peiris insisted that the conduct of Bank of Ceylon (BoC) bigwigs as well as the Minister in charge of state banks should be inquired into against the backdrop of the revelation that the premier state bank, too, provided funds to the Mahendrans’ outfit.

MP Gunawardena said that the UNP couldn’t absolve itself of the responsibility and massive financial turmoil caused by involving the Central Bank in fraudulent project.

2 Responses to “Loss due to Feb. 27 bond scam exceeds Rs. 125 bn – Joint Opposition”

  1. plumblossom Says:

    Yes, Ranil Wickramasinghe must resign immediately. This is the honourable thing to do. The country should be run by a PM who holds the confidence of most people. This is very important. Someone else who holds the confidence of the people should be appointed the PM by President Sirisena. Besides, Arjunan Mahendran did say the PM, meaning Ranil, asked him to do it. Therefore he should resign immediately which is the honourable thing to do and let any investigations take place without any interference. In other countries, this is what happens after this type of incident. So it is not at all unique.

  2. Lorenzo Says:

    At last Mahendran has apologized for wrong doing!!!


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