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Saturday May 15th, 2021
Bonds & Forex

Sri Lanka bond scandal report bares gloating over ‘colossal profit’

COLOMBO (EconomyNext) – A committee probing an alleged Treasury bond scam involving the Sri Lankan Central Bank governor’s son-in-law has revealed gloating over the prospects of making extraordinary profits in the transaction.

The three-member committee found discrepancies in statements by the Chief Executive of Perpetual Treasuries, which bid for the bonds, and the Chief Dealer of the Bank of Ceylon, through which some bids were made.

The report of the committee, appointed by Prime Minister Ranil Wickremasinghe after an outcry over alleged insider dealing in gilts by Perpetual Treasuries, a company connected to the son-in-law of Central Bank Governor Arjuna Mahendran, was tabled in parliament Tuesday.

Among the people the committee questioned were the Chief Executive of Perpetual Treasuries and the Chief Dealer of the Bank of Ceylon which handled bids worth 13 billion rupees from Perpetual Treasuries.

Chief Dealer of the Bank of Ceylon told the inquiry committee that “Perpetual Treasuries made a call with regard to placing the said bids and mentioned that the funding for such bids is by an insurance company,” the report said.

“The Chief Dealer of the BOC also stated that he inquired from the CEO of Perpetual Treasuries as to the reason of high amount of yield net of tax and the reply he received from the CEO of Perpetual treasuries was ‘awoth atha thamai’ (The rough meaning  is a colossal profit, if successful),” the report said.

“However, answering questions by the committee, the CEO of Perpetual Treasuries denied that he mentioned that their source of funding is by an insurance company.

“He also disputed that it is he who said “Awoth atha thamai”, and said that it is the Chief dealer of the BOC who said  ‘awoth atha thamai’,” the report said.

In its observations, the committee noted that though there is no legal bar, it is unusual for a primary dealer to forward bids through another primary dealer.

It also noted the lack of transparency and disparity in statements of the Chief Dealer of BOC and CEO of Perpetual Treasuries and the disparity of statements made by each other.
 

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