Sri Lanka bondscam: Perpetual got inside info from Central Bank, NSB: report
ECONOMYNEXT – Perpetual Treasuries had received inside information from the Central Bank through then Governor Arjuna Mahendran’s son-in-law Arjuna Aloysius to make lucrative bids at bond auctions, reports said.
Sri Lanka’s Daily Mirror newspaper said Nuwan Salgado, chief dealer of Perpetual Treasuries, had testified before a presidential commission of inquiry that information of rate hikes were also given.
Information from the Central Bank was passed on with comments such as "our man wants us to bid" and also as "our man in the department".
In a phone recording played at the commission, Aloysius says there will be no rate hike as expected by the market, according to ‘our man in the Department’, the report said.
Relating to a bond auction in March 2016, Perpetual was given information on the bids made by the Employees Provident Fund and National Savings Bank.
Salgdago had said inside information from EPF came from one Saman Kumara and on NSB from; one Nuwan Anuradha. Aloysius was in the habit of instructing Palisena on how to make bids, Salgado had said.
Additional Solicitor General, Yasantha Kodagoda had declared that Perpetual Treasuries had made profits of 11 billion rupees in 2015 and 2016 with insider information, while the second-highest profit maker only made about 500 million rupees.
The commission in probing into massive securities fraud where Perpetual bought bonds from allegedly rigged bond auctions at high interest rates (low prices) and then dumped them on state-managed funds including the Employees Provident Fund at low rates (high prices).
In another recording, Palisena had told Salgado that Aloysius had received a document related to the Parliament’s Committee on Public Enterprises (COPE) from ‘Rosy’s son’. Salgado said the reference was to Kanishka Senanayake, son of Rosy Senanayake, a defeated candidate who stood for election from the United National Party ticket.
Palisena had wanted copies of the document to be given to ‘Governor’ who was then Arjuna Mahendran.
Kanishka Senanayake was a fried of Aloysius, the commission was told. (Colombo/Sept7/2017)