ECONOMYNEXT – The governing board of Sri Lanka’s Central Bank will meet on Friday to consider an internal investigation report on Perpetual Treasuries Plc, a company that made large profits from bond deals, Governor Indrajit Coomaraswamy said.
The Monetary Board of the Central Bank had already met this week to discuss a report prepared by the division that regulates Non-Bank Financial Institutions.
"The commitment I sensed in board members is that they will want to go where the evidence leads them," Governor Coomaraswamy told reporters.
Perpetual Treasuries, a firm connected to Arjuna Aloysius, son-in-law of former Central Bank Governor Arjuna Mahendran made large profits from so-called ‘bond scams’ where bonds bought at low prices (high yields) from auctions where sharply higher volumes have been sold after offering low volumes at initial auctions.
Coomaraswamy had already stopped the practice and is looking to improve the auctions.
Some of the bonds were then sold at high prices to the Employees Provident Fund, which is also managed by the Central Bank.
Coomaraswamy said a report by the parliament’s Committee on Public Enterprises will also be considered by the Monetary Board.
The report has recommended improvements to auctions, and a clawback of profits made by Perpetual. (Colombo/Nov02/2016)