Sri Lanka central bank begins work on forensic audits of share, bond investments

ECONOMYNEXT – Sri Lanka’s central bank said it had begun work on doing forensic audits of investments in equities and bonds by a state employees’ pensions fund it manages and operations of selected entities under its supervision.

“The procurement process for several forensic audits is underway in several areas such as investments of a fund in equities and Treasury bonds, issuance of Treasury bonds and certain operations of selected entities regulated and supervised by Central Bank,” a statement said.

“The forensic audits are to be conducted by entities with a global practice,” the banking regulator said.

Several internal disciplinary proceedings are also underway as part of measures to improve central bank governance recommended by a commission inquiring into alleged rigged auctions of government bonds during 2015 and 2016.

The commission probed allegations where billions of rupees of bonds were bought by Perpetual Treasuries, a primary dealer, at high yields (low prices) and dumped mostly on the Employees’ Provident Fund, a state pension fund managed by the central bank, at low yields (high prices).

“Civil recovery action has been filed to recover unlawful gains made by a primary dealer at the expense of funds of the Central Bank and the Employees’ Provident Fund,” the statement said.

“On a complaint made by the Central Bank, action has also been initiated by the law enforcement authorities.”
(COLOMBO, 15 Octber, 2018)

 

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