Sri Lanka Central Bank refutes President’s bond claims

ECONOMYNEXT – Sri Lanka’s Central Bank Wednesday rejected President Maithripala Sirisena’s allegation that over one thousand billion rupees had been stolen through controversial bond sales over a 14-year period ending 2016.

Central Bank of Sri Lanka Senior Deputy Governor Nandalal Weerasinghe said he was at a meeting with President Sirisena on December 21 to discuss progress in investigating the alleged bond scams, but was surprised to read inaccurate media reports of it quoting the President’s Media Division.

“I was at this meeting and I can tell you that no one mentioned this figure of 1,000 million rupees,” Weerasinghe said clarifying that no one had actually estimated the possible loss or otherwise from disputed bond sales.

He said the Presidential Commission of inquiry (PCI) into bond sales of 2015 and 2016 had ordered several forensic audits for the purpose of establishing if there was any loss to the state, and if so how much. Anything else was mere speculation, he added.

The President’s Media Unit statement issued on December 21 shortly after the high-powered meeting at the Presidential Secretariat quoted central bankers as giving the one thousand billion figure for losses from bond sales between 2002 and 2016, a period covering the former Rajapaksa regime too.

Central Bank Governor Indrajith Coomaraswamy said he had sent an interim report on the progress of implementing PCI recommendations to Sirisena on the night of October 26, just as President Sirisena sacked Prime Minister Ranil Wickremesinghe and triggered a power struggle that lasted 51 days.

Sirisena had claimed that one of the main reasons to sack Wickremesinghe and his government was their failure to complete investigations into controversial bond auctions through which the then governor Arjuna Mahendran’s son-in-law’s company is said to have benefited. Mahendran was accused of passing inside information to his son-in-law.

The Presidential Commission of Inquiry which finalized its report in January last 2018 noted that Mahendran’s actions led to an “avoidable loss of 688 million rupees (Rs. 688,762,100)” in the February 2015 bond action.

Coomaraswamy denied any undue delay in carrying out a forensic audit of bond actions. He said they were currently evaluating proposals from international audit firms to carry out six separate audits into bond sales as well as EPF and ETF activities.

He said the selection of auditors required careful vetting. He expected the audits to be completed by the end of this year with several interim reports expected much earlier. (COLOMBO, January 2, 2019)
   
 

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