Sri Lanka Highways Ministry says no part in bond controversy

COLOMBO (EconomyNext) – Sri Lanka’s Highways and Investment Promotions Ministry said it had nothing to do with a decision to issue extra 30-year bonds two weeks ago, which sent rates soaring amid allegations of insider fraud.

The Ministry said in a statement it needed 15 billion rupees urgently to continue construction of roads.

"The Ministry of Highways, Higher Education and Investment Promotion requested the funds from the Ministry of Finance," the statement said.

"The Ministry of Finance determines the manner in which the said funding is raised."
The controversy surrounds alleged insider dealing by Perpetual Treasuries shortly before interest rates were raised on Friday February 27 as well as a 30-year bond sale on that day.

After offering a billion rupees at the auction, the Central Bank sold 10 billion rupees of bonds at rates around 200 basis points above recent off-market placements. It later turned out that half the bonds had been sold to Perpetual Treasuries.

Sri Lanka’s President Maithripla Sirisena ordered a probe by a three-member committee into the allegations.

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