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Sri Lanka names committee to probe insider dealing in bonds

COLOMBO (EconomyNext) – Sri Lanka has appointed three member committee to carry out a probe ordered by President Maithripala Sirisena into alleged insider dealing in Sri Lanka government securities markets.

President Sirisena ordered his secretary to appoint a three member committee on Monday to investigate alleged insider dealing in government securities by Perpetual Treasuries a company connected to the son-in-law of Central Bank Governor Arjuna Mahendran.

Sri Lanka’s Prime Minister Ranil Wickramasinghe "after having consulted the President over the Phone decided to appoint a three member committee to investigate the matters Concerning the above issue," his office said in a statement.

The committee will be chaired by Gamini Pitipana. Other members will be Mahesh Kalugampitiya and Chandimal Mendis.

Last week, the Wickremasinghe’s Policy Planning Ministry issued a statement which appeared to defend a 30-year bond issue where the volume was increased 10 times and half of it given to Perpetual Treasuries sending rates soaring.

Sri Lanka’s Daily Mirror newspaper in an editorial described the statement as ‘koheda yanne malle pol’ in reference to a traditional saying where a person when asked where he is going, replies that he has coconuts in his bag.

The statement also criticized an earlier practice of selling bonds outside the auction process, which was said to be abused by a so-called ‘bond mafia’.