Sri Lanka should probe Perpetual Treasuries, EPF, state banks: Eran

ECONOMYNEXT – Sri Lanka should probe Perpetual Treasuries, the Central Bank, the Employees Provident Find and state banks to break a ring of corruption, Deputy Enterprise Minister Eran Wickramaratne said.

"We have to clean up the system," Wickamaratne told reporters in Colombo.

His comments came in the wake of a parliamentary panel finding ex-Central Bank Governor Arjuna Mahendran responsible for irregular auctions where the firm connected to his son-in-law Arjuna Alloysius made around Rs10 billion in profits over two years.

The report said any losses to the state should be recovered.

Wickramaratne said the parliament’s Committee on Public Enterprises (COPE) report was a triumph for democracy.

Unlike in the ousted Rajapaksa regime, the parliamentary system of oversight was now working, he said.

"Our administration made the Chairman of COPE an opposition member," Wickramaratne said. "Under the previous administration, it was a government member. In fact, I requested to be removed from the COPE when I was made minister of state enterprises."

There was a public outcry amid reports that Perpetual Treasuries had dumped long bonds bought at high yields (low prices) from rigged government auctions on the EPF.

It is alleged that cosy relationships were established with dealers who enriched themselves through securities purchases for years.

During the Rajapaksa regime, the EPF was reputed as a dumping ground for stocks and earned the accolade of being the ‘buyer of last resort’, an allusion to the Central Bank’s role of being the ‘lender of last resort’ for troubled banks. EPF is managed by the Central Bank.

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Market players say the same people involved in stock dumping on both sides of the contract were also involved in the bonds.

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