ECONOMYNEXT – Sri Lanka’s Central Bank said it has called in ‘law enforcement authorities’ to probe a leak of a draft regulatory examination report into what observers say is the biggest securities scam in the history of the island’s financial markets.
An online publication leaked a draft investigation into the activities of Perpetual Treasuries Ltd, which has made extraordinary profits from unusually large volumes of Treasury bonds allocated to it at high yields during the tenure of the last Central Bank governor.
The Central Bank said a special meeting of its governing monetary board will be held on distressed finance companies and "current concerns regarding Perpetual Treasuries Ltd".
The full statement is reproduced below:
Statement of the Monetary Board on the Recent Media Reports
Statement of the Monetary Board on the Recent Media Reports There has been widespread coverage in the press and electronic media regarding a report related to the examination of Perpetual Treasuries Ltd conducted by the Central Bank of Sri Lanka as the regulator of Primary Dealers operating in the Government securities market.
The release of this report into the public domain has not been authorized. The Central Bank of Sri Lanka’s internal processes within the Department of Supervision of Non-Bank Financial Institutions have not been completed and the final report has not as yet been submitted to the Monetary Board for its consideration.
Arising from this unauthorized disclosure, the Central Bank of Sri Lanka is strengthening its internal control mechanisms and a complaint has also been made to law enforcement authorities to inquire into the unauthorized release of this report.
At its last meeting held on 3rd October, 2016, the Monetary Board decided to hold a special meeting to consider issues related to the resolution of distressed non-bank financial institutions as well as the operations of Primary Dealers, including the current concerns regarding Perpetual Treasuries Ltd.
This special meeting will be held shortly and was scheduled before the Monetary Board was aware of the unauthorized release of the draft examination report on Perpetual Treasuries Ltd.