Central Bank of Sri Lanka bond controversy explained

Central Bank of Sri Lanka bond controversy explained

Central Bank of Sri Lanka bond controversy explained

Written by Staff Writer

04 Jan, 2016 | 10:02 pm

The alleged Central Bank Bond scam was a major topic of discussion throughout the year in 2015. What happened in this controversial transaction?

In February 2015, the Central Bank of Sri Lanka (CBSL) announced the issue of thirty-year sovereign bonds, with the aim of raising Rs. 1 billion. Despite the initial indication of Rs.1 billion, the CBSL’s Public Debt Department went on to accept bids of up to 10 billion rupees, and the primary dealers were not informed of the CBSL’s decision to raise more funds.

However, allegations were raised that Perpetual Treasuries Limited, a company which is said to be owned by Arjun Aloysius, the son-in-law of the Governor of CBSL, was privy to this information.

Investigations by News 1st revealed that the address of Perpetual Treasuries Ltd and that of Arjun Aloysius, were the same. During an over-the-phone interview with News 1st, the Governor of CBSL Arjuna Mahendran admitted that there had been a miscommunication in failing to inform the primary dealers of the increased requirement for funds.

While the Prime Minister appointed a committee to inquire into the matter and commissioned a report, the COPE committee’s investigation into the matter came to a standstill following the dissolution of parliament. Speaking on the matter, Convener for the Voice Against Corruption Wasantha Samarasinghe stated that the Central Bank bond controversy is still being swept under the carpet.

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