Presidential Commission on Bond Issue: No clear directive given to Superintendent of Public Debt; MB notes changed

Presidential Commission on Bond Issue: No clear directive given to Superintendent of Public Debt; MB notes changed

Presidential Commission on Bond Issue: No clear directive given to Superintendent of Public Debt; MB notes changed

Written by Keshala Dias

22 Mar, 2017 | 9:38 pm

Was a clear directive given to the Superintendent of Public Debt, following the Monetary Board meeting on the 23rd of February 2015?

Providing evidence before the Presidential Commission of Inquiry, the Secretary to the Monetary Board H. A. Karunaratne said there was no clear indication on the directive that was to be given to the Superintendent of Public Debt, ahead of February 27, 2015 bond auction.

The draft minutes of the meeting were subject to amendments on several occasions when submitted to Deputy Governor P. Samarasiri.

The final draft, only came to Karunaratne shortly after March 13, 2015,  – fourteen days after the bond auction.

The Monetary Board note which read “explore the possibility to issue 30 year bonds” was changed to “issue 30 year bonds”.

Governor Arjuna Mahendran’s directive to “move away from Direct Placements” was changed to “temporarily suspend direct placements.”

The Counsel representing the former governor, questioned the witness on the 501 staff transfers mentioned during his testimony.

Counsel said, these were staff transfers and postings.

It came to light that in 2015, the Central Bank of Sri Lanka established a Regulatory and Compliance Department and a Risk Management Department.

The witness did not inform the Attorney General about the establishment of these new departments, which resulted in the reshuffle.

The Counsel appearing for Perpetual Treasuries highlighted that there were issues with the former administration of the Central Bank alluding to the purchase of Greek Bonds in 2011, which led to a loss of USD 15.6 million.

Former Governor of the Central Bank of Sri Lanka was present during the sessions today, March 22, as well.

Ananda Silva, the Deputy Governor of the Central Bank of Sri Lanka is to give evidence before the Commission tomorrow, March 23.

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