Presidential Commission on Bond Issue: CBSL Former Deputy Governor recommends immediate changes

Presidential Commission on Bond Issue: CBSL Former Deputy Governor recommends immediate changes

Written by Keshala Dias

27 Apr, 2017 | 10:19 pm

It was revealed before the Presidential Commission today, April 27, that the pumping and dumping method was allegedly used in relation to government securities in the past.

Former Deputy Governor of CBSL  W.A.Wijewardena, says the scandalous actions in relation to government securities were the result of the lethargic attitude of the monetary Board members.

In a statement, he stated that the existing Monetary Law Act must also be amended.

He further said that the person appointed as Governor must have unquestionable integrity and a selection process for a new Governor must begin at least one year before the incumbent retires.

In relation to the Intra-day Liquidity Facility (ILF) given to Perpetual Treasuries Limited during the period of the impugned auction, Dr. Wijewardena said the Primary Dealer had abused the ILF and dishonoured the obligation it made to the Central Bank.

Over the alleged losses to the EPF, he said the governance structure of the EPF must be re-examined.

In relation to the profits made by Perpetual Treasuries Limited in 2015, Dr. Wijewardena said profit making was skewed with Perpetual Treasuries making 90% of the market profits.

He noted that the market strategy of Perpetual Treasuries must be looked in to.

In reponse to the questions raised by Attorney-at-Law Harsha Fernando, the witness said that a hybrid system of auctions and direct placements are preferred.

He said, having Direct Placements would strengthen the auction system.

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