Written by Lahiru Fernando
20 Jun, 2017 | 8:19 pm
The Auditor General’s evidence re-examination took a tense turn at the Presidential Commission of Inquiry today, June 20.
Going into day 55 of the inquiry, The lawyer representing Deputy Governor P. Samarasiri produced documents in relation to the Monetary Board minutes from March and April 2017.
A reason for the auction investigation, according to the AG, was an incident where a primary dealer bid on behalf of another primary dealer, an incident which has never happened before. The dealer who made the bid was Bank of Ceylon, on behalf of Perpetual Treasuries Limited.
AG Gamini Wijesinghe stood by his conclusion, which is that the Governor of the Central Bank had not acted with Professional Due Care in the performance of his functions, as expected of a Central Bank Governor.
Another who was summoned to the commission today was the Managing Director of First Capital Holdings PLC – Dinesh Schaffter.
Schaffter was questioned on emails he had sent to then-MP Harsha De Silva following the controversial auction on February 27, 2015.
He said the auction was “highly unusual” as the amount accepted was ten times greater than what was offered and the increase of 300 basis points in market rates.
First Capital Holdings PLC had bid 100mn on that day at a rate of 10.10% as a dummy bid anticipating a rejection – however as the amount accepted was greater, their bid too had been accepted.
Dinesh Schaffter revealed that on March 2, 2015 – Pepetual Treasuries Limited had advertised to offer bonds at a Repurchase Agreement for 07 % – which believed that Perpetual Treasuries required funds and had to make a payment.
He said the practice of direct placements at the Central Bank was transparent and there was no mafia that controlled the market.
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