Retracing the steps that led to the baffling bond scam: Presidential Commission continues investigations

Retracing the steps that led to the baffling bond scam: Presidential Commission continues investigations

By Keshala Dias

Jul 16, 2017 | 7:50 pm

Two years after the alleged bond scam took place, the Presidential Commission of Inquiry has brought to light much evidence, never revealed before.

Who are the key players surrounding this incident and how are they connected?

A look back at how the story of the treasury bond scandal began…

Faced with repayments on the massive loans inherited from the previous government, the Central Bank decided to raise Rs. 1 billion through an auction on February 27, 2015. Little did they know this move would be the trigger of a monumental public outcry.

The bank received just over Rs. 20 billion in bids and former Governor Arjuna Mahendran instructed the Public Debt Department to accept Rs. 10 billion.

On March 16, 2015, in an exclusive with News1st, Mahendran accepted that there was a communication gap between the Central Bank and Primary Dealers.

[quote]”..And now in this instance, I think that communication did not work properly. We should have said that we needed to raise 10 billion. But of course we advertised on the previous day and I only got to know the treasury requirement on Thursday. So there was miscommunication and I accept that”.[/quote]

Perpetual Treasuries Limited is the Primary Dealer under investigation for making extremely large bids at the controversial auction.

While Arjun Aloysius is listed in the parent company of PTL, Kasun Palisena acts as the CEO of the Primary Dealer.

Arjun Aloysious is the son-in-law of Arjuna Mahendran, the Governor of the Central Bank at the time of the auctions under investigation.

At the auction on February 27, 2015, Perpetual Treasuries made Rs. 15 billion in bids of which Rs. 13 billion were made through Bank of Ceylon.

This sparked the controversy, with the Auditor General calculating that the actions of PTL resulting in a massive loss to the nation – his revelation was made before the Presidential Commission on Inquiry.

Trading practices of Perpetual Treasuries has come under question as well.

The Attorney General’s Department exposed a pattern in trading designed to mask the real beneficiary in bond transactions.The pattern has been designed at the expense of the Employees Provident Fund (EPF).

The intermediary identified by the AG’s Department was Pan Asia Banking Corporation – who generated a marginal profit in this role.

PTL has used Money Brokers for the same purpose.

What is even more baffling is that the former Chairman of Pan Asia Banking Corporation PLC – Nimal Perera had also used the bank to trade his securities and the securities of his company NP Capital, with the EPF.

The Presidential Commission wants to know who else benefited through this intermediary operation.

In all these transactions, the point person at the EPF is Saman Kumara.

His extensive assets have led the Commission to question his personal financial position. He will appear before the Commission again on Monday.

Where will Saman Kumara’s evidence lead? Will it expose the people at the top involved in this scam?

News1st will continue to follow the evidence with the Commission and connect the dots.

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Arjun Aloysius   Arjuna Mahendran.   attorney-general   Bond scam   Central Bank   EPF   Nimal Perera   Pan Asia Banking Corporation PLC   Perpetual Treasuries   Presidential Commission of Inquiry   Saman Kumara   transparency