Presidential Commission of Inquiry: W. M. Mendis & Company asked to submit details

Presidential Commission of Inquiry: W. M. Mendis & Company asked to submit details

By Keshala Dias

10 Aug, 2017 | 10:06 pm

The Presidential Commission of Inquiry into the bond scam has issued notice on W. M. Mendis & Company Limited to submit the requested company details.

W. M. Mendis & Company Limited is requested to furnish all required material to the Commission before Wednesday, August16.

Free Lanka Trading Company Limited furnished the details requested by the Commission on Thursday morning.

Once again, the Presidential Commission was keen to know why Perpetual Treasuries Limited placed bids fifteen times to what was on offer by the Central Bank on February 27, 2015.

CEO of Perpetual Treasuries Limited Kasun Palisena said  that as there were no auctions since December 2014 to that day. and as he believed the government was in desperate need to repay Rs. 300 billion, the auction was important.

Justice Prasanna Jayawardena who pointed out that there was nothing unusual about the Rs. 300 billion debt profile of the government, requested Palisena to show reason as to why he called the auction, extraordinary.

Chairman of the Commission Justice K. T. Chitrasiri said the Central Bank would have been more aware of the situation at the time, more than Palisena, and they would have had other means of raising the required funds.

However, Palisena said the call from the PDD on the day before auction, led him to believe the government was in desperate need for money.

The Commission questioned Palisena if all Perpetual Treasuries Limited bids were accepted, how would the settlement have taken place?Palisena said he had Rs. 500 million in hand and 3.10 billion liquidated securities.

He would use the sell and buy back with BOC for Rs. 2.3 billion and enter repos with other counter parties.

The Commission reiterated to Palisena that the burden is on him to justify the reasons that led him to bid fifteen times more than the offer.

As BOC suspended dealings with Perpetual Treasuries Limited after the controversial auction, Perpetual Treasuries Limited bid through PABC at the time due to the ease of settlement.

According to Palisena, ahead of the 2016 auctions, Perpetual Treasuries Limited analysts said the government was desperate for money, adding that crisis will always create an opportunity.

Before the auction on March 29, 2016 , Perpetual Treasuries Limited analysts had said as the previous auction bids were rejected, the Central Bank will have to accept more at this auction adding that the Central Bank is in no position to print more money.

Commenting on the 2016 Finance Asia Summit in Singapore, which was sponsored by Perpetual Treasuries Limited, Palisena said it was done in Partnership of a Singaporean Company – the representative was Nirgunan Tiruchelvam.

Nirgunan Tiruchelvam is the ‎Director Research at Religare Capital Markets (Singapore).

Among those who represented Sri Lanka at this summit was former Governor of the Central Bank Arjuna Mahendran.