Bond Gate RECAP: Events leading up to the Bond Scam and after (VIDEO)

Bond Gate RECAP: Events leading up to the Bond Scam and after (VIDEO)

By Lahiru Fernando

05 Dec, 2017 | 10:14 pm

This is our look back at the events taken place at the Central Bank Bond Scam investigation.

In our first piece, we brought to you the contradicting statements made at the Presidential Commission of Inquiry into the Bond Scam.

Read More: A look back at the Bond Scam investigation: Contradicting statements

Today (December 5) we bring you the events which lead to the controversial Bond Auction.

Auction Date: February 27, 2015

Debt to be raised: Rs. 1 Billion (Offered by the Central Bank)

According to evidence led before the Presidential Commission of Inquiry, the Public Debt Department received a total of just over Rs. 20 Billion in Bids.

  • Perpetual Treasuries Limited (PTL) placed Rs. 2.25 Billion
  • Bank of Ceylon placed Rs 13 Billion on behalf of PTL

Of that, – PTLs Rs. 2.25 Billion and their Rs. 3 Billion via BOC were accepted. – This brings to a total of Rs. 5.35 billion.

A complete total of Rs. 10.058 Billion in bids were accepted at this auction.

Comparing the total bids and the bids made by Perpetual, -just over 50% of the accepted bids were in favor of PTL.

How did that happen?

It is now confirmed that Former Governor Arjuna Mahendran visited the Public Debt Department after the auction for the second time that day.

During his visit Mahendran had ordered the PDD to accept Rs. 10.058 Billion.

Perpetual Treasuries, which has just over 50% of the accepted bids- is owned by Arjun Aloysius -the Son-in-Law of Arjuna Mahendran.

Following a public outcry of alleged impropriety over the Central Bank Treasury Bond Issue, Prime Minister Ranil Wickremesinghe appointed a three member committee.

This committee was known as the ‘Gamini Pitipana Committee’.

Appointed on March 9, 2015 – In it’s recommendations it did not mention any questionable conduct of then Central Bank Governor Arjuna Mahendran on his directive to accept 10 times the offered amount.

CBSL personnel, activists and market players have said accepting 10 times the offer is “HIGHLY UNUSUAL”.

As the public outcry continued to grow, COPE of the 07th Parliament was tasked to investigate the Bond Issue.

Sadly, Parliament was dissolved for elections before it could release its report.

Thereafter, COPE of the 08th Parliament was tasked with investigating the matter, -as the media continued to raise questions about the impropriety of the bond issue.

But this COPE committee -Chaired by Sunil Handunnetti- ran into a series of obstacles.

The main one – UNP members of COPE added footnotes to the final report. -Among them were Sujeewa Senasinghe.

Senasinghe was appointed to COPE after one member resigned from the Committee.

What did the report say?

According to the COPE report recommendations, former Governor of the Central Bank Arjuna Mahendran should be held directly responsible over the bond transaction.

The COPE chairman said the report contains recommendations and observations and there is a clear difference in the report and the footnotes.

During this period, Arjuna Mahendran was not in the country.

However continuous criticism and demand for justice prompted President Maithripala Sirisena to appoint the Presidential Commission of Inquiry.


Next10 key revelations made at the Presidential Commission