Bond Scam II : Sri Lanka’s biggest cover-up

Bond Scam II : Sri Lanka’s biggest cover-up

Bond Scam II : Sri Lanka’s biggest cover-up

Written by Staff Writer

09 Aug, 2018 | 9:36 pm

COLOMBO (News 1st) – There are growing concerns that the delay in investigating the second Bond scam is a part of an even greater cover-up than in the case of the first Bond Scam.

The Presidential Commission of Inquiry stated on the matter that the loss to the EPF alone amounted to Rs. 8,500 Million adding that subject to a court decision Perpetual Treasuries Limited would be liable to a fine in excess of Rs.17 billion.

The Commission has specifically asked for a forensic audit of trades, entered into by Perpetual Treasuries Limited and others into the 2 bonds issued in March 2016. Despite the passing of 7 months since that report emerged the Central Bank of Sri Lanka has thus far not started the forensic audit.

When the first bond scam took place, a three-member committee of UNP affiliated lawyers was appointed. However that too was criticized by many. There was a prima-facie case of a clear conflict of interest scenario and a departure from due process, the highest in the land continuously denied any wrongdoing and permitted the then governor of the Central Bank of Sri Lanka Arjuna Mahendran to remain in his position.

The Auditor General of Sri Lanka had noted that the change of the system of awarding bonds from that which was in place since 1997 was not the least cost method of raising monies for the government. Prime Minister Ranil Wickramasinghe, had stated that he insisted on a public auction. Because private placements had led to corruption and lack of transparency.

Experts believe that the 2015 bond will cause a loss of Rs. 600 billion over the next 15 years. During 2015 bond issuances, a Rs. 1 Billion requirement led to a take up of Rs. 10 Billion. The advertised requirement for bond II of Rs. 40 Billion led to a take up of a remarkable Rs. 77 billion.

With Bond I the Presidential Commission of Inquiry held that the public’s monies suffered a loss in excess of Rs. 8,500 million. Perpetual Treasuries Limited then at the epicenter of this scam reported profits of in excess of Rs. 12 Billion over three accounting periods.

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