Second bond scam more deliberate and thorough

Second bond scam more deliberate and thorough

Second bond scam more deliberate and thorough

Written by Staff Writer

30 Dec, 2019 | 10:18 pm

COLOMBO (News 1st) – The report of the Presidential Commission to probe the Central Bank Treasury Bond Scam was handed over to former President Maithripala Sirisena exactly two years ago.

The Presidential Commission led by former Supreme Court Justice KT Chitrasiri made several key recommendations on instituting possible action against those responsible.

4 years and 10 months ago, News 1st reported on what would later be described as the biggest financial scam ever to be inflicted, upon the people of independent Sri Lanka.

Within days, of News 1st’s reporting on the deviation of due process, conflict of interest on the part of Governor Arjuna Mahendran and his son-in-law Arjun Aloysius, the then Prime Minister Ranil Wickremesinghe, made a special statement in parliament.

Prime Minister acknowledged that he had appointed the Pitipana committee, which consisted of 3 lawyers with known loyalties to the United National Party and unknown expertise in the operations of the CB and the issuance of bonds.

This committee infamously cleared then Governor Arjuna Mahendran of any wrongdoing but insisted on an investigation into Perpetual Treasuries Limited, which they said was not within their remit.

At the time that the report was handed in to President Sirisena, 2 years ago, various activists were aghast that the then Presidential Secretary Austin Fernando, decided to archive the report.

However, 106 pages of the report said to contain sensitive information has never been made public.

In the report, PCoI determined the Government suffered an avoidable loss of Rs. 688,762,100. The commission determined that former Central Bank Governor Arjuna Mahendran was liable and responsible for the avoidable loss.

The Commission also held that Perpetual Treasuries Limited, a company controlled by Arjun Aloysius was also liable for that loss.

The commission recommended that appropriate proceedings are instituted against Mahendran to recover this loss.

Unfortunately, Arjuna Mahendran has thus far managed to evade Sri Lanka’s law enforcement authorities and remain away from Sri Lanka.

The PCoI says Mahendran acted in collusion with Perpetual Treasuries Ltd, by providing them with inside information to be used at the 27th February 2015 Bond Auction.

Operations of Perpetual Treasuries Limited, remain suspended while investigations continue.

The PCoI recommended instituting appropriate proceedings in court for the recovery of losses from Arjuna Mahendran, Perpetual Treasuries Ltd and its beneficial owners – namely, Arjun Aloysius and Geoffrey Aloysius and they also named the CEO of PTL, Kasun Palisena.

Arjuna Aloysius and Kasun Palisena were arrested, remanded and then granted bail while the investigations were still taking place.

The PCoI recommended that forensic audits be carried out to ascertain the full loss and impact to the country into the bonds issued since 2015.

Pursuant to the suggestions made by PCoI, former Central Bank Governor, Dr Indrajit Coomaraswamy undertook the task of conducting forensic audits with the assistance of international consultants.

The completion of the forensic reports saw the Monetary Board seeking the opinion of the Attorney General, as to whether the reports should be made public.

It was the Attorney General’s opinion that the findings in the reports, should be treated as having the potential to be evidence in investigations and therefore suggested that any extracts which can be disseminated in the public domain, will be notified to the Central Bank.

At the same time, the Forensic Audit Report on the Bond Scam was sent to Committee on Public Enterprises, however, before it could be discussed, parliament was prorogued.

Although Presidential Commission was detailed in its recommendations, no legal investigation was ever carried out into the issuance of the second bond in 2016, which in terms of value was 7 times greater than the 1st.

The delay and lack of attention to the matter indicate that the scam was more deliberate and thorough than the first.


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