In a startling revelation in the unfolding drama of the Central Bank bond issue, Deputy Governor of Public Debt, G. Samarasiri along with  Assistant Governor of the Public Debt Department, Dr. Mohammed Asim along with several officials had valiantly tried to meet the former governor, Arjuna Mahendran and register their strongest protest regarding the manner in which the bond issue was conducted.

This was revealed by Dr. Asim in his evidence at the Special Presidential Commission of Inquiry (CoI)

He stated that he and a group of officers who were disturbed over the manner in which the bond issue was conducted on that day tried for over 45 minutes without any success to meet the governor and register their strongest protest.

He further stated that the officers were disturbed by the negative impacts to the economy as a result of the actions at the bond issue compelling them to state their sadness and protest.

He said that Samarasiri and several other officials accompanied him on this mission that was unsuccessful.

The CoI which probes into the controversial bond issue has revealed hitherto unknown instances that had taken place during the transactions.

In a shocking testimonial evidence led before the CoI looking into the controversial Central Bank of Sri Lanka (CBSL) Treasury bonds this week, it was revealed that former Governor of the CBSL, Arjuna Mahendran for the first time in the history of the Bank had visited the office of the Public Debt Department which was where the auction was held while it was in session.  The particular issue involves a bid made in excess of the initial bid amount or government loan requirement (the price of the bid and volume of the bid) and one primary dealer, Perpetual Treasuries Private Limited, a company to which Mahendran’s son-in-law Arjun Aloysius is affiliated to.

The said company bid at a higher interest rate than was favourable to the State, receiving insider information of the bond issue and auction in advance via a leak.    The fact was revealed in information given by Additional Director of the Statistics Department of the CBSL,

Dr. M.Z. Mohammad Aazim who added that not only had Mahendran walked in but had also questioned and made inquiries with regard to the progress of the auction which was then underway. On the day, Mahendran accompanied by two other officers, had walked in at around 10.45 am, stayed till the auction closed at 11.05 am and left at around 11.11 am.

Dr. Aazim also explained that in the period leading up to the auction, the Superintendent and Registrar of Public Debt who heads the Public Debt Department, NWGRD Nanayakkara who had served in the said Department for a lengthy period of time, had been removed and replaced with CMDNK Seneviratne.   Incumbent Governor of the CBSL Dr. Indrajit Coomaraswamy and Secretary (Treasury Secretary) Ministry of Finance Dr. RHS Samaratunga, have been summoned before the Commission.

The Commission is chaired by Supreme Court Judge Justice KT Chithrasiri and includes President’s Counsel Prasanna S. Jayawardena and former Deputy Auditor General, Velupillai Kandasamy. They are scheduled to submit their report in three months.

Meanwhile, Prime Minister Ranil Wickremesinghe has requested the CBSL to provide information pertaining to the issuing of gazette notifications regarding the issue of bonds which had taken place since 1999.

It has been reported that since 1999, the practice pertaining to issuing gazette notifications has been to issue the gazette notifications in relation to bonds issues for the following year during the latter half of the preceding year after having reserved a gazette number in prior.

The CBSL comes under the purview of the Ministry of National Policies and Economic Affairs of which Wickremesinghe is the subject Minister in charge of the portfolio.
Called before the Commission to explain why the gazette in relation to the particular bonds issue which took place in 2015 February contained former Minister of Finance Mahinda Rajapaksa’s signature instead of Minister of Finance at the time, incumbent Minister Ravi Karunanayake’s signature, the Acting Government Printer, Gangani Kalpana D. Liyanage too had confirmed that the said procedure was being followed.

Responding to a subsequent challenge by Karunanayake, the Joint Opposition and former President and current Kurunegala district MP Mahinda Rajapaksa have threatened to file a law suit against Karunanayake in this regard for what they consider to be an attempt to pen the responsibility of the said scam on the previous regime.

Officers of the Attorney General’s Department who are assisting with the investigation, Counsel for the defence and members of the Commission recently visited the CBSL to be shown and given an understanding of the proceedings that take place during a bonds auction.

Meanwhile, responding to the bond controversy CBSL last week said the bank would be making its own recommendations to the government on suitable amendments to the Registered Stock and Securities Ordinance which is considered outdated.