Sri Lanka will investigate the sale of over five thousand billion rupees in treasury bonds by the Mahinda Rajapaksa regime, Prime Minister Ranil Wickremesinghe said describing it as the “biggest pyramid scam” in the country.
Making a special statement to parliament on Thursday, the Prime Minister said over 90 percent of the 5,147 billion rupees worth of bonds had been sold privately without going through a transparent tender or auction system.
“There had been no decision of the Monetary Board (of the Central Bank) to go for such private placements, but nevertheless they did that from 2008 to 2014,” Wickremesinghe said.
“This is the biggest ‘pyramid scam’ perpetrated on the country,” he said referring to outlawed network marketing schemes where investors or participants are falsely promised high returns without a tangible business.
The Prime Minister said the former Rajapaksa regime had also raised loans without informing parliament and he intended to probe the extent of such transactions through the finance committee of the House.
The investigation into the bond sales between 2008 and 2014 will begin soon after the current bond commission completes its work, Wickremesinghe said.
He said the government will also investigate share market manipulation which saw worthless stocks dumped on the Employees’ Provident Fund during the Rajapaksa regime.
Some of the closest allies of Rajapaksa have been accused of “pump and dump” scams, but there have been no prosecutions.
He formally informed the House about testifying before the bond commission last week and that he disclosed facts that were not previously known to the authorities.
He had told the commission that the former regime had kept big-ticket government expenditure out of the budget to project a robust balance sheet to the International Monetary Fund.
He said about 500 to 600 million dollars had been obtained outside the budget by the former government and warned that failure to meet those debts could cause severe stress in the banking sector.
The Presidential Commission of Inquiry to Investigate and Inquire into the Issuance of Treasury Bonds wound up its sittings after Wickremesinghe’s testimony last week.