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Sri Lanka to enact new monetary law to prevent corruption at Central Bank following Bond Scam

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Sri Lankan President Maithripala Sirisena, in a special statement to the nation on Wednesday said that the government would adapt a new Monetary Law Act in the island country to avoid any malpractices in the Central Bank in the future.

Sirisena made the statement following the conclusion of probe by a special Presidential Commission into one of the country’s biggest treasury bond scams committed at the Central Bank during the period of the former Central Bank Governor Arjuna Mahendran.

The country’s treasury is said to have lost Rs,11,145 million due to treasury bond scam and other malpractices committed allegedly under the watch of the former Central Bank Chief and some bank officials.

Mahendran’s son-in-law is also alleged to be involved in the scam as his company Perpetual Treasuries had allegedly bought securities at low prices.

Mahendran was appointed the central bank chief in 2015 by Prime Minister Ranil Wickremesinghe before the bonds scam but resigned a year later.

“I would not hesitate to take steps to recover the loss of Rs 11,145 million and take legal action against the offenders and punish them,” Sirisena said.

“The report stated that the Perpetual Treasuries Limited has made profits through illegal means with the involvement of Mr Arjuna Mahendran, Bank officials and some outside individuals,” Sirisena added.

“Perpetual Treasuries Limited has made undue profit of Rs 11,145 millions in the secondary market. In this Employees Provident Fund and other government institutions had lost more than Rs 8.5 billion.”

The final report by the Presidential Commission of Inquiry, which was probing the scam was handed over to Sirisena last week following which Sirisena said that the report had been handed over to the Attorney General for further legal action.

Sirisena said that the report also recommended legal action against former finance minister Ravi Karunanayake who resigned from his portfolio in August after his name surfaced in the Bond scam issue.

Sirisena further said that the Present Central Bank Governor, Indrajit Coomaraswamy, had suspended some employees of the Central Bank after their malpractices were revealed in the investigations and disciplinary action was being taken against those officers.

Sirisena further urged the Justice Ministry and the Attorney General to take early steps to draft new bills proposed by the Presidential Commission in order to make required changes at the Central Bank to ensure such corrupt practices, frauds and malpractices would not take place in the future.

He said steps were also being taken to further strengthen the Bribery and Corruption Commission.

Sri Lanka’s Prime Minister Ranil Wickremeinghe, also became the first Prime Minister in Sri Lankan history to be questioned by the Presidential Commission in November over the government’s policy on bonds after the Bond Scam was exposed.


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