19 May, 2022


Bond Scam: I Was Asked To Head Central Bank – Dr. Wijewardena Responds To Senasinghe’s Allegations

“Suffice to say that COPE report was written by the staff at COPE and not by me. I helped them to check on technical accuracy in the report which was a must given the complexity of the subject involved. I was one of the vocal critics of the wrong economic policies of the previous government as an independent analyst. One may just go to the archives of Colombo Telegraph and Daily FT to verify this fact.” Dr. W. A Wijewardena, former Deputy Governor of the Central Bank of Sri Lanka, told Colombo Telegraph.

Dr. W. A Wijewardena

Dr. W. A Wijewardena

Former Deputy Justice Minister, Colombo District UNP MP and COPE member, Sujeewa Senasinghe, in a scathing attack, has alleged that former Central Bank Governor Ajit Nivard Cabraal and Deputy Governor W.A. Wijewardena had drafted the contents of the COPE report on the now infamous Treasury Bond scandal.

Responding to a query made by Colombo Telegraph regarding the allegation leveled against him, Dr. Wijewardena said; “The actual fact was that the new government approached me first on 9th January itself before full election results had been out when they were searching for a person to head Central Bank as its Governor and the former Deputy Minister would not have been privy to that information. I politely declined since I didn’t have intention to return to a government career since it would have compromised with my independence as an economic analyst. In this capacity, I provided my service to many authorities of the new government as a consultant free of charge including the Ministry of Economic Affairs in the preparation of a comprehensive economic plan which Dr Harsha de Silva too had acknowledged in a public event relating to CIMA as had been reported by Daily Mirror.

“When I was requested by Secretary, Ministry of Economic Affairs on instructions from the Prime Minister to assist the Pitipana Committee I did so willingly because I thought that it was my duty by the country. When the Committee wanted to pay me, I declined and provided my expert services free of charge.

Sujeewa Senasinghe

Sujeewa Senasinghe

“The same issue had arisen in the case of COPE sub committee too because the members had not been conversant with the the complex matters involved in bond dealings and could not proceed with the inquiry without guidance of expert advice. Enlisting such expert advice is the normal situation in Legislative inquiries including the U.S. Congress since legislators are not supposed to be technically literate on every matter. The members of COPE sub committee appreciated my clarification of many technical issues that had come to light in the course of their inquiry. The former Deputy Minister was a member of the Committee and he would have protested at that time if he felt that the advice was biased. My services are not free as an international consultant but I served COPE without asking for any remuneration.

“It is sad that political expediency has driven a Deputy Minister representing a government standing for good governance to such a low level. It appears that the members of the good governance government too need tuition on what is meant by good governance.”

Meanwhile one of the 13-member Special Parliamentary Investigation Committee that probed the alleged insider trading and favoritism in the recent treasury bond issue, former State Minister of Education and the leader of the Liberal party of Sri Lanka, Prof. Rajiva Wijesinha said; “The UNP seems to have gone completely mad in trying to escape from its guilt over the Central Bank Bond scam. Sujeewa Senasinghe claims that the COPE report was written by former Governor Nivard Cabraal and former Deputy Governor W A Wijewardena, whereas the latter has often been critical of the former in his writings. I believe they have different views of the role of the state, with the Deputy Governor less inclined to intervention. But even he, when he appeared before us as an expert, pointed out that you could not rely wholly on auctions, because using Direct Placements was necessary to discipline the market.

Prof. Rajiva Wijesingha

Prof. Rajiva Wijesingha

“Except practitioners of what used to be termed voodoo economics, we all understand that pure market mechanisms do not work. It is not the business of government to sit back and allow the weakest to go to the wall. The fact that Wijewardena appreciates this, and said as much when he appeared before COPE should not lead Sujeeva to fling mud and claim collusion.

“Sujeewa himself was wiser before he was summoned to the presence and asked to act as hatchet man at COPE. He told me in May that, though he disliked Ravi Karunanayake, he did not think he was primarily responsible. He did not name names, but like the rest of us I think he suspected that it was Ranil and Malik who were behind the whole scam.

“Meanwhile looking through the evidene I find that the wild allegations both Sujeewa and Arjuna Mahendran were making are totally misplaced. They claimed that Perpetual Treasuries may have benefited because Cabraal’s sister was on the Board, but I find that in the period before February 27th, they placed 15 bids for bonds, for a total of 22 billion, and were successful only once, for 27 million rupees.

“But, with bids of never more than 2 billion before, they bid 15 billion on February 27th (2 on their own and 13, unprecedentedly, through the Bank of Ceylon, and obtained 5 billion worth.

“Again, Arjuna made much of the fact that, in instructing as the Bank officials revealed that 10 billion be taken, the weighted average interest was a bit below what it had been in May 2014. This ignored the fall in interest rates that had occurred since, and also the fact that, at that auction, all bids that were accepted were at the lowest interest rate offered. In this case the lowest interest rate (Net of Tex) was 9.35 while for Perpetual Treasuries it was 12.50. Thus they got 100 rupee bonds at Rs 90 whereas the lowest bidder bought them at Rs 119 (also brokered by Bank of Ceylon).

“Will Sujeewa – or more likely Eran – neither of whom will I think want to make money improperly – have the guts to tell Ranil that he would do the party great good if even now he persuaded Mahendran to go?”

Related posts;

Exclusive: Bond Scam; Full Text Of Interim Report Of COPE Inquiry

Full Text Of Ranil’s Bond Committee Report – I’ve Nothing To Do With Committee Findings: Dr. WAW

From Bomb Disaster To Bond Disaster by W.A Wijewardena

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Latest comments

  • 41

    As somebody who supports the UNP and good governance, I am totally appalled by the lack of responsibility of accepting blame for this serious debacle by the UNP. From all that I have read and comprehended of this case as an average citizen, I conclude that Arujuna M is nothing but guilty. He has compromised his professional standards and clearly stayed away from the auction. Above all he could have officially informed the bank that his son-in-law’s company was also bidding for bonds. That is what is expected of professionals working in multinational companies when there is a conflict of interest. Why didn’t Arujuna M take this moral standing? It is only because he had other devious intentions. He and RW can fool and undermine the people’s ability to judge right from wrong but they cant be true to their conscience ever. Sujeewa is making a bigger mess of it by adding fuel to the fire by falsely defending their actions.

    As i have commented before my concern is for the forthcoming elections. I am wondering if RW is ready to sacrifice us the people for one unscrupulous Arujuna Mahendran. RW should think of our future as a nation and not his or AM’s future as a politician and public servant. We don’t want MR back but it worries me to think that such issues and Ravi K appointing his brother-in-law to SLIC etc. all of it will collectively bring MR back. I hope not!

    When this government’s approval ratings should have gone -up it has only receded in a few months in office. This begs the question from party members- are we being fair by the people of Sri Lanka?

    • 7

      A case should be brought against Mahendran and son-in-law, Aloysius who should be arrested not that Mahendran has fled the country. Aloysius must be cross examined and jailed. He was also a Nivard Cabraal/ Mahinda Jarapaas’sa stooge. Maybe Mahendran and Cabraal are in the insider trading business together..?!

      Perpetual Treasuries staff which is the Arjuna Mahendrans’ son-in law’s firm MUST BE INTERROGATED and must be questioned in open court as as to how ONLY they knew to bid for one BILLION when the call for bids specified a million, and all other companies bid for around a million.

      There must be a systematic investigation and Mahendran and Alysius and all others culpable locked by like Raj Rajaratnam was.

      Shame on Ranil Wickramasinghe and his Royal college clique. President Sirisena must now intervene and remove Mahendran from the post of Govenor of the Central Bank.

      • 4

        When the fraud was exposed the President should have canceled the bond issue and shown the door to Mahendran. His SiL should have been banned from holding any position in a financial comapany for a minimum 20 years. The rest could have been done at leisure. But then one would need a President with a spine.

        The UNP is attempting to sling mud every which way in the pre-election period.

        • 1

          Mahendan’s son-in-law, Aloysius and his firm Perpetual Treasuries MUST be investigated for insider trading and money laundering and charges brougth against them as was done by US investigators against Raj Rajaratnam.

          They cannot simply be shamed and let off the hook. This firm is implicated in frauds and illicit gains under the Mahinda Jarapassa/ Ajith Nivard Cabraal regime at the Central Bank as well.

          Aloysisu is a crook INSIDER TRADER and RENT SEEKER and must be held accountable and his assets confiscated and returned to the state and the citizens of Sri Lanka who have been defrauded, while Ranil Wickramasinghe was fiddling.

    • 1

      Post Shot,

      Please educate me as to whom to cast my vote in coming election!

  • 28

    All this have proved clearly that Ranil W is a crook and a thief. UNP should reject nominating Ranil as PM and reject him entiarlly for the upcoming election if they need a single vote from the people!

    • 3

      Only strength UNP had in the last presidential election was the floating voters who were mostly an educated professional layer of the society as well as open minded citizens who resisted lack of good governance at that time. Its beyond doubt that all these people have lost confidence in UNP which only benefited the crooked MR regime and its clan. RW ruined his only chance to be in power and to come back to power by appointing a crook like Ravi K as the Finance Minister and then by trying to play fool with the biggest ever scandal by a public officer like AM who had openly violated regulations of CBSL and economic fundamentals. So those people who dreamt of good governance are helpless today. In a way MR’s regime was better given the fact that there was “visible” development at the cost of law and order & good governance. Theres NOTHING with this government. God bless this country.

  • 17

    Dr Wijewardana seems to be a descent man, who has done his bit to save the Elite that extra 3 % which they now have to pay for 30 years.

    Wonder who is that punk in Leather.

    I am surprised Dr Wijewardana doesn’t know that if you allow dogs in your bed, you wake up with fleas..

    Even the Poodles in Colombo Club often have ticks on them, although not visible.

    • 11

      K.A Sumanasekera

      By now you would have familiarise yourself with Benamy and Benamdar.

      How are you going to put yourself in the service of the clan if MR clan wins the next elections?

      Will you still be carrying MR’s b***s or become a Benamdar?

      • 6

        Dear Native,

        Why are you so much in to Indian stuff?..

        Are you an Estate Tamil who has graduated to Elite class Economically or immigrant with a poosari background… I mean a Brahmin to barrack so much for the Vellalas and the Anglicans .

        • 4

          K.A Sumanasekera

          aspiring Benamdar

          “Why are you so much in to Indian stuff?..”

          I am only pointing out your close relations with Indian people (especially South Indians) genetically, culturally, ….. historically, linguistically, ……….

  • 14

    “All this have proved clearly that Ranil W is a crook and a thief”-Lasanda..
    Of course Ranil was always a crook BUT what he did was he got others to steal for him.
    This is classic position from that Oliver Twist tale.

  • 19

    What a contrast to Liam Fox, the former minister in UK govt. who resigned after allegations that his former flat mate travelled with him on foreign trips. He in fact resigned before the investigation came out with their report saying

    “mistakenly allowed the distinction between my personal interest and my government activities to become blurred”.

    The fact that CB Gov. son-in-law was bidding for the bond itself is a conflict of interest !
    Then we have a CB Governor who not only refuses to resign but is protected by Ranil (including appointing 3 UNP acolytes to white wash him) but also seems to be using ministers to tarnish the image of such people like W. A Wijewardena !

    Is this any different to the nepotism and corruption we saw pre Jan 2015?

  • 16

    Those who supported Weliamuna’s Sri Lanka Airline’s investigation fees, please make note of Dr, Wijewardena’s response. I really admire Dr.Wijewardena for his stance in doing an honorary job.

    1.I provided my service to many authorities of the new government as a consultant free of charge including the Ministry of Economic Affairs in the preparation of a comprehensive economic plan which Dr Harsha de Silva too had acknowledged in a public event relating to CIMA as had been reported by Daily Mirror.

    2. “When I was requested by Secretary, Ministry of Economic Affairs on instructions from the Prime Minister to assist the Pitipana Committee I did so willingly because I thought that it was my duty by the country. When the Committee wanted to pay me, I declined and provided my expert services free of charge.

    3.The members of COPE sub committee appreciated my clarification of many technical issues that had come to light in the course of their inquiry. The former Deputy Minister was a member of the Committee and he would have protested at that time if he felt that the advice was biased. My services are not free as an international consultant but I served COPE without asking for any remuneration.

  • 25


    Your integrity or professionalism was never in doubt.

    You are not a person who would compromise your values to earn a few bucks like some other consultants.

    Good to have the record straight and glad that you came out with all guns firing.

    With best wishes


  • 16

    Mahedndran should not go back to Singapore. He should remain Sri Lanka but not as Governor of Central Bank but in Welikada jail

    • 7


      “Mahedndran should not go back to Singapore. He should remain Sri Lanka but not as Governor of Central Bank but in Welikada jail”

      Mahendran can:

      a) Go to jail for the Next 30 years, or

      b) Get his son in law to accept 3% Less. for the next 30 years.

      I Prefer the option b) because it saves the Taxpayers

      Rs. 10, 000,000,000 x0.03 per year
      – Rs. 300,000,000 = Rs,. 300 million per year for the next 30 years or Rs.9,000 Million over a 30 year period.

      This is Rs.450 per Current Citizen over a 30-year period, or Rs.15/citizen every year.

      Pennies do count and add up.

      Is Ranil Wickramasinghe, a spineless, wimp or an idiot? Did Ranil and Mahendran go to Royal College? Do they produce spineless, wimps or an idiots?

      NB. The average IQ of Sri Lanka is 79.

  • 3

    Can someone provide the following information
    that’s vital to form a opinion;
    1.On the day of the transaction who were the shareholders of Perpetual
    and what was their I ndidual holdings? Did Arjuna’s son in law hold shares and if so what percent.
    2. What happened to the shares bought by Perpetual? Do they still hold them
    Or did they sell them. If sold, who bought and at what price?
    3. Perpetual could have made money only if they sold to EPF/ETF/Govt
    Controlled organisation using public funds.
    4. Has Bank of Ceylon been paid funds
    Advanced to Perpetual to purchase bonds
    @ 12.5%?

  • 9

    These are high flying gentlemen rogues who swindle in mega finance deals at high levels which are not visible to the general public unlike when ordinary politicians swindle in contracts which are more visible. Ranil and gang have taken Sirisena for a ride and let him down badly. What have Maduluwave Sobitha, Rathana thero and other good governance NGO people have to say now? Will they be vociferous as before or are they selective in their protests? Can the party give nominations to people like Ranil, Ravi and Kabir? Are’nt they worse than drug dealers?

  • 15

    Sujeewa Senasinghe should be punished at the next parliamentary elections.He has defamed an Honorable man deliberately out of malice and expediency.

    • 2

      So should you Mr Sarath, you to have defamed many honorable men out of malice in your time

    • 3

      I saw the You tube video of Sujeeva Senasinghe explaining the saga at a Talk show where Udaya Gammanpila tried to distort issues. It was very commendable how Sujeeva handled the matter.

  • 13

    This infamous transaction has tainted the image of the UNP leader, Dr Wijewardene is indeed a gentleman par excellence with a magnanimous spirit. ! By trying to sweep this broad day light financial crime under the rug and blame others who probed it , will further 000pen the good – governance policies and tarnish the image of the 100 day programme. Very deplorable !!

  • 11

    If there are any real honest and sincere people in the government let us see an apology being extended to Dr. Wijewardene for this despicable attack on his integrity.

  • 8

    As has always being, Mr. RW has failed this time too to get his acts right. His weakness in “Management” is the dismal failure to get the correct people to manage public affairs. It is admitted, he is not a crook; but in the selection of people to “manage” he has failed in very many instances and that is very damaging to the country. He also has a tendency to be “too social” and “amiable” with persons who have blatantly committed wrongs on public affairs. These qualities in his style and character have created a public perception of him being a “weak” leader and a “Management Person”. We saw in the Legislature, when he was questioned by MP Anura Dissanayake of JVP on this “Bond Issue”, his answers, mind you three times, were a reference to Mr. Cabral’s doings as the previous Governor of the CB. Next he made a public announcement that he was not summoned to the COPE Sub Committee who were appointed to investigate the affair. That was not expected of him as the PM, because such utterances undermine the dignity and validity of such authoritative body of investigations. This matter will definitely hang over him in the forth coming elections and it is best for him to “KNOW” the “New Knowledgeable Voter” trends in the electorates.

    • 2

      hes not a crook??mahendran him self has told cope that he acted on the advise of RW..he is the biggest crook in our political history..finally mr clean got caught cleaning the central bank

  • 12

    Ranil wickremasinhe was pointing fingers and calling everybody hora,hora and the real hora, himself, got caught redhanded.

  • 6

    Ranil has been failing time and again in showing high leadership qualities. He has wasted opportunities that came his way.

  • 4

    In the above article Dr. Wijeywardene states,

    ‘ but like the rest of us I think he suspected that it was Ranil and Malik who were behind the whole scam.

    From this it infers that even Dr. Wijeywardene suspects that Ranil and Malik are behind the Bond Scam. My question is will Ranil, Malik or Ravi K connive with Perpetual Treasuries knowing fully well of Nivard’s sister’s position in the Company to defraud funds without being exposed by them, as it has happened now. Let alone Ranil, Malik or Ravi K , not even a fool would have had any hand in this Bond Scam with the knowledge of the Cabral family as it is committing Political harakiri. I honestly find it difficult to believe even this Good Samaritan who offers Professional services free in this day and age. There is something more sinister in this Bond Scam that meets the eye to tarnish Ranil’s image. Imagine Ranil playing out State funds with the backing from Nivard Cabral’s sister of all people?

    • 13

      Gamini, I think you have been confused. The para you have quoted has been said by Rajiva Wijesinha referring to Sujeewa Senasinghe and not said by Wijewardena.

      I don’t find Wijewardena mentioning anyone being responsible for the bond scam because his job, I believe, was not to find a culprit but to clarify complex bond dealings to uninitiated ordinary COPE members.

      By reading the COPE report published elsewhere in CT, my judgment is that Arjuna Mahendran, knowingly or unknowingly, had supported his son-in-law to make money out the bond issue. The bidding pattern by the primary dealing company owned by Mahendran’s son-in-law clearly indicates that it had the benefit of inside information which other dealers did not have as confirmed by dealers from Seylan, People’s Bank and NSB. It does not matter whether this inside information was leaked by Mahendran or not. The bond issue has led to colossal losses and Mahendran as CEO of CB is responsible for the losses in terms of section 21 of the Monetary Law Act.

      The culpability of RW is that he, as a politician standing for good governance and a corruption free society, has attempted to cover it up for reasons known only to him. However, that is an unpardonable crime by a PM of the country and he will have to pay for it one day since the bond scam is not going to end by the dissolution of Parliament.

      • 1


        No confusion at all. This Wijewardena [Edited out]

  • 2

    Will Ranil of all people be so naive to put his career in Nevard Cabral’s hands, an adversary and a crook who has played out State Funds under MR, by conniving with or helping Perpetual Treasuries, where Nevard’s sister holds high office? Where is the Common sense of this society?

  • 3

    With regard to last part of Rajiva Wijesinghe’s response, good to hear Perpertual T did not get extra-preference under auction methology.But since COPE report acknowledged Direct Placements (instead of auction) was the norm since 2008 with as much as approx over 80% being traded that way, would be nice if there was additional information somewhere to ascertain whether Perpetual were favored under DP methodology since obtaining license in 2013. Hence may I suggest CT to demand transparency here.

    .Remember when EPF in previous years invested in loss making fundamentally unsound stocks, like Galadari, Grain Elevators, ERI etc the defence of the Central Bank was that those investments were not for short term gains but intended for long term & hence they expected it to perform better as years pass. By saying that, all criticisms were wiped off. I think even in this case, the same ‘long term’ logic/excuse could be used that its 30 year blah blah and interest rates could fluctuate and hence u cant calculate losses.

  • 1

    Who is Lachsman Kirriella…

    He say no way any one can sack Dr Mahendran ,
    And the Dr is staying. because he has done nothing wrong.

    Wonder whether this Kirra will be so powerful in Yahapala 11,,to give such an Iron Clad guarantee to Mahendran;s Job Security..

    • 2


      the Kasmaalam

      “And the Dr is staying. because he has done nothing wrong.”

      Perhaps he is the only ‘doctor in the house’.



      Meaning in context

      Synonymous with “idiot”(the idiot being a litote).

      Origin, usage

      Possibly from Sanskrit kash malam (black hair) or kash mailam (black dirt). Comparing someone with hair is considered rude in Tamil culture. Maalam is also a slang word for shit. Some say ‘ kasmalam’ (one word) in Sanskrit means a dirty thing worthy of discarding.


      • 0

        Dear Vellala Native,

        I am not sure about your mate, Samurdhi Ranil , sorry Samurdhi PM .

        But his mate and your compatriot Dr Mahendran is certainly no Kasmaalan.

        Neither is your other compadre Aloysious…

        • 2

          K.A S

          Aren’t you proud of being the greatest Kasmaalam ever to walk in this land?

  • 2



    1. The Terms of Reference given to the Committee of inquiry by the Hon. Prime Minister was limited to 3 issues :

    i. The reason for the Department of Public Debt of the CBSL
    to make an announcement to issue a total of LKR 1 Billion
    ii. The sequence of events and key statistics associated with the said
    Bond Issue with respect to each Primary Dealer.
    iii. The bids received and allocations made by the Public Debt
    Department of the CBSL in every Bond issue beginning from
    January 1st 2012 by Auctions and Private Placements.

    These issues did not deal in any way with and the concerns addressed in Public Interest and dwell on matters irrelevant to the main issue.

    2. The borrowing requirement of the Government for March has been ascertained by the Treasury and conveyed to the PDD on 20/02/2015 as Rs. 13.5 Billion and the method of funding was through Treasury Bonds.

    There is a contradictory position regarding this aspect according to the statement tabled by Prime Minister to the Parliament where he has stated that

    ””””” läkñkA wruqo,a wjYH jQKd’ uqo,A wud;Hjrhd uydud¾. wud;Hjrhd uqo,A wud;HdxYfha f,Alï uy nexl= wêm;s iy ksfhdacH uy nexl= wêm;s we;=¿ ks,OdÍka fmnrjdß 26 jeksod /iAù fï .ek idlÉcd l<d' remsh,A ì,shk 15 la läkñka wjYH nj MysoS Tjqka ;SrKh l<d' Ma jk úg;a remsh,A ì,shk Mll NdKavd.dr ne¥ï lr ksl=;a lsßu fjkqfjka uy nexl=j oekaúï m< lr ;snqKd'

    Accordingly the question arises as to which requirement this Bond Issue was designed to fulfill. Whether it is to fulfill the cash flow requirement for the month of March (Rs. 13.5 Billion) OR to find money to pay the Contractors as stated by the PM (Rs. 15 Billion)?

    2.1 On 23/02/2015 the Monetary Board decided to raise funds through
    Bonds Auctions under the following provisions:

    the period to be 30 years
    to call the Auction during the week
    to discourage direct placements

    If the intention was to do away with Direct Placements it is difficult to understand why only One Billion was announced, when there was an actual requirement of either 13.5 Billion OR 15 Billion.

    2.2 The reasoning of the PDD by way of explanation to go for Direct
    Placements instead of the total fund requirement at the Auctions
    appear to be a more acceptable and sound policy in the context of
    Govt. having to borrow on the best terms available and the P/Ds
    desire to settle for the highest rates.

    2.3 It has to be understood that whether by auction or under direct
    placement all settlements have to be through the P/Ds. No
    individual can settle directly with the PDD. Hence the allegation made
    by the PM and the reference made in the Committee Report to the
    effect that if Direct Placements would favour individuals is not tenable.

    2.4 The Committee reports that there is no proper mechanism in place for
    Private/Direct Placement. According to the Governor steps were taken
    to resort to Public Auction procedure because Private Placements have
    led to corruption and lack of transparency. Why then did the PDD
    announce only One Billion when the fund requirement was 13.5 or 15
    Billion required to be fulfilled in a very short period.

    With regard to the so-called dis-satisfaction of some PDs on the Direct Placement system, it appears to be an opinion expressed by some only. As they are all organized under one association they could have collectively raised such. The Committee has failed to contact this body.

    The PM in his statement to Parliament says he insisted on an Auction procedure and to do away with Private Placement.

    How did the PM give effect to his insistence for an Auction only process?
    When did he discuss this?
    With whom did he discuss this?
    Did he issue any specific instructions?
    Are there any such records available?

    In Direct Placement it should not be understood that PDD resorts to Direct Placement without an Auction. It is always following an Auction that the subsequent Direct Placement takes place. Hence the rate determination is tied to some basic rate that has already been accepted by the CBSL at the Auction.

    3 In the report, under Section No. 4 it is stated that the Governor has made it clear that the “restart” of Auctions was important. If he was going to restart an Auction system he could have been more vigilant about the practices particularly as he was aware of the previous mal-practices.

    4 The Governor’s directive to the PDD to go for the longest tenure bond also has to be viewed critically. Whilst admitting complexities of economic policy matters and that the decision cannot be always based empirically, there are many guiding factors that become relevant to be considered as fair and reasonable. The application of a rigid formula does not arise but para-meters of the decision making should be pragmatic and relevant to the local economic conditions.

    It is an observed fact that when a smaller amount is offered the bidding rates are
    lower for very short periods and slightly higher for longer periods. If the amount
    is large the bids go for a little higher rate for shorter periods and higher still for
    longer periods.

    In this instance the rate contemplated was 9.5% for the 30 year One Billion Bond
    Issue. This was the rate advised to PDs by the PDD.

    5 When we examine the Bids actually submitted by the PDs for the Auction held on 27th February, 2015 One Billion limit would have been achieved at the rate of 10.32% among 3 Bidders including the EPF 1,000 Million – @ 10.99% and this would have determined the base rates for the balance with slight variations under either another Auction or a Direct Placement. Therefore the decision fails the prudency test however much one argues otherwise.

    Bid rates given for this Bond Issue by different P/Ds for the accepted bonds are
    as follows :

    Perpetual Treasuries 250 @ 11.15
    – Do – 250 @ 11.75
    BOC for Perpetual 500 @ 11.99
    Treasuries 1,000 @ 12.24
    3,000 @ 12.50

    Wealth Trust Securities 50 @ 12.50
    – Do – 50 @ 11.99
    Seylan Bank 1,250 @ 11.75
    HSBC 100 @ 12.50
    Pan Asia 250 @ 12.50
    Capital Alliance 100 @ 12.50
    Accounting Securities Ltd 50 @ 9.99
    First Capital Treasuries 100 @ 10.09
    Entrust Securitiies 50 @ 10.89
    – Do – 50 @ 12.50
    EPF 500 @ 10.74
    – Do – 1,000 @ 10.99
    – Do – 500 @ 11.29
    Peoples Bank 100 @ 10.99

    Of the total accepted 5,000 Million has been offered to Perpetual Treasuries with
    3,000 Million @ 12.50. Only 500 Million has been offered to 3 other Bidders at this

    6 The benefit accrued to Perpetual Treasuries seems to be questionable and the Public concern that this transaction is tainted with undue favouration backed by inside information appears justified.

    7 There are certain events in the nearest antecedent period to the Bond Issue that warrants a careful examination by any Committee of inquiry.

    a. The fund requirements of the Govt. for March 2015 has been estimated in accordance with the cash flows etc by the Treasury on 20/02/2015 and conveyed to PDD of CBSL by letter of the same date. The amount so determined was Rs. 13,550 Billion.

    b. The Monetary Board meets on 23/02/2015 and decides to issue 30 year Treasury Bonds through Bond Auctions and dis-courage Direct Placement.

    c. The PDD announces a Bond Issue of One Billion on 24/02/2015. According to the PM’s statement to parliament the Treasury comes up with an immediate fund requirement of 15 Billion at a meeting held in the Treasury attended by MOF – Highway Minister, Sec. MOF, Governor CBSL, Deputy Governor CBSL and other officials on 26/02/2015.

    d. The Monetary Board takes a decision on 23/02/2015 (before the announcement of the disputed bond) not to change the prevailing monetary policy on interest rates for a further period of one month from the date of the meeting and decides to change this policy suddenly on 27/02/2015.

    The rates prevailing were Repo 6.5%
    Rev.Repo 8.0%

    The licensed commercial Banks could avail these rates only 3 times a month and the SDF rate prevailing was 5%.

    8. Bond Issue closed on 27th Feb 2015`and the Tender Committee recommendation to accept 10,058 Million net of tax WAVR of 11.873% was submitted to the Governor at 13.10 hrs for his approval and the Governor gave his consent to this under his signature vide X – 4 – of the attached annexures to the Committee Report.

    The PM in his statement report tabled at Parliament stated that

    remsh,A ì,shk 20 lg wêl NdKavd.dr ì,Am;A i|yd ñ< .KkA bosßm;a lr wk;=rej remsh,A ì,shk 10 lA olAjd ñ< .KkA f;dArd .kAkd f,i Tyq m%isoaO Kh fomd¾;fïka;=fõ fgkav¾ uKAv,hg Wmfoia ÿkakd'

    This clearly shows that the Governor was involved in approving the allocation. Then the PM’s statement goes on to state ‘

    Tyq MA Wmfoia ,nd ÿkafka ksfhdacH wêm;sjreka fofofkl= bosßfhaoShs'

    so the Governor has got involved at all stages of the tender.

    9. There is no selection of any individual PDs in the process. Once the cut off rate is decided and the total accepted is fixed, then the parties within these para-meters automatically get into the selection range. No one has to select. But in this instance going beyond all stages of imagination a strange, incredible coincidence has happened where the disputed Company figures in the over One Billion range exceeding the anticipated interest rate which is highest among the other PDs that participated in the tender.

    10. When the Governor himself states that his Son-in-Law resigned from the Directorate of this P/D Company on his assuming duties as the Governor of the CBSL, can he deny knowledge that this Company was among the high rated parties and it Company was allocated 50% of the Bond Issued.

    11. He was well aware, in advance of his fiduciary obligations and responsibility as the Governor. Why he failed to exercise this caution at the decision making, approval stages of the tender when the same questionable Company participated in a very big and unusual manner remains to be clearly answered.

    12. It is a strange coincidence for the BOC to bid for 13 Billion at a very high rate on behalf of this same Company, when the Govt’s fund requirement was also 13 Billion. A State Bank has been made the scape goat to inside information available to a party to profiteer in an undue manner at a huge cost to the Treasury.

    13. It is interesting to examine in detail some information available to the public about some operations engaged into by Perpetual Treasury in the immediate antecedent period to the Bond Issue and the Monetary Policy changes.

    a. Has there been any “Short Sales” by the P/Ds in the period immediately before this Bond Issue in the secondary market?
    b. If so who are the PDs who were engaged in such activities?
    c. Has the sudden policy rate change provided a special advantages to such PDs? (These can be verified by the CBSL)
    d. When and how the BOC was made to bid on behalf of Perpetual Treasuries?

    14. It is also relevant to consider whether there was such an imminent urgency to mobilize funds in such a hurry. The Govt could have easily raised the money with 2 to 5 year Bonds below 8% as the liquidity in the money market was so favourable. Such a step would have saved a huge interest loss on one hand and would have provided more breathing space to launch a well timed Bond Issue later.

    15. It is also relevant to note that some Bond Issues have been cancelled after the last due to CBSL not accepting the interest rates offered, which shows that CBSL is very much in control of the interest rates contrary to the market operations to the advantage of the Govt.

    16. The question that the Committee has raised in asking the Governor whether he acted in a manner which favoured any particular P/D is ridiculous. In fact the Committee should have ascertained whether it has been so by analyzing the events and evidence. To ask him whether he committed a wrong sounds very ludicrous to say the least, when the Governor has openly denounced the allegation and even disregarded opinions publicly expressed even by the Parliament and continued to hold his position.

    17. The strange and unusual behavior of the Governor in deciding for his own self how he should respond to these issue defeats all norms and ethical standards known. The Committee-of inquiry has categorically stated that a full scale investigation is warranted. It is after the publishing of the report with serious strictures that the Governor decided to end his self-imposed compulsory leave and resume normal duties.

  • 4

    We must pay a special tribute to people like Dr. W. A Wijewardena. It’s unfortunate that the country doesn’t have the possibility of harnessing his knowledge, ability and experience.

  • 1

    Looks like Arjuna has been the scapegoat for what the UNP high command wanted ! ie increasing the issue from 1 billion to 10 billion. Maybe they should look at links between Malik and Perpetual more than Arjuna s connection through son in law !. Circumstantial evidence definitely is strong that Perpetual knew that the bank was going to issue 10 billion but insider trading is difficult to prove in courts without direct evidence. That’s probably why in US too they allow wire tapping . Raj Rajaratnam I think was nailed on a tapped phone call . Ranil and Malik must be gayly as in happily celebrating over a few billion looted from the people after blaming the Jarapassas.

    • 1

      Is it that you imply, that Perpetual Treasuries handed out the looted money to Ranil and Malik? So Ranil and Malik pockets the money without the knowledge of the Cabral family who run Perpetual Treasuries? I seriously believe that you have great imagination to be a perfect Fictional writer, in spite of your LowIQ.

    • 0

      Come to the point… show us where RW has gone wrong.. in terms of fund abuses. The issue with Governor is being investigated and will take some more time becoming it clear. But we are glass clear, that will for sure be seen as not a fraud but an issue… that could happen even on the so called west. However, investigaations will bring it clear.. for sure.. until then all the idiots could make their versions.. for their political gains.

  • 5

    Gamini’s point is just a blind worship of everything that RW does.

    Gamini says as Nivad cabralls sister worked at perpetual and therefore she would know everything that goes on in he perpetual including love chats among gay lovers weekending in posh resorts.Therefore if there was a connection betweeen RW and alloysius/mahendran she would be the first to know.And of course she would inform her brother who hates RW.

    Rather a pathetic opinion. Does Karu know everything RW does? Did MR know everything MS was doing ? This is a very immature defence of the indefensible

  • 3

    With due respect I think Mr.Wijewardene has forgotten that there was a even bigger internal explosion in the Central bank, which was the appointment of Ajith N Cagraal as the the Governor.
    What does Mr.W think of his tenure?

    • 4

      Dear Shelton,
      Just read my articles published in the Colombo Telegraph or in Daily FT or my speeches at Sri Lanka Economic Association to get a feeling on my stand of the policies of the regime you have referred to.

  • 1

    Mr Mahendren if you have any self respect, you should step down and go back to Singapore.

    • 3


      “Mr Mahendren if you have any self respect, you should step down and go back to Singapore.”

      So should Gota, Gamanpilla, Basil, Fonseka, …..

  • 3

    When questioned by journalists yesterday on what he had to say about the losses incurred due to decision to accept Rs 10b at auction, Mahendran took cover under the Supreme Court judgement given for Greek bond case. A recap of that decision below

    The Supreme Court dismissed the Fundamental
    Rights application filed by Sujeewa Arjune
    Senasinghe of Colombo 3 against the Monetary
    Board complaining that the Central Bank, in
    purchasing Greece Government Bonds, had acted
    in an unlawful, irresponsible and an arbitrary

    In its judgement, the Supreme Court said that the
    investment in Greece Bonds and its trade formed
    a part of the risk management strategy of the
    Central Bank and that if all investments were to
    be maintained as risk free investments, the return
    would be negligible. The Central Bank, therefore,
    had to select a mix of low risk and risk bearing
    investments, expecting a reasonably high return.
    The Court said: “We must not forget that in
    complex economic policy matters, every decision
    is necessarily empiric and, therefore, its validity
    cannot be tested on any rigid formula or strict

    The Court while adjudicating the constitutional
    validity of the decision of the Governor or
    International Operations Department September
    26, 2014 Members of the Monetary Board must
    grant a certain measure of freedom considering
    the complexity of the economic activities.
    The Court cannot strike down a decision merely
    because it feels another policy decision would
    have been fairer or wiser or more scientific or
    logical. The Court is not expected to express its
    opinion as to whether at a particular point of
    time or in a particular situation any such decision
    should have been adopted or not. It is best left to
    the discretion of the authority concerned.”

    The Court also acknowledged that the Central
    Bank’s decision to invest in such Bonds was
    based on the trade-off between different risks
    faced and the Central Bank’s tolerance for higher
    risk on a very small part of its portfolio. (Only 0.6
    percent of its portfolio was invested in Greece

    In that regard, the Court said: “Investing in high
    yielding sovereign paper is an integral part of
    fund management of many funds in the world and
    the Central Bank too had followed a similar
    practice in investing a tolerable proportion of its
    resources (0.6%) in Greece Government Bonds.
    When the Euro Zone took a turn for the worse
    several weeks after the investments were made,
    in mid July 2011, the Central Bank sold a part of
    Greece Bonds at a loss of US$ 6.6 million.
    This measure was taken to mitigate the risk of
    the Greece investment losing further value due to
    subsequent development in the Euro Zone. Such
    loss has been taken into consideration in
    computing the profit/gains for the year 2011
    amounting to US$ 430.2 million.”
    The Supreme Court Bench presided over by
    Justice K. Sripavan and comprising Justice R
    Marasinghe, and Justice Sarath de Abrew,
    unanimously concluded that; “Considering the
    totality of the circumstances, it is neither possible
    nor desirable to hold that the Members of the
    Monetary Board in taking a decision to invest in
    Greece Bonds, have acted arbitrarily,
    unreasonably and in a fraudulent manner.”

  • 1

    This WA Wijewardena is obviously has a hidden agenda and hence a biased character. For one thing this person admits he was offered the CB Governor post by RW which he turned down for the simple reason it created a conflict of interests between his ECONOMICS ANALITICAL ROLE AND GOVERNORSHIP! What a hell of theory is that!? The man is desperate wanting to serve his mother land but the path he chooses is just being a pedestrian in the foot-board as an economic critique! Any sensible person would opt to accept the Governorship and factually, materially, actively and participatorily help fashion the new economy! But look at the morbid attitude of a perverted economist!

    The other point is that the so called COPE investigatory team into this Bond Scam are a pack of chickens who knew head nor tail of Bond business and hence they in the first hand obtained a hell of a lecture from a hell of an economic expert into the Bond Business! Whaaaat a team of investigators! And a few of the riff raffs of that team like Dew Gunasekara and Handunnetti made a hell of a leak and commotion about the lectured findings of the “Cope” (Caugh?) Committee! They were in great hurry to at least output an interim report vilifying and convicting CB governor and then dump the whole blame on RW! This whole effort is based and politically motivated on slinging mud at RW! The invariable logical conclusion on this lectured inquiry is that the whole bunch of recipients of the Wijewardena lecture would be brainwashed, conditioned, shaped, preconceived and made biased by the “WA Wijewardena content” because it is this “Wijewardena content” which is used by all the recipients of the “lecture”! In other words this investigation is carried out by the number of COPE investigative Team x WA Wijewardena = that many Wijewardenas! In parallel connection theory the investigation is carried out by a single Wijewardena with more politcal vengeance and venom with the exception of Rosy, Serasinge et al who thought otherwise! And that is exactly why we witnessed the telltale signs where they had made a vague reference to RW and Malik Samarawickrama involving them in this scam! Mr. Wijewardena, can you reveal the information you have in this investigation involving the latter two?

    The other point I raise from Wijewardena’s own revelation is that RW has had no special interest in picking Arjun for the post because initially it was Wijewardena himself that was approached for the post! This whole episode further establishes the fact that this nation is a nation who are perpetually prepared to live in mud, swim in mud, bath in mud, eat mud, sling mud and ultimately burry themselves in mud! In the meantime Wijewardenas create “expert kind of mud!” For God’s sake, give RW a chance to take you all out of this mire and save at least the future generations yet to be borne because the majority in the present are brain washed and beyond help.

    • 4

      Mr Silva,
      Many thanks for the frank opinion expressed above.

      Answers to your reservations are given in the following report published by EconomyNext today:

      Sri Lanka COPE chief rejects bias charge over bond probe; defends experts
      Jul 05, 2015 17:35 PM GMT+0530 | 0 Comment(s)

      ECONOMYNEXT – The head of a parliamentary committee that probed a scandal in bond auctions defended experts who had supported and rejected comments attributed to a deputy minister which appeared to discredit experts who assisted the committee.

      Media reports, which had not yet been denied, published comments attributed to a junior minister, from the ruling party, questioning the integrity of W A Wijewardene, an expert witness to the Committee on Public Enterprises (COPE) who was an ex-Deputy Governor of the Central Bank.

      It was also suggested that the COPE report itself, which is still to be released, was written by Wijewardene and former Governor Nivard Cabraal.

      “These are absolute lies (patta pal boru) This is just imagination. This is just to politicize the issue,” COPE Chief D E W Gunesekera told reporters in Colombo.

      “I will not go beyond that since I was the former chairman of COPE. I have to protect the respect for this position, otherwise I know how to answer that.

      “Let me first tell you who Wijewardene is.”

      Gunasekera said Wijewardene was an authority who was consulted by a committee appointed by Prime Minister Ranil Wickremesinghe himself that examined the bond scandal on his suggestion. The COPE had also sought his expertise.

      “He gave a class to the legislators in the committee about Treasury Bills, Treasury Bonds and the Public Debt Department. That is how we also learned. One of the MPs who is a lawyer told me ‘I have now learned things I can use when I practice in court’.”

      “He did not write any report.”

      Media reports also suggested that the UNP junior minister had alleged that Wijewardene had an axe to grind against current Governor Arjuna Mahendran who is at the centre of the scandal because, he was not himself appointed governor.

      Observers say the ad hominem attack is dangerously similar to what happened during the previous regime and may have further damaged the image of the current administration, in the minds of those who want good governance.

      Wijewardene said the remarks published against him appeared to be those of a child.

      Deputy Minister Harsha De Silva spoke in support of Wijewardene and said he was offered the post of Governor but had declined. De Silva himself had been the target of ad hominem attacks before.

      “In fact he was our first choice,” de Silva said. “I personally had a long conversation with him on this matter.

      “He is a respected economist, who has been of service to the country for a number of years.

      “He is among several technocrats whose advice we have sought.”

      Meanwhile Gunesekara said the suggestion that Cabraal wrote the report could have come from the dream world (sihina lokaya).

      In fact Cabraal was called before the committee on the suggestion of some members. He was also questioned about his sister who was attached to a primary dealing company.

      “All the cross-questions are in the report.”

      Gunesekera said the report was prepared with the Auditor General. Under normal circumstances queries were referred to the AG, but in this instance he sat through the committee when officials were questioned and helped write the report.

      “This is an insult to the auditor general,” Gunasekera said. “He is a very talented Auditor General and one of the youngest we have had. There were two lady chartered accountants to help him. “

      Gunasekera said he told committee members not to make the probe an unjust political exercise from the begining.

      “I said, ‘Don’t make it a (ex-Chief Justice) Shirani Bandaranaike inquiry’. In that inquiry I refused to serve on that panel and being a minister I told President Mahinda Rajapaksa, I was not in agreement with you, and I was not going to vote for the resolution (to sack the CJ).

      “He telephone me five minutes before the speech, I refused.”

      (Update II/July 05, 2015/Colombo)

  • 0

    WAW/WA Wijewardena,

    In yesterdays’s press announcement RW said it all, confirmed what I said, revealed the duplicity and unprofessionalism of people like you, Dew Gunasekara and the throng who are used to bark at everybody. This Dew Gunasekara bugger was in a mighty hurry to announce his politically motivated biased findings before the dissolution of parliament and bungled up everything and set fire to the Rajapaksha vassal media whores’ petticoats by uttering totally unwarranted socially Cope Report! How does the bugger think he can go on vomiting out his own version of the investigation as Cope Report whereas he was duty bound to report only to parliament. The silly bugger was simply overwhelmed and overcome by the sudden dissolution of parliament and collectively tempted to spew out and illegal statement undermining his credibility. This is the type of fools we have in this country where we try to bring about a change in attitudes, actions and ideologies! The ass-pain of the Yahapaalanaya is that the so called professional man that is WAW jumped into the sinking boat of Dew Gunasekera which only confirms the fact that the dirt gets collected only at the dirt corner in the house! WAW, you are still to answer my question of RW’s involvement in this bond scam.

  • 0

    So what is the bottom line…end of the day there is no assurance of eliminating corruption using so called “Educated” people. All the crooks are well educated and professionals !
    Cheers !!

    • 1


      Any fool can become a so called “educated”, but the bottom line is he is still a fool because that half educated fool uses that knowledge to do, beget and breed more and more mischief as is evident these days through the actions of Dew G, JVPers, media vassals, WAW et al. When the Mahinda bugger wanted to defame SF during the Presidential campaign Rajapakshas made the whole parliament into a mud breeding and slinging body and created a diabolical lie against SF to gain political mileage among majority fools in this country. This bond saga is the same comedy as already tested and put to practice incarcerating SF. This WAW joker is quoting Dew G bugger as though Dew G is the No. 1 arbitrator in the world whereas the joker is and has been a lap dog of Rajapakshas and their regime through all the corruption, plundering, assaults, crimes and murders during all these years. Where was this fucking joker hiding when Greek Bond issue took place, EPF and Stock Market plundering and insider trading etc. Not a fart was heard from the silly fucker during the time he enjoyed all the perks and privileges from the Rajapakshas. And now the silly bugger is challenging for a debate with RW! He is feeding the fools and media vassals in the country with more and more fodder! A law must be passed preventing these type of jokers from engaging in any public interest matters or holding any common interest positions. WAW must definitely be a recipients of Rajapkahs bribes otherwise he would not engage in this type of politically motivated activities.

      • 5

        My dear Mr Silva,

        Let me first of all salute to you because by presenting a counter-view, you have generated a free discussion which will help all readers to make their own judgment on the issue at hand. Your contribution in that respect is immense.

        However, this speculation you have made that I have taken a bribe from MR needs clarification. If it is true, all the following too would have taken bribes from MR:

        Pitipana Report by the Committee appointed by PM has acknowledged me as follows:

        In the opening para: “The Prime Minister who is the Minister of Policy Planning made available the services of Mr W.A Wijewardena, the former Deputy Governor of the CBSL. Mr W A Wijewardena assisted the Committee in technical aspects”

        In para 39: “The Chairman and the members of the Committee further appreciates the invaluable assistance rendered by Mr W.A Wijewardena who guided the Committee with regard to the technical aspects of the investigations”

        PM also appointed me to the Dinesh Weerakkody Committee on the consolidation of banks and finance companies as one of the members.

        So, PM should have been guided by MR to seek my advice.

        Then, Dr Harsha de Silva is quoted by the report in EconomyNext (www.economynext.com) which I have reproduced above as having said as follows: “Deputy Minister Harsha De Silva spoke in support of Wijewardene and said he was offered the post of Governor but had declined. De Silva himself had been the target of ad hominem attacks before. “In fact he was our first choice,” de Silva said. “I personally had a long conversation with him on this matter. “He is a respected economist, who has been of service to the country for a number of years. “He is among several technocrats whose advice we have sought.”

        So, Harsha should have been bribed by MR to say so.

        I received a letter from the Vice Chairman of the University Grants Commission that the Hon Minister of Higher Education (at that time, Hon Kabir Hashim) has appointed me to the Council of the University of Colombo. Has he also been bribed by MR?

        Yesterday, I received another letter from Hon Lakshman Kiriella informing me that I have been appointed to a Multi-Disciplinary Task Force to examine the financial requirements of the Regional Plantation Companies. Obviously, Hon Kiriella too should be a bribe-taker from MR.

        There are many other instances where the present government has sought my assistance for many issues which Dr Harsha has been very polite to admit.

        It means the whole UNP is taking bribes from MR to seek my advice.

        I don’t have to boast of myself but if Mr Silva very kindly take trouble to make a quick search on Google under W.A Wijewardena or W.A Wijewardene, he could easily find from whom I take bribes.

        Suffice it to say that I have not accepted any payment for these services from the present government.

        During the MR administration, it was me who challenged and criticised the futility of his economic policy in my weekly article in Daily FT under the tagline ‘My View’ (www.ft.lk) which is automatically reproduced in CT too. These criticisms led MR administration to charge me as a UNPer.

        I didn’t accept the post of Governor because I wanted to remain independent and this stand will continue. Similarly, when there were invitations to function as an Economic Advisor to President, Minister of Finance and Ministry of Economic Affairs and to head a leading corporation functioning under Hon Gamini Jayawickrema Perera, I declined the offers on the same ground. But it does not mean that my services are not available to anyone on an honorary capacity.

        My free services are available even to Mr Silva if he desires to learn of professional opinions on economic issues without being marred by political colours.

        I do not think that PM referred to me at any stage in the press conference he had on the issue in question. If Mr Silva has evidence to that effect, I am humble enough to receive it from Mr Silva.

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